Income Tax Knowledge Hub (India)

ITR Due Date Extension

The government, through CBDT, may extend ITR deadlines when taxpayers face genuine hardship — for example, widespread portal disruptions, natural calamities, or key policy transitions. Extensions are published via official circulars and press releases. Always verify dates on the e‑filing portal rather than relying on unverified social posts.

What is Income Tax?

Income tax is a direct tax on income earned during a Financial Year (FY). It funds public services like roads, healthcare, education and welfare. Your liability depends on total income, residential status, applicable slab rates and eligible deductions/exemptions.

Example: A salaried person with ₹9.8 lakh income opting for the old regime can use 80C, 80D, HRA, etc. to reduce taxable income; the same person under the new regime may pay lower rates but usually claims fewer deductions.

What is Income Tax Act?

The Income Tax Act, 1961 governs the levy, computation, assessment and recovery of income tax in India. It defines the scope of income, rates, deductions, exemptions, assessment procedures, penalties and appellate remedies. It is updated annually by the Finance Act (Union Budget) and complemented by Income‑tax Rules, CBDT circulars and notifications.

Income Tax Department

The Income Tax Department (ITD), under the Ministry of Finance, administers direct taxes: processing returns and refunds, conducting assessments, and enforcing compliance. The Central Board of Direct Taxes (CBDT) frames policy, issues instructions, and supervises ITD operations.

Who needs to Pay Income Tax?

• Individuals (residents and non‑residents) whose total income exceeds the basic exemption under the chosen regime.
• HUFs, Firms/LLPs, Companies — taxed on their profits as per applicable rates.
• Trusts, AOPs/BOIs — as per specific provisions.

Note: Certain incomes are taxable irrespective of residential status if they accrue, arise or are received in India.

Residential Status

Residential status determines if your global income is taxable or only Indian‑source income. Broad classes:

• Resident and Ordinarily Resident (ROR): Taxed on worldwide income.
• Resident but Not Ordinarily Resident (RNOR): Taxed on Indian income and certain foreign income linked to a business/profession controlled from India.
• Non‑Resident (NR): Taxed only on Indian‑source income.

Status depends on days of stay in India across the FY and preceding years, with special conditions for specific categories (e.g., Indian citizens/PIOs).

Types of Income — 5 Heads of Income

1) Income from Salary

Includes wages, allowances (HRA, DA, etc.), perquisites (company car, accommodation), bonus and pension. Standard deduction may apply. HRA exemption depends on rent, salary and city of residence.

2) Income from House Property

Taxed on annual value of property let out; self‑occupied property’s annual value is taken as nil (subject to rules). A standard deduction and interest on home loan (u/s 24(b)) may apply.

3) Profits and Gains of Business or Profession

Income from business/profession, freelancing and consultancy. Books of account, presumptive taxation options (44AD/44ADA), and depreciation rules are relevant here.

4) Capital Gains

Gains on transfer of capital assets like shares, mutual funds, property, and gold. Classified as STCG or LTCG based on holding period; indexation may apply to certain LTCG.

5) Income from Other Sources

Residual income such as interest, dividends, gifts (beyond thresholds), winnings, etc.

Deductions under the Income Tax Act

Deductions reduce taxable income. Under the old regime, common deductions include 80C (PF, PPF, ELSS, life insurance, tuition fees), 80D (medical insurance), 80TTA/80TTB (savings interest for non‑seniors/seniors). House property interest is addressed under 24(b). The new regime allows limited deductions (including standard deduction in specified years).

Popular Deductions (Quick List)

• Section 80C: Up to ₹1.5 lakh — PF/PPF/ELSS/life insurance/tuition fees.
• Section 80D: Health insurance premiums (higher limits for senior citizens).
• HRA Exemption: Based on rent, salary and city class; subject to conditions.
• Standard Deduction: Generally ₹50,000 for salaried/pensioners (regime‑specific).

Computation Of Income

1. Classify income correctly under each head.
2. Apply specific exemptions/allowances (e.g., HRA, LTA) where eligible.
3. Aggregate to form Gross Total Income (GTI).
4. Reduce Chapter VI‑A deductions to reach Total Income.
5. Apply set‑off/carry‑forward rules for losses, as permitted.

Calculation of Tax

Compute tax using the applicable slab rates (old/new), add surcharge if applicable, then apply 4% Health & Education Cess. Reduce eligible rebate u/s 87A. Deduct prepaid taxes (TDS/TCS/advance/self‑assessment). The result is tax payable or refund.

Tax Slabs

Old Income Tax Regime

Offers multiple deductions/exemptions (HRA, LTA, 80C/80D etc.). Favourable for taxpayers with higher eligible deductions. Requires more documentation and careful computation.

New Tax Regime

Offers lower slab rates and simplified computation with limited deductions (standard deduction in specified years). Suitable for those with fewer deductions or who prefer simplicity. A higher 87A rebate threshold may make income tax‑free for qualifying totals.

Special Tax Rates

• 111A (Equity STCG) — 15% where STT is paid.
• 112A (Equity LTCG) — 10% on gains over ₹1 lakh (without indexation) subject to conditions.
• 112 (Other LTCG) — Typically 20% with indexation for assets like property/gold.
• Casual incomes (lotteries/game shows) — 30% flat plus cess/surcharge.

Rebate u/s 87A and Cess

The 87A rebate reduces tax for small taxpayers up to notified thresholds (commonly up to ₹5 lakh under old and ₹7 lakh under new regime). Health & Education Cess at 4% applies on tax plus surcharge.

Income Tax Payment

Taxes are collected through TDS/TCS, advance tax and self‑assessment tax. Keep challan details and ensure your bank account is pre‑validated for refunds.

Tax Deducted at Source (TDS)

TDS is deducted on specified payments. Review Form 26AS and AIS/TIS to reconcile credits with Form 16/16A. Report correctly in ITR to avoid mismatch notices.

Advance Tax

Pay during the year if your estimated liability (post‑TDS) is ₹10,000 or more. Typical milestones: June 15% → Sept 45% → Dec 75% → March 100%.

Self‑Assessment Tax

Any balance tax is payable before filing the return. Enter challan details accurately in the ITR.

E‑Payment of Taxes

Use the authorised portal via net banking/debit cards or designated bank branches. Save the challan as proof.

Refund

When prepaid taxes exceed the final liability, the excess is refunded after processing. In many cases refunds appear within about a week, subject to verifications and bank validations.

Important Terms (FY/AY/PAN/TAN)

• FY: April–March year in which income is earned.
• AY: The following year when income is assessed.
• PAN: Permanent Account Number — unique taxpayer ID.
• TAN: Number for entities required to deduct/collect tax.

Filing Your ITR

Pick the correct ITR form (ITR‑1/2/3/4 depending on sources). Collect documents (Form 16/16A, AIS/26AS, capital gains statements), fill schedules, compute tax, pay any balance, and e‑file on the portal. E‑verify within time via Aadhaar OTP, bank, net‑banking or by sending ITR‑V.

Meaning of ITR

An Income Tax Return is the statutory declaration of income, deductions, taxes paid and net payable/refundable for the FY.

Documents Required for ITR Filing

• PAN, Aadhaar, and pre‑validated bank account details.
• Form 16/16A, salary slips, interest/dividend statements.
• Form 26AS/AIS/TIS for tax credits and reported transactions.
• Capital gains statements, rent receipts, home‑loan interest certificates.
• Investment/insurance proofs for deductions; donation receipts if any.

Persons Not Required to File ITR

Individuals below the basic exemption limit (as per chosen regime) or having only exempt income may not be required to file. However, filing remains beneficial for financial proofs and is mandatory in certain reporting situations.

Due Date for Filing ITR

• Non‑audit: 31 July of the AY (unless extended).
• Audit: 31 October.
• Transfer Pricing: 30 November.

Consequences of Not Filing ITR

• Late fee (u/s 234F) and interest (u/s 234A/B/C).
• Losses may not be carried forward.
• Higher chance of notices; penalties/prosecution in severe cases.

E‑Filing

File electronically on the official portal. Many fields are pre‑filled from AIS/26AS; verify carefully. E‑verify return to complete the process.

What is ITR–V?

ITR‑V is the acknowledgement generated after filing. If you have not e‑verified instantly, complete e‑verification later or mail the signed ITR‑V within the prescribed time.

Did You E‑file Your Tax Return For This Year?

Filing early minimises errors and speeds up refunds. If you missed the due date, check options for belated or updated returns as per law.

Frequently Asked Questions

How long does the TDS refund take? About a week after processing in simple cases, subject to verification.

Is Aadhaar–PAN linkage mandatory? Yes — it is required for filing and smooth processing.

Which ITR should I use? It depends on income sources — salary (ITR‑1 in simple cases), business/profession (ITR‑3/4), capital gains (ITR‑2) etc.

Old vs New regime? Compare both; old helps if you claim large deductions, new is simpler and may be lower if deductions are limited.