Income Tax e-Filing saves time and allows the taxpayer to file ITR in a hassle-free manner. It is mandatory for the Individuals, NRIs, LLPs, Partnership Firms, Companies, and Cooperatives to file Income Tax Return (ITR). All the individuals and NRIs whose total income exceeds INR 2,50,000 has to file ITR. The blog explains in depth the various facts related to the ITR and the easiest way to Income Tax e-Filing in India.
What is Income Tax?
An income tax is levied by the government of the country on the income generated by the individuals and businesses within their jurisdiction. It is important for the taxpayers to file an ITR annually to determine their tax obligations according to the law. The income tax so generated is the source of revenue for the government. The income tax returns are used to provide goods for the citizen of the country, pay government obligations, and fund public services. Progressive income tax is employed by most of the countries where higher income tax is paid by the higher earner in comparison to the lower earner.
What are the Different types of Income Tax in India?
The taxes in India can be either direct or indirect. The different types of Income Tax in India are:
- Individual Income Tax: This type of income tax is filed by an individual.
- Business Income Tax: This type of income tax is levied on the earning of the business—self-employed contractors, corporations, partnerships, and small businesses.
Who are the Income Tax Payers in India?
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The following are the income taxpayers in India:
- Body of Individuals (BOI)
- Hindu Undivided Family (HUF)
- Association of Persons (AOP)
- Local Authorities
- Corporate Firms
- Companies
- All Artificial Juridical Persons
What are the Different Income Tax Slabs in India?
The income tax slabs in India are defined on the basis of the income earned by an individual. The income tax slab and rates for 2018-19 are:
- For individuals (residents and non-residents) who are less than 60 years of age:
| Taxable Income | Tax Rate |
| Up to INR 2,50,000 | Nil |
| INR 2,50,000-5,00,000 | 5% |
| INR 5,00,000-10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
2. Individuals aged between 60-80 years:
| Taxable Income | Tax Rate |
| Up to INR 3,00,000 | Nil |
| INR 3,00,000-5,00,000 | 5% |
| INR 5,00,000-10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
3. Individuals who are more than 80 years of age:
| Taxable Income | Tax Rate |
| Up to INR 5,00,000 | Nil |
| INR 5,00,000-10,00,000 | 20% |
| Above INR 10,00,000 | 30% |
4. For co-operative societies:
| Taxable Income | Tax Rate |
| Up to INR 10,000 | 10% |
| INR 10,000-20,000 | 20% of the income plus INR 1,000 |
| Above INR 20,000 | 30% of the income plus INR 3,000 |
5. The income tax for Domestic Companies in India will be 30%.
6. For Foreign Companies:
| Taxable Income | Tax Rate |
| Up to INR 1,00,00,000 | 40% |
| INR 1,00,00,000-10,00,00,000 | 40% |
| Above INR 10,00,00,000 | 40% |
What are the Due Dates for filing ITR?
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The last date to file the ITR is 31 August of every year. Considering the financial year starts from April 1, the government gives the taxpayer a time period of 4 months (April 1 – July 31) to plan his investments and accordingly file the income tax returns. In case a taxpayer misses the last date for ITR, a penalty of INR 5,000 will be levied if he files ITR before December 31. All the returns filed after December 31 will carry a penalty of INR 10,000. However, there is a relief given to the small business owners whose total income does not exceed INR 5,00,000 in the form of the maximum penalty levied on them will be INR 1,000. Also, the overall maximum penalty which can be charged on not filing ITR before the due date is INR 10,000.
What is Belated Return?
If a citizen fails to pay taxes on time, he can file a belated return before the completion or at the end of the assessment year. So, a belated return can be filed before March 31.
What is Income Tax Deduction?
The reduction in the total taxable income is income tax deduction. This is commonly a result of expenses which are incurred to produce additional income. When filing Income Tax Return, the taxpayer must know about the various deductions available for tax savings.
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Section 80C Deduction:
An amount paid or deposited for LIC premium, PPF, PF, ULIP, National Savings Certificate, tuition fees paid for children, term deposit, repayment of the principal part of housing loan, etc. can be claimed in the income tax deduction, up to INR 1,50,000.
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Section 80D Deduction:
The amount paid by individuals and Hindu Undivided Family (HUF) for payments to medical insurance comes under Section 80D deduction. A fee of up to INR 5,000 paid for health check-up can also be claimed.
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Section 80EE Deduction:
The amount paid as interest through EMIs on housing loan is the additional deductions that come under section 80EE which can also be claimed. The maximum deduction under Section 80EE is INR 1,00,000.
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Section 80E Deduction:
The Section 80E can be claimed by individuals against the payment of interest on the loan taken for higher education. The maximum period until the deduction can be availed is 8 years.
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Section 80G Deduction:
Under Section 80G, the deduction can be claimed on the donations to charitable institutes (within the ceiling amount of 10% of the gross taxable income) and other certain funds. The maximum deduction limit is INR 2,000.
What are the Income Tax Forms?
There are 9 ITR forms for each type of tax situation:
| Form Type | Tax Situation |
| ITR Form 1 | For individuals who receive regular salaries or pension from residential properties or other sources. |
| ITR Form 2 | This form is for HUF who whose income falls under other any sources except the profits and gains of the profession or business. |
| ITR Form 3 | This form is for HUF who whose income fall under the head of profits and gains of the profession or business. |
| ITR Form 4S | Also known as SUGAM, this form is applicable to HUFs and individuals who have opted for SUGAM taxation as per section AD/AE. |
| ITR Form 4 | Applicable for professional and proprietor HUFs and individuals. |
| ITR Form 5 | For LLPs, Firms, BOIs, AOPs, artificial judiciary persons, local authorities. |
| ITR Form 6 | For companies which claim no exemptions as per Section 11. |
| ITR Form 7 | For persons who are required to file returns as per Sections 139(4A), 139(4D), 139 (4C), and 139 (4B). |
| ITR Form V | The form to acknowledge that the Income Tax Return is filed. |
What are the Documents required while Income Tax E-filing?
The following are the documents required while Income Tax E-filing:
- Basic information —Pan Card, Aadhar Card, and current address.
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Bank account details. It is mandatory to disclose while income tax e-filing.
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Details of the income from all the sources—salary, savings bank account, fixed deposits, etc.
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Information related to the deductions you’ve claimed under the Section 80 of Income Tax Act.
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Produce all the tax payment information, such as advance tax payments and TDS.
How to Prepare and Submit ITR Online?
For Income Tax e-filing, follow the below mentioned steps:
- Login to the Income Tax e-filing website with the help of USER ID, password, DOB, and Captcha.
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Then go the e-File and click – Prepare and Submit ITR Online. Noteworthy, only ITR 1 & ITR 4S can be filled online.
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Now, select the Income Tax Return Form – ITR 1 or ITR 4S and the assessment year.
- Fill all the required details and click SUBMIT.
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Upload DSC (Digital Signature Certificate), if applicable. Ensure that your DSC is registered with e-filing. Click the submit button.
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After successful submission, ITR V form will be displayed (only when DSC is not used). You can click on the link and download the form. Also, the form will be sent to your registered e-mail.
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If the return is not uploaded with DSC, the ITR V form should be printed, signed and submitted to the CPC within 120 days of income tax e-filing.
Income tax e-filing offers a number of benefits, ranging from easy processing of the business loan and foreign travels to tax refunds and passport application.