Income Tax: Rates, Due Date and Return Filing in India
Income Tax is a type of direct tax that you pay on income earned during the financial year. In India, a direct tax is governed as per Income Tax Act, 1961 along with Income Tax Rules, 1962
Income Tax is levied based on the different types of incomes and taxpayers.
Index
- Who should file ITR?
- What is the Due Date to file ITR?
- What are the documents required to file ITR?
- What are the Income Tax Rates for AY 2019-20?
- How to file ITR?
- How to e-verify ITR?
Who should file ITR?
A taxpayer is required to file ITR if their income is more than the basic exemption limit. The basic exemption limit for Individuals and HUFs below the age of 60 years is INR 2.5 Lakh in AY 2019-20.
However, a taxpayer with income less than the basic exemption limit can also file an ITR. This is known as a NIL return.
When is ITR filing mandatory?
For certain income situations, it is mandatory to file ITR irrespective of income.
- Resident to whom any of the following situations is applicable needs to file ITR:
- Who has an asset outside India,
- Who has a financial interest in any entity located outside India,
- Earned income from a source outside India during the year,
- Who has signature authority in any bank account located outside India.
- Any taxpayer who wishes to claim a refund of excess TDS deducted needs to file ITR.
- Any taxpayer who has incurred the losses during the financial years and wishes to carry it forward to the next financial year needs to file the return.
- All Companies, Partnership Firms, LLPs, Local Authorities are required to file ITR.
Who is considered as Resident?
The taxability of a person depends on their residential status. The residential status is different from the citizenship of a person. Types of Residential Status for Income Tax purpose in India are:
- Ordinary Resident of India
- Resident but Not Ordinary Resident of India (RNOR)
- A non-resident of India (NRI)
A taxpayer is a resident in India if they stayed in India for:
- 182 days in a financial year, or
- 60 days in a financial year and 365 days or more in the past 4 financial years
What are the Due Dates to file ITR?
| Category | Due Date |
| Individuals to whom audit is not applicable | 31st July of the Assessment Year |
| Companies | 30th September of the Assessment Year |
| Individuals to whom audit is applicable | 30th September of the Assessment Year |
| Individuals/ HUF who are partners in a firm and firm’s accounts are subject to audit | 30th September of the Assessment Year |
What are the Documents required to file ITR?
The basic documents required to file ITR are:
- PAN (Permanent Account Number)
- Aadhar Number
- Form 26AS
- Bank Account Details
- Challan of any advance tax or self-assessment tax (if paid during the year)
- Details of the original return (if filing a revised return)
However, documents required to submit ITR may differ based on the income situations and ITR form the taxpayer has to file.
Which ITR Form to File?
The ITR form a taxpayer should file differs based on their income source and residential status.
The Income Tax Department has prescribed 7 different ITR forms for different income situations. The taxpayer is required to choose the ITR Form that is applicable to them for that particular assessment year.
The most common ITR form filed by individual taxpayers is ITR 1 or ITR 4.
| ITR-1 (SAHAJ) | The most basic ITR form for individuals having income up to Rs. 50,00,000 from salary/pension, one house property and interest. |
| ITR-2 | For individuals/HUF having income from salary/pension, multiple house property, capital gains, interest and partner’s income from the partnership firm. |
| ITR-3 | For individuals/HUF having income from salary/pension, multiple house property, capital gains, interest and income from proprietary business or profession. |
| ITR-4 | For individuals/HUF/Partnership firms having income from presumptive business or profession. |
What are the Income Tax Rates for AY 2019-20?
Income is taxed based on the category of a taxpayer. In India, income tax rates are declared every year in Union Budget by the finance minister. The Income Tax Slab Rates for Individuals and HUFs below the age of 60 years are:
| Taxable Income | Tax Rate |
| Up to INR 2,50,000 | Nil |
| INR 2,50,000 to INR 5,00,000 | 5% |
| INR 5,00,000 to INR 10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
- Rebate u/s 87A of INR 2,500 or 100% of the tax (whichever is lower) is available to Individuals with income is less than Rs. 3,50,000
- A surcharge is applicable if your taxable income is:
- between INR 50,00,000 to 1,00,00,000 : Surcharge 10%
- above INR 1,00,00,000 : Surcharge 15%
- Health & Education Cess is 4% on the total of income tax + surcharge
How to file ITR?
You can file Income Tax Return using:
- Income Tax e-filing Website
- ERI (e-Return Intermediary): these are government-approved intermediaries like Quicko
e-File ITR using Income Tax e-Filing Website
To e-file your ITR by using an income tax e-filing website, you should use your income tax e-filing account.
- Log in to the e-Filing portal by entering the user ID (PAN), Password, Captcha code and click ‘Login’.
- Navigate to e-file > Income Tax Return
- Select ITR Form, Assessment Year and other details
- Prepare your ITR
- Pay Self-Assessment Tax if you have outstanding tax dues. Or claim Tax Refund if you have paid excess tax during the financial year.
- Click on ‘Submit’ to e-File your ITR.
e-File ITR using Income Tax Utilities
Income Tax Department provides Java and Excel utilities to prepare and e-file your income tax returns. These utilities allow the taxpayer to prepare their ITR offline, and using the income tax e-filing account the taxpayer can submit their ITR.
- Go to incometaxindiaefiling.gov.in click on Offline Utilities under the Download section. Now go to Income Tax Return Preparation Utilities and select the assessment year
- Select the ITR Form you are required to file and Download ITR Utility for that ITR Form.
- Extract the files from a zip folder: You need to have java runtime environment to unzip the utility
- Prepare your ITR offline
- Upload the utility on your Income Tax e-filing account.
What is ITR e-Verification?
ITR filing process is not complete until you e-Verify your return. When a taxpayer files the ITR, they receive ITR V on their registered email id from the income tax department. ITR-V means Income Tax Return Verification Form, it is also known as ITR-V (Acknowledgement).
You can e-verify your ITR by the following methods:
- Aadhaar OTP
- Bank ATM
- Net Banking Option
- Bank Account Option
- Demat Account Option
- Physically sending ITR-V to the Income Tax Department: Use your income tax account to download the ITR V
FAQs
1. What is the due date to file the Income Tax Return (ITR)?
The due date to file the Income Tax Return (ITR) for individuals, Hindu Undivided Families (HUF) and taxpayers whose accounts are not required to be audited July 31st unless extended by the government.
2. What are the Income Tax slab rates for individuals?
The Income Tax slab rates for individuals for the Financial Year 2020-21 are given below. The table consists of both the current regime and new regime tax slab rates.
3. What are the basic documents required to file Income Tax Return (ITR)?
- PAN (Permanent Account Number)
- Aadhar Number
- Form 26AS
- Bank Account Details
- Challan of any advance tax or self-assessment tax (if paid during the year)
- Details of the original return (if filing a revised return)
4. Is it necessary to verify the Income Tax Return (ITR)?
The Income Tax Return (ITR) filing process is not complete until the filed ITR is verified by the taxpayer. The taxpayer can either e-verify the ITR or can send signed ITR-V (Acknowledgement) to the Income Tax Department (ITD). If the e-Verification of ITR is not possible then the taxpayer needs to send the signed ITR-V to the Income Tax Department within 120 days at CPC Bangalore.