Income Tax in India

What is Income Tax?

Income Tax is the percentages of the amount payable to the government from the income earned on annual bases. Income tax is imposed by the government to function to provide the infrastructure growth and to pay the government employees as well as provide various other facilities to the society.  These tax are imposed based on the Income Tax Act, 1961

Income Tax in India

Income Tax Act, 1961

Income Tax Act, 1961 directs the Income Tax department on the tax collection, administration and recovery of the income tax from the individual. It consists of various sections that look after the various situation and implementation of the law as per the norms decided to benefit and protect the individual. According to the Income Tax Laws, the following categories are taxed-

  • Salaries
  • Profit and gains earned
  • Income from House/property
  • Capital gains
  • Income from other sources

Income Tax Calculations

The Income tax is filed by the individual annually on the bases of “Previous Year” or “Assessment Year”

Previous Year– Previous Year or Financial Year begins on the 1st of April of the current year and ends on the 31st March of the next year.

Assessment Year– Assessment Year is the year that comes after Previous Year and is the upcoming financial year

Union Budget 2019 affect on Income Tax

Finance Minister Piyush Goyal announced the Budget for the upcoming financial year 2019 that is focused on the development and growth of the country. This Budget provides relief for individual taxpayers. The following are a few pointers that significantly affect the Union Budget 2019.

  • The Rebate under the Income Tax Act, 1961 Section 87A has been raised to Rs.12,500 which is applicable only to the Income under Rs.5 Lakhs
  • Exemption from the Tax Rent in the case of two Self Occupied properties is also proposed. Anyone having two self-occupied house will have to pay for anyone of the two houses.
  • The standard deduction has been changed from Rs.40,000 to Rs.50,000.
  • The limit of TDS on interest received from the bank or Post Office has increased to Rs.40,000

Income Tax Slab for 2019-20

Income Tax Slab for Hindu Undivided Family (HUF) 2018-19

Annual Income Tax Rates Health and Education Cess
Up to Rs.2.5 lakh*  Nil  Nil 
Rs.2,50,001-Rs.5 lakh  Nil  4% of Income Tax 
Rs.5,00,001-Rs.10 lakh  20%  4% of Income Tax 
Above Rs.10 lakh  30%  4% of Income Tax 
Surcharge When the total income is Rs.50 lakh or more but less than Rs.1 crore, the surcharge is 10% of the income tax
Surcharge When the total income is more than Rs.1 crore, the surcharge is 15% of the income tax. 

Income Tax Slab for Senior Citizen 2018-19

Annual Income Tax Rates Health and Education Cess
Up to Rs.3 lakh*  Nil  Nil 
Rs.3,00,001-Rs.5 lakh  Nil  4% of Income Tax 
Rs.5,00,001-Rs.10 lakh  20%  4% of Income Tax 
Above Rs.10 lakh  30%  4% of Income Tax 
Surcharge When the total income is Rs.50 lakh or more but less than Rs.1 crore, the surcharge is 10% of the income tax
Surcharge When the total income is more than Rs.1 crore, the surcharge is 15% of the income tax. 

Income Tax Slab for Super Senior Citizen 2018-19

Annual Income Tax Rates Health and Education Cess  
Up to Rs.5 lakh*  Nil  Nil 
Rs.5,00,001-Rs.10 lakh  20%  4% of Income Tax 
Above Rs.10 lakh  30%  4% of Income Tax 
Surcharge When the total income is Rs.50 lakh or more but less than Rs.1 crore, the surcharge is 10% of the income tax
Surcharge When the total income is more than Rs.1 crore, the surcharge is 15% of the income tax. 

Income Tax Slab for Domestic Companies

Turnover Particulars  Tax Rates
If the gross turnover in the previous year is less than Rs.250 crore  25% 
If the gross turnover in the previous year is more than Rs.250 crore  30% 
Cess 4% of the corporate tax
Surcharge  When the taxable income is higher than Rs.1 crore but less than Rs.10 crore, the applicable surcharge will be 7%. 
Surcharge  When the taxable income is higher than Rs.10 crore, the applicable surcharge will be 12%

Income Tax Return (ITR)

Income Tax Return is the option provided by the government to save on the Tax payable by investing in some financial instruments. This kind of Investment can be declared for Tax Deduction under Section 80c and 80D that can provide a reduction of Rs.1.5 Lakhs and Rs.25,000 form the annual income respectively.

An Individual can claim the tax refund by declaring the investment made on a component such as House Rent Allowance, Life Insurance, Mutual Fund Investment, FD, Tuition Fee etc. All this information needed to be mentioned in Form 16. An Individual can find the statues of the Income Tax Refund by visiting the Income Tax e-Filling portal. Also, you can Call CPC Bangalore on 1800-4250-0025 (toll-free) number to check for the status of the income tax refund

How to File ITR Online?

Online ITR Filling is the best method of filling the Income Tax Refund as it is simple, fast and can be filled form the home or office. You can follow these steps to file the ITR Online-

List of Required Documents

General details:

  • Bank account details
  • PAN Number

Reporting salary income:

  • Rent receipts for claiming HRA
  • Form 16
  • Pay slips

Reporting House Property income:

  • Address of the house property
  • Details of the co-owners including their share in the mentioned property and PAN details
  • Certificate for home loan interest
  • Date when the construction was completed
  • Name of the tenant and the rental income, in case the property is rented

Reporting capital gains:

  • Stock trading statement is required along with purchase details if there are capital gains from selling the shares
  • In case a house or property is sold, you must sought sale price, purchase price, details of registration and capital gain details
  • Details of mutual fund statement, sale and purchase of equity funds, debt funds, ELSS and SIPs

Reporting other income:

  • The income from interest is reported. In case of interest accumulated in a savings account, bank account statements are required
  • Interest income from tax saving bonds and corporate bonds must be reported
  • The income details earned from post office deposit must be reported

File ITR Online

  • Login to e-Filing website with the User ID, Password, Date of Birth /Date of Incorporation and Captcha.
  • Go to e-File and click on “Prepare and Submit ITR Online”.
  • Select the Income Tax Return Form ITR 1/ITR 4S and the Assessment Year.
  • Fill in the details and click the “Submit” button.
  • Upload Digital Signature Certificate (DSC), if applicable.
  • Click on the “Submit” button.
  • On successful submission, ITR-V would be displayed (if DSC is not used). If ITR is uploaded with DSC, the Return Filing process is complete. 

Note:-Click on the link and download the ITR-V. ITR-V will also be sent to the registered email.
OR
The ITR-V Form should be printed, signed and submitted to CPC within 120 days from the date of e-Filing. The return will be processed only upon receipt of signed ITR-V.