E-filing Income Tax

E-Filing Income Tax Return, TDS return, AIR return, and Wealth Tax Return can be completed online on https://incometaxindiaefiling.gov.in. E-filing your return has obvious advantages like the fact that you won’t have to deal with the hassle of paperwork and waste time sorting through it all. You can simply log on to the secure website and e-file your return.

This government website also has provisions for you to submit returns, view forms 26AS, outstanding tax demand, CPC refund status, rectification status, ITR – V receipt status, online application tools for PAN and TAN, e-pay your tax and even has a tax calculator.

New Income Tax Slab for Individual FY 2020-21

Income Tax SlabTax Rate
Up to Rs.2.5 lakhNil
From Rs.2,50,001 to Rs.5,00,0005%
From Rs.5,00,001 to Rs.7,50,00010%
From Rs.7,50,001 to Rs.10,00,00015%
From Rs.10,00,001 to Rs.12,50,00020%
From Rs.12,50,001 to Rs.15,00,00025%
Income above Rs.15,00,00130%

The following example will show the calculation of the payable tax amount if an individual who earns Rs.12.50 lakh annually, files his taxes as per the new income tax regime.

ComponentsAmount (Rs.)
Annual Salary (Rs.)12.50 lakh
Computation of tax on the gross total income
Up to Rs.2.5 lakhNil
From Rs.2,50,001 to Rs. 5 lakh – 5%12,500
From Rs.5,00,001 to Rs.7.5 lakh – 10%25,000
From Rs.7,50,001 to Rs.10 lakh – 15%37,500
From Rs.10,00,001 to Rs.12.5 lakh – 20%50,000
Total Tax Amount1.25 lakh
Additional Cess (4%)5,000
Total payable tax amount1.30 lakh

Important Dates to Remember when Paying Income Tax

The important dates to remember for individuals who fall under the bracket to pay Income Tax for the year (FY 2019-20 & AY 2020-21) is mentioned in the table below:

Important Due DatesThe task that must be completed
Before January 31Individuals must submit their proof of investment
Before March 31It is deadline before which any investments under Section 80C of the Income Tax Act, 1961 must be made
Before 31 JulyDue date to file income tax return
Between October and NovemberTax returns must be verified by this time

Income Tax Calculator

Income tax calculation can be done either manually or by using an online income tax calculator. The amount of tax that must be paid will depend on the tax slab under which you fall. For salaried employees, income from salary includes the basic pay, House Rent Allowance (HRA), Transport Allowance, Special Allowance and any other allowances. However, certain components of your salary are tax exempt, like Leave Travel Allowance (LTA), reimbursement of telephone bills, etc. In case HRA is part of your salary and you reside in a rented house, you are eligible to claim exemption. Apart from these exemptions, there is a standard deduction of up to Rs.50,000.

ITR Forms

If an individual needs to claim income tax refund, he/she will need to first file the income tax return. Depending on the income assessment group, the individual will need to submit one of the ITR forms listed below:

ITR Form NameDescription
ITR-1For Individuals having Income from Salaries, One house property, Other sources (Interest etc.)
ITR-2For Individuals and HUFs not having Income from Business or Profession
ITR-2AFor Individuals and HUFs not having Income from Business or Profession and Capital Gains and who do not hold foreign assets
ITR-3For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
ITR-4For individuals and HUFs having income from a proprietary business or profession
ITR-4SPresumptive business income tax return
ITR-5For persons other than, – (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7
ITR-6For Companies other than companies claiming exemption under section 11
ITR-7For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)
ITR-VThe acknowledgment form of filing a return of income

Income Tax Refund

In case you have paid more tax than your actual tax liability, you will be eligible to claim an income tax refund of the extra money you have paid. For example, if your TDS liability for the present financial year was Rs.35,000 and your employer deducted Rs.40,000 instead, you can claim a refund for the additional Rs.5,000 that was deducted. You can also claim an income tax refund in case you forgot to declare your tax-saving investments and tax has been charged to you without taking your deductions into consideration. Individuals can check income tax refund status on the official website of Income Tax Department

Income Tax Saving Investments

Declaring investments – From HRA, Life Insurance Premiums, National Savings Certificate, Leave Travel Allowance to Fixed Deposit (minimum of 5 years), ELSS Tax Saving Mutual Funds, and more, by ensuring that you have declared all your investments, you can achieve more deductions on tax. The following options can be considering for saving on income tax

Investment options

  • Mutual funds such as Equity Linked Savings Schemes (ELSS) can be claimed for tax deduction under Section 80C. Compare to fixed deposits and PPF’s, the ELSS offers shorter lock-in period and more benefits when it comes to making money.
  • Unit Linked Insurance Plans (ULIP) are insurance schemes that are linked to the market. The investment made under ULIP qualifies for tax deductions.

Insurance:

Life insurance and health insurance – The money paid towards life insurance and health insurance policies are considering for tax deductions under Section 80C

Home Loans:

  • When we take a loan for buying a house or for renovation purpose, we are eligible for tax deductions up to Rs.1.5 lakh for a financial year.

You can also consider the following options for reducing tax amount on your income

Fixed Deposits (FD) – An FD with a lock-in period of five years can help you save on tax while earning the interest on the deposited amount.

*National Saving Certificate (NSC) – The NSC offers a safe and reliable method of investing money. You can deposit as low as Rs.100 for a 5-10 year lock-in period. The investments made under NSC are eligible for tax deductions.

Provident Fund (PF) – You can also choose to invest more amount towards your PF account that will help you reduce your taxable amount.

Income Tax deductions

Deductions for your taxable amount are available under various sections of the Income Tax Act, 1961. Deductions will have to be mentioned in the relevant ITR form at the time of e-filing income tax returns.

Section 80C:
Deductions under this section are only available to individuals and HUF. This section allows for certain investments like NSC, etc. and expenditures to be exempt from taxation up to the amount of Rs.1.5 lakh

Section 80CCC:
Deductions under this section are on payments made to LIC or any other approved insurance company under an approved pension plan. The pension policy must be up to Rs.1.5 lakh and be taken for the individual himself out of the taxable income.

Section 80CCD:
Deductions under this section are for contributions to the New Pension Scheme by the assessee and the employer. The deduction is equal to the contribution, not exceeding 10% of his salary.

The total deduction available under Section 80C, 80CCC and 80CCD is Rs.1.5 lakh. However, contributions to the Notified Pension Scheme under Section 80CCD are not considered in the Rs.1.5 lakh limit.

Section 80D:
This is the section that deals with income tax deductions on health insurance premiums paid. In the case of individuals, the insurance policy can be taken to cover himself, spouse, dependent children – for up to Rs.15,000 and parents (whether dependent or not) – for up to Rs.15,000. An additional deduction of Rs.5,000 is applicable if the insured is a senior citizen. In the case of HUF, any member can be insured, and the general deduction will be for up to Rs.15,000 and an additional deduction of Rs.5,000.

A total of Rs.2.0 lakh can be claimed as deductions whether the assessee is an individual or a HUF.

Section 80DDB:
This section is for deductions on medical expenses that arise for treatment of a disease or ailment as specified in the rules (11DD) for the assessee, a family member or any member of a HUF.

Section 80E:
This section deals with the deductions that are applicable on the interest paid on education loans for an education in India.

 Section 80EE:
This section deals with tax savings applicable to first time home-owners. Applies for individuals whose first home purchased has a value less than Rs.40 lakh and the loan taken for which is Rs.25 lakh or less.

Section 80RRB:
Deductions with respect to income by way of royalties or patents can be claimed under this section. Income tax can be saved on an amount up to Rs.3.0 lakh for patents registered under the Patents Act, 1970.

Section 80TTA:
This section deals with the tax savings that are applicable on interest earned in savings bank accounts, post office or co-operative societies. Individuals and HUFs can claim a deduction on an interest income of up to Rs.10,000.

Section 80U:
This section deals with the flat deduction on income tax that applies to disabled people, when they produce their disability certificate. Up to Rs.1.0 lakh can be non-taxed, depending on the severity of the disability.

Section 24:
This section deals with the interest paid on housing loans that is exempt from taxation. An amount of up to Rs.2.0 lakh can be claimed as deductions per year, and is in addition to the deductions under Sections 80C, 80CCF and 80D. This is only for self-occupied properties. Properties that have been rented out, 30% of rent received and municipal taxes paid are eligible for tax exemption.

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