With only a few days remaining before the last date of filing your tax returns, let’s have a look at the tax slabs, as well as the various steps through which you can file your tax returns.
In India, income tax is levied on individual taxpayers on the basis of a slab system where different tax rates have been prescribed for different slabs (based on the income of an individual person).
In fact, tax rates keep increasing with an increase in the income slab (revised during the annual budget in the month of February)
Further, the budget did not announce any changes in income tax slabs this time; therefore, it remains the same as that of last year.
|Income up to Rs. 250,000||NIL||–|
|Income from Rs. 250,001- 500,000||5%||4% of Income Tax|
|Income from Rs. 500,001- 10,00,000||20%||4% of Income Tax|
|Income more than 10,00,000||30%||4% of Income Tax|
In addition to the above tax rates and cess charges, a surcharge of 10% of income tax is levied, where the total income exceeds Rs. 50 lakhs, up to Rs. 1 crore.
Also, if the total income exceeds Rs. 1 crore, the surcharge applicable is 15%.
For senior citizens (60- 80 years old), no tax is applicable up tan o income of Rs. 300,000.
Whereas for a super senior citizen (80 years or more) this amount is Rs. 500,000.
Post this; the tax slabs for all senior and super senior citizens remain the same.
The first step is to collect all the required documents one will need to file the ITR, such as Form 16, salary slips from the employer, and interest certificate forms.
The documents aid in the calculation of total tax liability and also provide the details of tax deducted at source (TDS) from income in the financial year.
TDS certificates should be digitally signed and the amount of tax deducted as shown in the TDS certificate should match the amount shown in the salary slip.
Form 26AS is a document that shows all the details of tax that has been deducted from one’s income during the financial year and deposited against the PAN.
One can download the tax credit statement, i.e., Form 26AS from the TRACES website.
To download this, the first step is to log in to one’s account, then click on ‘My Account’ tab and select ‘View Form 26AS’.
The website will redirect to TRACES.
Once someone has verified all the taxes that have been deducted from his/her income, he/she can compute the total income chargeable to tax.
Total income is computed by adding incomes from the five different heads and claiming all the relevant deductions allowed under the Income Tax Act.
The Five Heads of Income Are as Follows:
After computing one’s total income, the next step is to calculate the total tax liability by applying the tax rates in force for the particular financial year, (FY 2017-18 is highlighted in the above chart) as per one’s income slab.
After computation of the tax liability for the financial year, the next step is to compute the total tax liability by deducting taxes that have been already paid through TDS, TCS, and Advance Tax during the year.
The next step is to add interest (if any), payable under sections 234A, 234B, and 234C.
Interest under section 234 A– Default in furnishing the return of income;
Interest under section 234 B– Default in payment of advance tax;
Interest under section 234 C– Deferment of advance tax
This will tell you if the taxes are already paid by the assessee if any additional tax has to be paid or if the assessee has paid any excess taxes and a refund is due.
Any additional tax can be paid physically via cheque or online, using challan ITNS 280.
Once taxes have been paid, one is required to file the ITR.
Even if someone has an income tax refund due, he/she is required to file ITR.
While filing ITR, one needs to ensure that they are using the correct ITR form to file it. If someone files the ITR using the wrong form, then it will be termed as a defective return and will therefore be required to file it again.
|ITR 1 (SAHAJ)||Individuals with income from salary and interest|
|ITR 2||Individuals and Hindu Undivided Families (HUF) not having income from business or profession|
|ITR 3||Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship|
|ITR 4||Individuals and HUFs having income from a proprietary business or profession|
|ITR 4S (SUGAM)||Individuals/HUF having income from presumptive business|
|ITR 5||Firms, AOPs, BOIs and LLP|
|ITR 6||Companies other than companies claiming exemption under section 11|
|ITR 7||Persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)|
The last process of filing your ITR is verification.
There are six ways to verify the ITR. Out of this, five are electronic methods and one is the physical verification of the ITR.
If someone wishes to verify the tax return electronically, he/she will not be required to send any documents to the tax department. It can be done through any of the electronic modes as mentioned below:
The 5 Methods are as follows:
Once the assessee has received the acknowledgment of e-verification, the filing of the income tax return is complete.
After receiving the ITR-V, either through e-verification or physically, the income tax department will process the return to ensure that all the details filled by you are correct and as per the Income Tax Act.
They will also cross-check the details filed by the assessee with other available data.
It becomes all the more important to file tax returns on time, as there is a penalty for missing the deadline. The maximum penalty is Rs 10,000.
Disclaimer: The views expressed in this post are that of the author and not those of Groww