Income Tax Slab:
| Income Tax Slab | Tax rate - Individuals |
|---|---|
| Up to `2,50,000 | Nil |
| 2,50,001 to 5,00,000 | 5% |
| 5,00,001 to 10,00,000 | 12,500 + 20% of total income exceeding 5,00,000 |
| Above 10,00,000 | 1,12,500 + 30% of total income exceeding 10,00,000 |
The Finance Act, 2020 has introduced new optional tax regime :
- No Tax – Upto Rs 2.5 Lakhs
- 5% Tax – Between 2.5 Lakhs to 5 Lakhs
- 10 % Tax – Between 5 Lakhs to 7.5 Lakhs
- 15 % Tax – Between 7.5 Lakhs to 10 Lakhs
- 20 % Tax – Between 10 Lakhs to 12.5 Lakhs
- 25 % Tax – Between 12.5 Lakhs to 15 Lakhs
- 30% Tax – Above 15 Lakhs
Individuals can choose between two tax options. Under the new regime, they pay lower taxes but lose exemptions and deductions available in the old tax system. Alternatively, they can continue with the existing tax slab rates.
The below exemptions are Not Allowed:
- Deductions under Chapter VI-A (like 80C, 80D, 80E, etc.) are available, excluding Section 80CCD(2).
- Other deductions include housing loan interest
- Salary – Standard Deduction
- Education allowance for children
- House Rent Allowance
- Leave Travel Allowance
It's recommended to opt for the new tax regime with fewer investments.
Three categories of “individual”
- Individuals - less than of 60 years of Age
- Resident Senior citizens - More Than 60 and Less than 80 years of age
- Resident Super senior citizens - More than 80 years of Age
ITR Forms:
FORM ITR-1 – Sahaj For individuals earning up to Rs. 50 lakh from salary, one house property, or other sources (like interest).
FORM ITR-2 - For individuals and HUFs without business income, ineligible for Sahaj filing.
FORM ITR-3 – For those earning from business or profession.
FORM ITR- 4 - For individuals, HUFs, and firms with income up to Rs. 50 lakh under presumptive taxation rules.
FORM ITR-5 – Partnership firms and LLPs can use this form.
FORM ITR-6 – Companies can file with this form.
FORM ITR-7 - Political parties and charitable institutions use this form.
Due date for filing an Income tax Return:
- Individuals and Non-Audit Cases: July 31st of the assessment year.
- Audit Cases: September 31st of the assessment year.
Income tax / Proprietorship:
Proprietorship Filing income tax for proprietorship is like filing for an individual. Proprietors under 60 years must file if their income exceeds Rs. 2, 50,000. This slab differs from LLPs and Companies.
Income tax-Limited liability Partnership/Partnership companies/private limited company
Limited Liability Partnerships (LLPs) and partnership companies pay 30% income tax. If income exceeds a crore, an additional 12% surcharge applies. Public limited companies are taxed at 25% of total earnings.
Penalty on Income tax:
Financial reports must be submitted at the fiscal year's end, with the New Year beginning on April 1st for business progression. The government sets July 31st as the deadline for ITR filing. Penalties for late submission are Rs. 5,000 per day before December 31st and Rs. 10,000 thereafter.
Documents Required
2. Investment details for eligible deductions (e.g., 80C, 80 CCC, 80 CCD, 80 CCG, 80D, 80 DD, 80 DDB, 80E, 80G, 80 GG, 80GGC, 80TTA, 80 TTB, 80U).
3. Aadhaar Card Copy and Pan Card Copy.
4. Source of Income
- Declare - Salary Income
- Declare - Rental Income (from owned or shared property)
- Declare - Income from Business or Profession ( Profit sharing or Salary from the Firm or Company )
- Declare - Capital Gain ( Any property or Shares or Mutual funds or PF etc, sold )
- Declare - Any income from other sources
- LIC Policy Premiums
- Rent Payments
- School Fees for children
- Housing Loan details( Provide the split up - Interest part and Principle part )
- Donations paid
- Health insurance premium Paid