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 Slab||Tax Rate|
|Up to Rs.2.5 lakh||Nil|
|From Rs.2,50,001 to Rs.5,00,000||5%|
|From Rs.5,00,001 to Rs.7,50,000||10%|
|From Rs.7,50,001 to Rs.10,00,000||15%|
|From Rs.10,00,001 to Rs.12,50,000||20%|
|From Rs.12,50,001 to Rs.15,00,000||25%|
|Income above Rs.15,00,001||30%|
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.
|Annual Salary (Rs.)||12.50 lakh|
|Computation of tax on the gross total income|
|Up to Rs.2.5 lakh||Nil|
|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 Amount||1.25 lakh|
|Additional Cess (4%)||5,000|
|Total payable tax amount||1.30 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 Dates||The task that must be completed|
|Before January 31||Individuals must submit their proof of investment|
|Before March 31||It is deadline before which any investments under Section 80C of the Income Tax Act, 1961 must be made|
|Before 31 July||Due date to file income tax return|
|Between October and November||Tax 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.
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 Name||Description|
|ITR-1||For Individuals having Income from Salaries, One house property, Other sources (Interest etc.)|
|ITR-2||For Individuals and HUFs not having Income from Business or Profession|
|ITR-2A||For Individuals and HUFs not having Income from Business or Profession and Capital Gains and who do not hold foreign assets|
|ITR-3||For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship|
|ITR-4||For individuals and HUFs having income from a proprietary business or profession|
|ITR-4S||Presumptive business income tax return|
|ITR-5||For persons other than, – (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7|
|ITR-6||For Companies other than companies claiming exemption under section 11|
|ITR-7||For 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-V||The 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
- 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.
Life insurance and health insurance – The money paid towards life insurance and health insurance policies are considering for tax deductions under Section 80C
- 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.
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
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.
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.
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.
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.
This section deals with the deductions that are applicable on the interest paid on education loans for an education in India.
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.
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.
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.
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.
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.