Income Tax

Income Tax is a type of tax imposed on individuals and entities earning income or profits that cross certain thresholds. These taxes are a source of income for the government, which it utilises for various functions like: 

• To develop infrastructure

• Provide healthcare and improve sanitation

• Promote education and introduce welfare schemes

To calculate your tax liability, you need to multiply the tax rate by your taxable income. However, tax rates may vary depending on the type of taxpayer and the type of income. Hence, it is imperative to ascertain the tax slab you belong to.

Since income tax is a vast and crucial topic, read on to learn everything about income tax in India.

Every ‘person’, be it natural or artificial, as defined in Section 2(3) of the Income Tax Act of 1961, must pay tax. The tax authorities divide them into the following categories:

• Individuals 

• Hindu Undivided Families (HUFs)

• Association of Persons (AOPs)

• Body of Individuals (BOIs)

• Firms, LLPs, and Companies

• Local authority

• Any other artificial juridical person

The Income Tax Department sets due dates for different activities each assessment year. You need to file your Income Tax Return (ITR) for the previous financial year before the deadline to avoid attracting a penalty.

A financial year is the year in which you earn income. On the other hand, an assessment year is the period in which the returns were filed, i.e. the subsequent year. Both start and end on April 1 and March 31, respectively.

Here are the details of the due dates for filing income tax returns for Assessment Year 2023-24. The revised tax extension dates are as follows:

With the Union Budget 2020, the Finance Ministry of India released a new income tax structure that came into effect from April 1, 2020. However, this new income tax regime is optional. 

Taxpayers can either opt for it or continue using the old income tax structure at the start of each financial year (FY). This choice allows taxpayers to choose one that has suitable income tax rates, basis their income. 

The following table gives a brief overview of the tax slabs under the two income tax regimes:

You can either calculate income tax manually or use an online income tax calculator. The amount of tax payable to the government depends on the tax applicable to you. For salaried individuals, their income from salary includes multiple components like: 

• House Rent Allowance (HRA)

• Transport Allowance

• Children Education Allowance (CEA)

A few components of a salary are exempt from tax. So, while calculating TDS on salary, it is imperative to ensure you have subtracted relevant tax exemptions from your total income. Along with the exemptions, salaried people can also avail of a standard deduction of ₹50,000.

Moreover, you can also pay your income tax online, and in advance. Calculating your tax liability beforehand and paying your taxes accordingly is called advance tax. However, if you want to follow advance tax, here are a few important dates you must remember:

The Income Tax Department is a government agency that undertakes the duty of collecting direct tax in India. Every operation of this department is handled by CBDT (Central Board for Direct Taxes). 

You can visit their official website to garner information on international taxation, tax laws and rules, organisational setup, etc.

Introduced in 1961, the Income Tax Act of India manages all income tax provisions and tax deductions applicable to each individual. The Act has witnessed countless changes and amendments to tackle various economic crises ever since it was passed.  

The Income Tax Rules, 1962, were created to effectively enforce the law legislated by the Act. Furthermore, the Income Tax Rules can only be read along with the Income Tax Act. These rules complement the Income Tax Act and do not override its provisions.

The ITR status facility is available in two ways:

• Pre-Login

• Post-Login

Both options are fairly simple, much like the process of paying tax online, and you can follow the guides below.

Follow the steps below if you opt for the pre-login facility to check your ITR status online:

1. Go to the new ITR e-Filing portal (www.incometax.gov.in/iec/foportal/)

2. On the homepage, select Income Tax Return (ITR) status

3. Enter your Acknowledgement Number and registered mobile number to continue

4. You will receive a six-digit OTP on your registered number. Enter it and select ‘Submit’

5. On successful validation, you will be able to view your ITR status online

Follow the steps below if you opt for the post-login facility to check your ITR status online:

1. Log in to the new income tax website or the IT e-Filing portal (www.incometax.gov.in/iec/foportal/) using your credentials

2. Select the option ‘e-File’ > ‘Income Tax Returns’ > ‘View Filed Returns’

3. On the ‘View Filed Returns’ page, you will be able to view all the returns you have filed historically

You can also browse through the various tax-saving tools available on Bajaj Markets. The investment options available on our platform not only allow you to save on tax but also secure your financial future.