INDIVIDUAL RETURN PREPARATION
Preparing an individual income tax return in India involves several steps Here’s a guide to help you prepare your income tax return in India:
- Gather Necessary Documents:
Collect all relevant documents such as Form 16 (issued by your employer), which provides details of your salary income and tax deducted at source (TDS), bank statements, investment statements (like mutual funds, stocks, etc.), property documents, and any other income-related documents like interest earned on savings accounts or fixed deposits. - Register and Login on the Income Tax Department Portal:
Individuals can file their income tax returns online through the Income Tax Department’s e-filing portal. Register yourself on the portal if you haven’t already, and login using your credentials. - Select the Appropriate Income Tax Return Form:
Choose the correct income tax return (ITR) form based on your sources of income and other criteria. For example, if you have only salary income, you’ll typically file ITR-1, while if you have income from business or profession, you might need to file ITR-3 or ITR-4. - Fill in Personal Information:
Enter your personal details such as name, PAN (Permanent Account Number), address, and contact information. - Declare Income:
Declare all sources of income, including salary income, income from house property, capital gains (if any), income from other sources like interest, etc. - Claim Deductions and Exemptions:
Deductions under various sections of the Income Tax Act, such as Section 80C (for investments like Provident Fund, PPF, ELSS, etc.), Section 80D (for health insurance premiums), and exemptions like HRA (House Rent Allowance) if applicable. - Compute Total Taxable Income:
Calculate your total taxable income after considering deductions and exemptions. - Calculate Tax Liability:
Use the income tax slabs applicable for the relevant financial year to compute your tax liability. You can find these slabs on the Income Tax Department’s website or through various tax calculators. - Pay any Remaining Tax:
If there is any tax due after considering TDS already deducted by your employer and advance tax paid, pay the remaining tax through the e-filing portal. - File Your Return Online:
Complete the remaining sections of the income tax return form and file your return online on the Income Tax Department’s e-filing portal. - Verify Your Return:
After filing your return, it needs to be verified within a specified period. This can be done electronically using Aadhaar OTP, net banking, or by sending a signed physical copy of ITR-V to the Centralized Processing Centre (CPC) within 120 days of filing. - Keep Records:
Maintain copies of all documents and your tax return for future reference. It’s important to keep records of your financial transactions and tax filings for at least six years.
INCOME TAX SLABS FY 2023-24 & AY 2024-25
The income tax slabs are different under the old and the new tax regimes. Further, the slab rates under the old tax regime are divided into three categories
Indian Residents aged < 60 years + All the non-residents
60 to 80 years: Resident Senior citizens
More than 80 years: Resident Super senior citizens
What is an Income Tax Slab?
In India, the Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person’s income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget. These slab rates vary for different groups of taxpayers.
What Happens if You Miss the ITR Filing Deadline?
- Interest: If you submit your return after the deadline, you will be liable to pay interest at a rate of 1% per month or part month on the unpaid tax amount as per Section 234A.
- Late fee: In case of late filing, Section 234F imposes a late fee of Rs.5,000, which shall be reduced to Rs.1,000 if your total income is below Rs.5 lakh.
- Loss Adjustment: In case you have incurred losses from sources like the stock market, mutual funds, properties, or any of your businesses, you have the option to carry them forward and offset them against your income in the subsequent year. This provision substantially reduces your tax liability in future years. However, you will not be allowed to carry forward these losses if you miss filing your ITR before the deadline.
- Belated Return: If you miss the ITR filing due date, you can file a return after the due date, called a belated return. However, you will still have to pay the late fee and interest charges, and you will not be allowed to carry forward any losses for future adjustments. The last date for filing a belated return is 31st December of the assessment year (unless extended by the government). Therefore, for this year, you may submit the belated return by 31 December 2024 at the latest.
- Updated return: Still, if you miss the 31st December deadline due to unavoidable reasons still you can file the updated (ITR U) return subject to the conditions specified therein.
If you’re unsure about any aspect of your tax return, it’s advisable to seek assistance from a tax consultant that provide step-by-step guidance
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