Income Tax - IT Returns, e-filing, Tax Slab for FY 2019-20 Last Updated : 17 Oct 2019

Read more about Income Tax Slabs, e-Filing Income Tax, Income Tax Refund and Income Tax Return

How to file ITR (Income Tax Return) online – eFile ITR?

With the due date for ITR filing just round the corner, here is all you need to know about how to file ITR online. Before you file your taxes, you will need your Form 16, provided by your employer, and any proof of investment. Using that you can compute the tax payable and refunds, if any, for the year. You can download the IT preparation software from the IT department’s website. Once you have all the documents ready, you can start the filing process.

efiling Income Tax:

e-Filing Income Tax Return, TDS return, AIR return and Wealth Tax Return online through this link https://incometaxindiaefiling.gov.in. e-filing your return has obvious advantages like the fact that you won’t have to deal with the hassle of paperwork and waste time sorting through it all. You can simply log on to the secure website and e-file your return.

This government website also has provisions for you to submit returns, view forms 26AS, outstanding tax demand, CPC refund status, rectification status, ITR – V receipt status, online application tools for PAN and TAN, e-pay your tax and even has a tax calculator.

What is Income Tax?

Income tax is defined as the tax charged on the annual income earned by a person. The amount of tax applicable to you will depend on how much money you earn as income over the course of a financial year. Taxpayers can make their income tax payment, TDS/TCS payment, and Non-TDS/TCS payments online as well. All relevant details must be filled by taxpayers in order to make these payments. The process to make the payments online is simple and can be completed quickly. 

Income tax for FY 2019-20 is applicable to all residents whose annual income exceeds Rs.2.5 lakh p.a. The highest amount of tax an individual could pay is 30% of their income plus cess at 4% if their income is more than Rs.10 lakh p.a.

Income Tax Department

A government agency that undertakes the direct collection of tax in India is the Income Tax Department. All operations of the department are handled by the Central Board for Direct Taxes (CBDT). Individuals can get various details such as international taxation, tax laws and rules, organisational setup, etc., on the official website of the department.

Income Tax Act

Passed in 1961, the Income Tax Act of India handles all income tax provisions as well as any tax deductions that may be applicable. Since its introduction, there have been many changes to the law because of economic situations and inflation.

Income Tax Rules

The legislature enacts the Income Tax Act, 1961, to administer and govern income tax in the country, but the Income Tax Rules, 1962, were created in order to help in the application and enforcement of the law constituted in the Act. Moreover, the Income Tax Rules can only be read in conjunction with the Income Tax Act. The Income Tax Rules?are within the framework of the Income Tax Act are not allowed to override its provisions.

Who should pay Income Tax in India?

The amount of tax that must be paid depends on the individual’s age and the income they make. The entities listed below?are required to pay tax and file their income tax returns.

  • Artificial Judicial Persons
  • Corporate firms
  • Association of Persons (AOPs)
  • Hindu Undivided Families (HUFs)
  • Companies
  • Local Authorities
  • Body of Individuals (BOIs)

Important Dates to Remember when Paying Income Tax

The important dates to remember for individuals who fall under the bracket to pay Income Tax for the year(FY 2019-20 & AY 2020-21) is mentioned in the table below:

Important Due Dates The task that must be completed
Before January 31 Individuals must submit their proof of investment
Before March 31 It is deadline before which any investments under Section 80C of the Income Tax Act, 1961 must be made
Before 31 July Due date to file income tax return
Between October and November Tax returns must be verified by this time

Income Tax Collection 

Taxes are collected by the government in three primary ways: 

  1. Voluntary payment by taxpayers into designated banks, like advance tax and self-assessment tax. 
  2. TDS (Taxes Deducted at Source) which is deducted from your monthly salary, before you receive it. 
  3. TCS (Taxes Collected at Source). 

Under the Department of Revenue of the Ministry of Finance, the Income Tax Department (IT Department) is responsible for monitoring the collection of Income Tax, Expenditure Tax, and various other Financial Acts that are passed every year in the Union Budget. The Central Board of Direct Taxes (CBDT) regulates the policy and planning of taxes. CBDT is also responsible for administering the direct tax laws through the IT Department. In addition to the collection of taxes, the IT department is also involved in prevention and detection of tax avoidance. 

Income Tax Calculator

Income tax calculation can be done either manually or by using an online income tax calculator. The income tax rate applicable to you will depend on the tax slab under which you fall. For salaried employees, income from salary includes the basic pay plus House Rent Allowance (HRA) plus Transport Allowance plus Special Allowance plus any other allowance. However, certain components of your salary are tax exempt, like Leave Travel Allowance (LTA), reimbursement of telephone bills, etc. In case HRA is part of your salary and you reside in a rented?house,?you are eligible to claim exemption on the HRA. Apart from these exemptions, there is a standard deduction of up to Rs.50,000.

Online Income Tax Payment

Taxpayers can pay direct taxes online by using the e-Payment facility. In order to avail the online tax payment facility, taxpayers must have a net-banking account with an authorised bank. The Permanent Account Number (PAN) or Tax Deduction and Collection Number (TAN) will have to be provided for validation as well. 

Types of Income Tax Slabs for FY 2019-20

The income earned individuals will determine the income tax slabs under which they fall. The lower the income, the lower the tax liability, and those who earn less than Rs.2.5 lakh p.a. are exempt from tax.

Depending on the age of the individual, the three categories that resident individual taxpayers are divided into are mentioned below:

  • Individuals who are less than the age of 60 years old.
  • Senior citizens who are above 60 years old and below 80 years of age.
  • Super senior citizens who are above 80 years old.

Here is the income tax slab for individuals who are less than 60 years old:

Income Tax Slab Tax Rate
Up to Rs.2.5 lakh Nil
Rs.2.5 lakh to Rs.5 lakh 5% of the amount exceeding Rs.2.5 lakh
Rs.5 lakh to Rs.10 lakh Rs.12,500 + 20% of the amount exceeding Rs.5 lakh
More than Rs.10 lakh Rs.1,12,500 + 30% of the amount exceeding Rs.10 lakh

*An additional cess of 4% will be applicable to the tax amount calculated above.

Income tax is only of the direct means of taxation like capital gains tax, securities transaction tax, etc., and there are many other indirect taxes that we pay like sales tax, VAT, Octroi, service tax, etc.

The income tax you pay every month or upon every contractual earning is what forms a large part of the revenue for the Government of India. These revenue functions are managed by the Ministry of Finance, which has delegated the responsibility to managing direct taxes (like income tax, wealth tax, etc.) to the Central Board of Direct Taxes (CBDT).

ITR(Income Tax Return) Forms:

If an individual needs to claim income tax refund, he/she will need to first file his/her income tax return. Depending on the income assessment group, the individual will need to submit one of the ITR forms listed below:

ITR Form Name Description
ITR-1 For Individuals having Income from Salaries, One house property, Other sources (Interest etc.)
ITR-2 For Individuals and HUFs not having Income from Business or Profession
ITR-2A For Individuals and HUFs not having Income from Business or Profession and Capital Gains and who do not hold foreign assets
ITR-3 For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
ITR-4 For individuals and HUFs having income from a proprietary business or profession
ITR-4S Presumptive business income tax return
ITR-5 For persons other than, - (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7
ITR-6 For Companies other than companies claiming exemption under section 11
ITR-7 For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)
ITR-V The acknowledgment form of filing a return of income

In order to file the ITR, an individual will require producing the bank statement, Form 16, and a copy of previous years' return. The individual will need to visit the Income Tax Department's website - https://incometaxindiaefiling.gov.in/ to register and file the returns.

Income Tax Refund

In case you have paid more tax than your actual tax liability, you will be eligible to claim an income tax refund of the extra money you have paid. For example, if your TDS liability for FY 2018-19 was Rs.35,000 and your employer deducted Rs.40,000 instead, you can claim a refund for the additional Rs.5,000 that was deducted. You can also claim an income tax refund in case you forgot to declare your tax-saving investments and tax has been charged to you without taking your deductions into consideration. Individuals can check the status of the refund on the official website of Income Tax Department

Income Tax Saving Investments

Declaring investments - From HRA, Life Insurance Premiums, National Savings Certificate, Leave Travel Allowance to Fixed Deposit (minimum of 5 years), ELSS Tax Saving Mutual Funds, and more, by ensuring that you have declared all your investments, you can achieve more deductions on tax. The following options can be considering for saving on income tax:

  1. Investment options
    • Mutual funds such as Equity Linked Savings Schemes (ELSS) can be claimed for tax deduction under Section 80C. Compare to fixed deposits and PPF’s, the ELSS offers shorter lock-in period and more benefits when it comes to making money.
    • Unit Linked Insurance Plans (ULIP) are insurance schemes that are linked to the market. The investment made under ULIP qualifies for tax deductions.
  2. Insurance
    • Life insurance and health insurance - The money paid towards life insurance and health insurance policies are considering for tax deductions under Section 80C
  3. Loans
    • When we take a loan for buying a house or for renovation purpose, we are eligible for tax deductions up to Rs.1.5 lakh for a financial year.

You can also consider the following options for reducing tax amount on your income:

  • Fixed Deposits (FD) - An FD with a lock-in period of five years can help you save on tax while earning the interest on the deposited amount.
  • National Saving Certificate (NSC) - The NSC offers a safe and reliable method of investing money. You can deposit as low as Rs.100 for a 5-10 year lock-in period. The investments made under NSC are eligible for tax deductions.
  • Provident Fund (PF) - You can also choose to invest more amount towards your PF account that will help you reduce your taxable amount.

Advance Tax

The calculation of tax liability before-hand and paying the taxes to the government accordingly is called advance tax. There are certain deadlines for the advance tax payments. These deadlines are listed below:

Due Date Advance Tax Payable
On or before 15th June 15% of advance tax
On or before 15th September 45% of advance tax
On or before 15th December 75% of advance tax
On or before 15th March 100% of advance tax

Calculation of advance tax:

  • Step – 1: An individual will be required to find his/her estimated total income by finding out the sum of all the invoices which have been received along with the future payments which he/she will be receiving till the end of the financial year, i.e. 31 March.
  • Step – 2: The direct expenses related to the business and the investments under Section 80C are to be deducted from the estimated total income to derive the total taxable income.
  • Step – 3: The next step is to determine the total tax liability for the financial year.
  • Step – 4: The TDS or tax deducted at source should be deducted from the total tax liability.
  • Step – 5: In case the amount of tax liability after deducting the TDS is more than Rs.10,000, the individual will be required to pay advance taxes on the basis on or before the due dates which are mentioned above.

Income Tax deductions

Deductions for your taxable amount are available under various sections of the Income Tax Act, 1961. Deductions will have to be mentioned in the relevant ITR form at the time of e-filing income tax returns.

Section 80C:

Deductions under this section are only available to individuals and HUF. This section allows for certain investments like NSC, etc. and expenditures to be exempt from taxation up to the amount of Rs.1.5 lakh

Section 80CCC:

Deductions under this section are on payments made to LIC or any other approved insurance company under an approved pension plan. The pension policy must be up to Rs.1.5 lakh and be taken for the individual himself out of the taxable income.

Section 80CCD:

Deductions under this section are for contributions to the New Pension Scheme by the assessee and the employer. The deduction is equal to the contribution, not exceeding 10% of his salary.

The total deduction available under Section 80C, 80CCC and 80CCD is Rs.1.5 lakh. However, contributions to the Notified Pension Scheme under Section 80CCD are not considered in the Rs.1.5 lakh limit.

Section 80D:

This is the section that deals with income tax deductions on health insurance premiums paid. In the case of individuals, the insurance policy can be taken to cover himself, spouse, dependent children – for up to Rs.15,000 and parents (whether dependent or not) – for up to Rs.15,000. An additional deduction of Rs.5,000 is applicable if the insured is a senior citizen. In the case of HUF, any member can be insured, and the general deduction will be for up to Rs.15,000 and an additional deduction of Rs.5,000.

A total of Rs.2.0 lakh can be claimed as deductions whether the assessee is an individual or a HUF.

Section 80DDB:

This section is for deductions on medical expenses that arise for treatment of a disease or ailment as specified in the rules (11DD) for the assessee, a family member or any member of a HUF.

Section 80E:

This section deals with the deductions that are applicable on the interest paid on education loans for an education in India.

Section 80EE:

This section deals with tax savings applicable to first time home-owners. Applies for individuals whose first home purchased has a value less than Rs.40 lakh and the loan taken for which is Rs.25 lakh or less.

Section 80RRB:

Deductions with respect to income by way of royalties or patents can be claimed under this section. Income tax can be saved on an amount up to Rs.3.0 lakh for patents registered under the Patents Act, 1970.

Section 80TTA:

This section deals with the tax savings that are applicable on interest earned in savings bank accounts, post office or co-operative societies. Individuals and HUFs can claim a deduction on an interest income of up to Rs.10,000.

Section 80U:

This section deals with the flat deduction on income tax that applies to disabled people, when they produce their disability certificate. Up to Rs.1.0 lakh can be non-taxed, depending on the severity of the disability.

Section 24:

This section deals with the interest paid on housing loans that is exempt from taxation. An amount of up to Rs.2.0 lakh can be claimed as deductions per year, and is in addition to the deductions under Sections 80C, 80CCF and 80D. This is only for self-occupied properties. Properties that have been rented out, 30% of rent received and municipal taxes paid are eligible for tax exemption.

Frequently Asked Questions - Income Tax

Who is required to pay income tax?

Any individual or artificial body or group of individuals that earns more than the basic exemption limit are expected to pay income tax. Under the Income Tax Act, the persons liable to pay income tax include individuals, Association of Persons, Hindu Undivided Families, Body of Individuals, companies, artificial judicial persons, firms and local authorities. 

Where should I invest to save income tax?

There are various instruments in which you can invest to save tax. Some of the most common options available to you include PPF, National Savings Certificate, National Pension System, ELSS schemes, etc.

Is the due date for filing tax returns the same for all taxpayers?

All individuals and assessees who do not require their accounts to be audited will have to file their income tax returns by July 31. However, companies, individuals and working partners of firms whose accounts must be audited are required to file their income tax returns by September 30. Assessees who are required to submit a report under Section 92E of the Income Tax Act must file their returns by November 30. 

News About Income Tax

  • Government to increase taxation for MNCs such as Google and Facebook

    The Government of India had proposed special taxations for digital companies. Now, the Organisation for Economic Cooperation and Development (OECD) has come up with a proposal to expand government rights to tax multinationals with the release of a methodology for taxation, especially for internet companies. The Central Board of Direct Taxes (CBDT) will have to finalise the rules for profit attribution. Combined with the Significant Economic Presence (SEP) amendment will create several changes for digital companies that operate in India. This will result in increase in taxes to be paid by digital companies across the world. The government has created an SEP framework whereby it can tax digital companies that are in India even without having a permanent establishment. This means a company can be taxed even if it does not have an office or employee based in India. However, these are in the proposal stage and will have to come into law in order to take effect. Sales that are generated domestically would now be chargeable for tax in India. A unified approach with increased tax certainty for administrators and taxpayers through a profit allocation mechanism that is three-tiered is being suggested for this.

    14 October 2019

  • Govt. allows IT dept and GSTN to share tax payer data

    The Income Tax Department of India has received approval from the government to share its tax payer data with the GSTN (Goods and Services Tax Network) in a bid to eliminate discrepancies in the information disclosed by business organisations. This will ensure additional scrutiny to businesses and make them share proper information with these organisations.

    If this move is implemented, direct and indirect tax authorities can easily cross check and verify the data shared by businesses. This will help them identify tax evaders and eliminate discrepancies. A formal system is expected to be implemented to facilitate data sharing between these authorities.

    If there are any mismatches in the information shared by businesses, these authorities can scrutinize their information and prevent tax evasion. This is considered to be a significant move that comes as a part of the government’s anti-evasion measures following the incorporation of the Goods and Services Tax.

    3 May 2019

  • Investors and directors in unlisted companies barred from filing ITR Sahaj and Sugam

    Directors as well as investors in unlisted companies have been barred from filing Income Tax Return (ITR) form Sahaj (ITR-1) and Sugam (ITR-4) by the Income Tax Department. This move has been taken to curb shell companies and control the spreading of black money. In the newly notified ITR forms for Assessment Year 2019-20 by the IT Department, the directors in both listed and unlisted companies will have to file their income tax returns in ITR-2 where they have to specify details such as name of the company, Directors Identification Number (DIN), equity holding, Permanent Account Number (PAN), etc. In a similar manner, even the investors in unlisted equity shares are required to provide details of such unlisted shares such as acquisition cost, date of purchase or sale, sale consideration at any time during the past year. Now, while Sahaj can only be filed by the resident individuals who have a total income of up to Rs.50 lakh from salaries, one house, other income sources, and agricultural income of up to Rs.5,000; Sugam can be filed by individuals, HUFs, and companies who have a total income of up to Rs.50 lakh under the presumptive income scheme from profession and business on condition that the assessee is not a director or an investor in an unlisted company.

    10 April 2019

  • New ITR forms for FY 2018-19 notified by CBDT

    Income tax return (ITR) forms for the last fiscal year 2018-19 has been notified by the Central Board of Direct Taxes (CBDT). The new forms include sections for more information about the tax payers. The new details that are required to be filled in the updated ITR forms include days or years of residency, unlisted shares holdings, and citing of PAN of the tenant in case of TDS filing. The new ITR-1 which is to be filed by resident individuals having total income of up to Rs.50 lakh from salary, a house property, and other sources like interest income, etc. have the option of Standard Deduction. A taxpayer can claim a maximum of Rs.40, 000 for FY 2018 -19 while filing his/her ITR. Moreover, individuals who have a house need to specify whether it is self-occupied, let-out or deemed to let-out. While previously taxpayers were only required to provide the income from other sources now they also have to give details of their income from other sources for the year. In ITR-2, individuals and HUFs who don't have income from profits and gains of business/profession need to provide details of their residency status along with specifying the number of days/years they were in India during the past year. Furthermore, individuals who are holding shares of an unlisted company are required to specify the company name, PAN, number of shares they hold/acquire, number of shares sold, etc. in the form.

    9 April 2019

  • Project Insight initiated by IT Department – new tax measures and GST structure come into effect

    The tax measures that were introduced in the interim Budget come into effect from April 1, 2019. These include tax rebates for income of up to Rs.5 lakh per year, capital gains for a second house as well as interest income, changes in notional rent, a higher standard deduction, etc. The real estate sector had a new GST structure imposed which would also come into effect from April 1, 2019. Project Insight has also been given the green light by the Income Tax Department who gave taxmen access to this tax tracker based on big data. Costing Rs.1000 crore to build, this tracker will help taxmen identify discrepancies between spending and income tax declarations by tracking activities of taxpayers on social networking sites.

    2 April 2019

  • Tax department to monitor social networking sites to track black money

    Project Insight, a Rs.1000-crore big data analytics project, will be used by the Income Tax Department to monitor social networking sites to identify people who may be evading taxes or manipulating tax figures to lessen their tax liabilities. This new project was launched on April 1, 2019. It works by tracking social media activities such as photographs and videos which gives a picture of a person’s expenditure patterns. If the declared income does not match the lifestyle that’s shown on social media, the IT officials will take note and follow up with appropriate action. Tax officials were given access to the software on March 15, 2019. A master file with key information about both corporates and individuals can be prepared with the help of Project Insight. New tax filers can also be monitored through this. The aim of the project is to encourage people to file their returns and pay taxes on time. With the integrated information management system and machine learning, the collection of documents and webpages will support the IT department to drastically cut down tax evasions in the country as it would also scrutinise tax returns based on specific criteria.

    2 April 2019

  • IT Department of India Offered Relief to 120 Startups From Angel Tax Net

    As per the announcement made by the Income Tax (IT) Department of India, 120 startups in India have been exempted from the tax levied on funds received from angel investors. The IT department recently intimated the startups regarding this new development under a scheme that was introduced in February 2019. The move was made to alleviate the tax problems faced by the new-age firms in the country, which were wrongly caught in an anti-evasion provision of the Income Tax Act, 1961.

    The intimation from the Central Board of Direct Taxes (CBDT) regarding the angel tax exemption for startups can prove to be helpful for companies which have already received tax notices for share premiums higher than their fair value. The startups will be able to submit the exemption certificates from the tax department at the stage of appeals to a higher authority within the tax department after all the assessments are done and the final tax demands have been issued. Approximately 150 companies applied for the tax benefits available for startups in the month of March 2019. However, only 120 firms have been considered eligible for this tax relief till now. According to the statements of an official, the rest of the applicant firms are expected to get the tag of a ‘startup’ once the errors in their applications are rectified.

    25 March 2019

  • What to do if you have received income tax scrutiny notice

    A scrutiny notice is sent to taxpayers by the Income Tax Department for verification of the income tax returns filed every year. This is sent with the aim of ensuring that the income is not understated nor has any excessive losses been computed or underpaid taxes. Scrutiny notices can be complete scrutiny or limited scrutiny. For complete scrutiny, the taxpayer can be asked to furnish a comprehensive list of documents which are required for a detailed audit of tax returns. For limited scrutiny notices, only details that are relevant to the query or transaction have to be submitted by the taxpayer. Cases for scrutiny are selected following a set of predetermined criteria. They are also selected using Computer Aided Scrutiny Selection (CASS). Income tax returns are selected for scrutiny within 6 months of the end of the financial year of the returns being filed. The notice has to be reviewed to ensure that it is within the prescribed timeframe and if not, the income tax office has to be informed. Details have to be verified as well such as the Permanent Account Number (PAN), name, financial year, the tax officer’s jurisdiction details. Documents have to be reviewed before being submitted. These should be submitted to the tax officer or uploaded online by the date assigned. If a personal appearance is requested, it has to be done by the taxpayer or an authorised representative failing which a penalty will be incurred.

    13 March 2019

  • Income Tax Department looking to vacate stay orders by tribunals

    The Income Tax Department (ITD) is stepping in in order to lift some of the stay orders that were obtained by some taxpayers from the appellate tribunals. A recent ruling of the Supreme Court has led the ITD to take this decision. In this ruling, the Supreme Court has ruled out that stay orders will not be extended for a period of more than 6 months whether it is a criminal case or a civil case. However, there will be certain exceptions.

    This has led the ITD to focus on the cases where the I-T Appellate Tribunal (ITAT) has extended the stay orders for more than 6 months. The decision is mainly aimed for shoring up the revenue before 31 March. If the stay is vacated within the next few weeks, the taxpayers will be coming under compulsion to pay up before the closing of the fiscal year.

    11 March 2019

  • Government willing to articulate tax rules to tax the MNCs

    The Indian government is planning to articulate rules to tax the multinational companies in India based on their volume of transactions and the number of customers that they have in India. However, the point of confusion in this matter was whether a company which is headquartered in India but collects a commission on a global deal should be domestically taxed with the commission amount or the value of the total deal. According to a ruling from a tax tribunal in the case of Fox International, which is a part of Star TV, multinational companies having a significant economic presence in India can be domestically taxed only the “attributable profits” of a multinational. The tax tribunal also stated that only the company's commissions will be taxed domestically and not their entire income. The focus of the ruling was on territorial interconnection for profit attribution and their taxation to Indian international companies with Indian business connection.

    4 March 2019

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