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ITR Filing

A Complete Comprehension of Income Tax Basics

Updated on: 11 Jan, 2024 05:19 PM

Don’t you think that most guides and articles on income tax have embedded tax terminologies that are too difficult to comprehend? Well, today we bring to you its solution. Here is a complete guide to equip you with the basic tax-related terms. So, the next time you surf, tax terms will not work as a road-stopper in your way!!


What is Income as per Income Tax Act?

The word Income has a very broad and inclusive meaning which is defined under section 2(24) of the income tax act; without getting too in-depth, we will understand it broadly.

  • In the case of a salaried person, whatever amount received from an employer, either in cash or kind or as a facility, is considered as income.
  • For a businessman, his profits and gains will constitute income
  • For professionals, freelancers, etc., their earnings from various sources like professional fees, other incomes, etc., are considered as Income.
  • You might receive Rental income from a house owned.
  • Or capital gains from the sale of shares, buying or selling of property, etc.
  • Income may also flow from investments in the form of Interest, Dividends, Commission, etc.
  • The Income Tax Department has classified income into 5 broad categories. Those are;
    1. Income from Salary : The amount you receive from your employer every month comes under the head Income from salary. This applies only if there is an employer-employee relationship. Otherwise, the amount will be considered under a different head, and you will not get the exemptions and allowances available to salaried individuals. Your salary includes:
      • Basic pay
      • Dearness allowance
      • Medical allowance
      • Transport allowance
      • Annuity
      • Gratuity
      • Advance of salary
      • Other allowances and commissions
      • Perquisites in lieu of salary
      • Retirement benefits
      The total of these incomes, after exemptions but before deductions, is called gross salary. This is the amount that is taxed under the head income from salary.
    2. Income from House property : Any Rental Income from residential or commercial property that you own will be taxed. If you have a home loan, then the interest part of it would also be considered as negative income from House property.
    3. Income from Business or Profession : Income earned through business or profession is taxable under the head's profits and gains of business or profession. The income on which tax is levied shall be net of expenses.
    4. Income from capital gains : Any profit or gain arising from the transfer of capital asset held as investments (such as house, Jewellery are chargeable to tax under the head capital gains). The gain can be on account of short-term and long-term gains. Our article Basics of Capital Gain talks about it in detail.
    5. Income from other sources : Any income that does not come under the above four heads of income is taxed under the head income from other sources. For example, savings bank interest, lottery you win, or Reality shows like “Kaun Banega Crorepati”, etc. All these Incomes are taxable, which means the person winning 1 Crore in the show will get the reward amount after tax deduction at source at the rate of 30%.

Refer to the table below to get an idea about the various classifications of income:

Classifications Income

Insert in the above table “Income from other sources”.

While your hard-earned income is generally taxable, there are certain categories of income that are exempted; these are called tax-free incomes and are provided in Section 10 of the Income Tax Act, 1961.

Tax Free Incomes – The Essential List Part-I

What are Exempt Incomes/Tax-Free Income and Taxable Incomes?

Exempt Incomes are not chargeable to tax as per the Income Tax act. I.e., they are not included in the total income for the purpose of tax calculation. For Example, Interest earned from PPF, etc. Whilst taxable Incomes are chargeable to tax. For example salary, house property, capital gains Income, etc.

What is PAN?

PAN stands for Permanent Account Number, it’s a ten-digit unique alphanumeric number issued by the Income Tax Department that acts as an identification for us. Whether we are Individual, HUF, Company, Firm, or any other assessee, the same can be known through our PAN. PAN is a prerequisite for filing ITR, also the tax department can trace all our communications, returns, refunds, and other activities relating to Income Tax through our PAN. It looks like as shown in the below image. Where the first Five digits will always be Alphabetic, the Next four digits - Numeric, and the Last digit - Alphabetic, the 4th letter is important as it denotes the type of assessee (Individual, Company, Firm Etc.)

Permanent Account Number

Given below is an illustrative PAN: AAAAA1234A

Does every person who has a PAN card need to file ITR?

Only those having taxable income or otherwise who come under the ambit of mandatory filing of Income Tax returns as per the Income Tax Act are required to file ITR.

What is TAN?

TAN refers to Tax Deduction Number which is a 10-digit alphanumeric number allotted to those who are liable to deduct TDS by the Income Tax Department.
TAN Format- JPRD00214F
First Four digit Alphabetic, then after Five digit Numeric and last digit is Alphabetic.

Who is an assessee?

As per Income Tax Act, an assessee means “a person by whom any tax or any other sum of money is payable under this Act”.
In layman’s term if you are liable to pay taxes, have any taxable income, or are otherwise required to file ITR, you are an assessee. The Income Tax Act, 1961 has classified Assessee in different categories, such as

Individual Piyush
Partnership Firm M/s ABC and Company
M/s ABC and associates
A Hindu Undivided Family Mr. A (HUF) or
Mr. B (HUF)
Company Winiin Taxscope Private Ltd.
Winiin Taxscope Ltd.
An AOP (Association Of Persons) or BOI (Body Of Individuals) ABC Sangh
A Local Authority Pune Municipal Corporation
PCMC Municipal Corporation
Artificial Juridical Persons Everyone not falling within any of the above categories.

What is the difference between Financial Year and Assessment Year?

Financial Year is the year in which you have earned income. On the other hand, Assessment Year is always the succeeding year in which you file your Previous Year's Income Tax Return and offer the particulars of your income earned during the Previous Year to be assessed by the Income Tax Department.

What is Income Tax?

An income tax is a tax imposed by the government on income earned by you. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

What is Corporate Tax?

When Companies pay taxes under the Income Tax Act, it is normally called Corporate tax.

Which body governs the filing of taxes in India?

The Central Board of Direct Taxes (CBDT) provides essential inputs for policy and planning of direct taxes in India and is also responsible for the administration of the direct tax laws through the Income Tax Department.

CPC Bengaluru or Income Tax Centralized Processing Centre undertakes the work of receiving and processing all income tax returns filed in India.

Do I have to file my Income Tax Return?

Whether you are required to file your income tax return or not depends upon a number of conditions. One such basic condition is, if your income exceeds Rs. 2,50,000 (For the financial year 2023-24, income up to Rs. 3,00,000 is exempt from tax as per Union Budget 2023 under the new tax regime) in a Financial Year you are required to file ITR. For more details, read our blog

What documents are required to be gathered to e-file your income tax returns in India?

Go through this list to see the documents you’ll need to file your taxes. You won’t need all the documents listed here as they vary on a case-to-case basis:-

**Mandatory PAN Card (Must have linked to Aadhar Card)
Bank Account Details

Form 16, 16A, 26AS
Pay slips
Rent receipt for HRA
Investment under section 80C, 80D, 80E, 80G

House Property
Address of property
Home loan interest certificate
Co-owner’s details including their PAN card details & share in capital

Capital Gains
ELSS, SIPs, debt funds, mutual fund statement, purchase and sale of equity funds.
If there is capital gains through selling shares then stock trading statement is needed
purchase price, selling price, capital gain details and details of registration, in case a house property is sold

Other Sources
Income received from post office account
Bank details required if Interest is received from savings account
Reporting of interest received from corporate bonds and tax saving bonds

What is Form-16?

Form 16 is issued to salaried individuals by their employers. This form prescribes details regarding

  • TDS deducted and
  • The Salary Amount Received
  • Allowances (like amount paid for HRA, medical reimbursements, etc)
  • Other Income if detail is provided to the Employer.
  • Deductions etc

Form is given at the end of the year and helps you file your income tax return as a breeze.
It is to be noted that deduction of TDS does not free you from the mandate of Filing of Income tax return.

Form 16 might differ in format depending upon employer to employer but a standard form 16 looks like this:-

  • Part A of FORM 16 contains details of taxes that have already been paid by you or deducted from your income
  • Part B gives a detailed breakup/composition of your income
Form 16 part A
form 16 part B

What is TDS?

As per Income Tax Act, there are certain payments including salary, interest etc. in which the one who makes such payment is liable to deduct tax known as Tax Deducted at Source. At the time of making the final computation of income, TDS is adjusted with taxes payable. Any excess tax deducted at source is credited back to the taxpayer’s bank account by the Income Tax Department.

What is Form 26AS?

Form 26AS is a statement maintained and generated by the Income Tax Department for each individual assessee. Form 26AS is also known as an annual statement which contains all tax related information of a taxpayer. The details give a clearer picture of the tax commitments of a taxpayer. It is associated with PAN. Form 26AS contains:

  • Details of tax deducted on your income by deductors
  • Details of tax collected by collectors
  • Advance tax paid by the taxpayer
  • Self-assessment tax payments
  • Regular assessment tax deposited by the taxpayers (PAN holders)
  • Refund received during the financial year
  • High value Transactions in respect of shares, mutual fund etc. performed during the year


Specimen of form 26 AS:

Form 26 AS

What are Income Tax Forms?

These are prescribed forms through which a person can furnish the details of his /her income earned and taxes paid for the relevant financial year to the Income Tax Department. The ITR forms on successful submission to the tax department becomes Income Tax Return.

Can I file my return even if I don’t have my Form-16?

Filing your ITR without Form-16 is possible but may require some extra effort and diligence on your part. You should always obtain your Form-16 from your employer as it simplifies the process and reduces the chances of errors or mismatches in your tax records. However, if you do not have your Form-16, you can still file your ITR using other documents and sources of information. Here are the steps to follow:

  • Collect your payslips and bank statements for the financial year. These will help you calculate your gross income, deductions, exemptions, and TDS.
  • Download your Form-26AS from the income tax e-filing portal. This is a consolidated statement of all the taxes deducted from your income by various sources, such as your employer, bank, etc. You can use this to verify the TDS amount and claim credit for it in your ITR.
  • Compute your taxable income by adding all your income sources, such as salary, interest, capital gains, etc., and subtracting the deductions and exemptions available to you under various sections of the Income Tax Act, such as 80C, 80D, etc.

What is ITR Form? How is ITR submitted to Department?

ITR forms as already discussed are the prescribed forms in which information is needed to be furnished to the income tax department. There are different ITR forms for different categories of the assessee and the same have been explained below:-

Form and their Description

ITR- 1(SAHAJ) Resident Individuals having income from
  • Salary or pension
  • Own one house property whether self occupied or let out
  • Income from other sources except Race horses and lottery etc
  • Having total income upto Rs 50 lakhs
ITR-2 Individuals and HUFs not having income from Profits and Gains of Business or Profession
ITR- 3 Individuals and HUFs earning income from Business or Profession, including partnership firms
ITR-4 (SUGAM) Anyone offering income for presumptive taxation
ITR-5 Every person other than
  • Individuals
  • HUFs
  • Company
  • Those filing ITR 7
ITR-6 For companies other than companies claiming exemption u/s 11
ITR-7 For persons including companies required to furnish return u/s 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F).

What is the due date for filing ITR?

Due date for filing ITR is as follows:

  • For individuals - 31st July every assessment year [Non-Audit Case]
  • For Others - 30th September every assessment year [Audit Case]

But here you can take a glimpse of all other important dates as well:-

Due Date Chart

How can ITR be filed?

An assesse filing a belated or a revised return- 31st dec of the relevant A.Y.(this should be edited in the image).

e filling process

What is the process of e-filing ?


Income Tax Slab Rates for F.Y. 2023-24 (Old Tax Regime)

There are various Income tax Slabs determined by the government depending upon the age of an individual. They are as under:

Income tax slab for Individual taxpayers & HUF (less than 60 years old)

INCOME(Rs.) F.Y. 2023-24 Individual taxpayers
Up to Rs 2,50,000 No Tax
Rs. 2,50,001 to 5,00,000 5%
Rs.5,00,001 to 10,00,000 20%
Above Rs. 10,00,000 30%

Income tax slab for senior citizens (60 years old or more but less than 80 years old)

INCOME(Rs.) F.Y. 2023-24 Senior Citizens
Up to Rs 3,00,000 No Tax
Rs. 3,00,001 to 5,00,000 5%
Rs.5,00,001 to 10,00,000 5% of the income exceeding INR 300,000 + 20% of the income exceeding INR 500,000
Above Rs. 10,00,000 5% of the income exceeding INR 300,000 + 20% of the income exceeding INR 500,000 + 30% of the income exceeding INR 10,00,000

Income tax slab for super senior citizens (80 years old or more)

INCOME(Rs.) F.Y. 2023-24 Income tax slab for super senior citizens
up-to 5,00,000 Nil
Rs.5,00,001 to 10,00,000 20%
Above Rs. 10,00,000 20% of the income exceeding INR 500,000 + 30% of the income exceeding INR 10,00,000

Income Tax Slab Rates for F.Y. 2023-24 (New Tax Regime)

Income tax slab for Individual taxpayers & HUF (less than 60 years old)

INCOME(Rs.) F.Y. 2023-24 Individual taxpayers
Up to Rs 2,50,000 No Tax
Rs. 2,50,001 to 3,00,000 5%
Rs.3,00,001 to 5,00,000 5%
5,00,001 to 6,00,000 10%
6,00,001 to 7,50,000 10%
7,50,001 to 9,00,000 15%
9,00,001 to 10,00,000 15%
10,00,001 to 12,00,000 15%
12,00,001 to 12,50,000 20%
12,50,001 to 15,00,000 25%
Above 15,00,000 30%

Income tax slab for senior and super senior citizens (New Tax Regime)

INCOME(Rs.) F.Y. 2023-24
Up to Rs 2,50,000 No Tax
Rs. 2,50,001 to 5,00,000 5%
Rs.5,00,001 to 7,50,000 10%
7,50,001 to 10,00,000 15%
10,00,001 to 12,50,000 20%
12,50,001 to 15,00,000 25%
Above 15,00,000 30%

A- 15% of income tax, where total income exceeds Rs.1 crore.
B- 10% of income tax, where total income exceeds Rs.50 lakhs but up to Rs. 1 crore.

2% on Education Cess and 1% on 3% on income tax

Rebate under Section 87A: The rebate is available to a resident individual if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income tax or Rs. 12,500, whichever is less.

How to calculate income tax from income tax slabs?

This example explains how to apply tax slabs to calculate income tax for FY 2023-24 (AY 2024-25).

Rohit has a total taxable income of Rs 8,00,000 i.e. and not claiming any deduction deductions under chapter VI A. Rohit wants to know his tax dues for FY 2023-24.

Income Slab Tax Rate Tax Calculation
Up to Rs 3,00,000 No tax -
Rs 3,00,001 – Rs 6,00,000 5% 5% of (Rs 6,00,000 - Rs 3,00,000) = Rs 15,000
Rs 6,00,001 – Rs 8,00,000 10% 10% of (Rs 8,00,000 - Rs 6,00,000) = Rs 20,000
Rs 8,00,001 – Rs 9,00,000 15% Nil (since income falls between Rs 9,00,000 – Rs 12,00,000)
Rs 9,00,001 – Rs 12,00,000 15% Nil (tax on this slab is 15%, but the income is not in this range)
Rs 12,00,001 – Rs 15,00,000 20% Nil (since income falls between Rs 12,00,000 – Rs 15,00,000)
Above Rs 15,00,000 30% Nil (tax on this slab is 30%, but the income is below this range)

Tax = Rs 15,000 (from the first slab) + Rs 20,000 (from the second slab)
= Rs 35,000

Cess (at 3% on the total tax) = 3% of Rs 35,000
= Rs 1,050

Total tax in FY 2023-24 (AY 2024-25) = Rs 35,000 + Rs 1,050
= Rs 36,050 (rounded off)

Thus, Rohit's total tax dues for FY 2023-24 (AY 2024-25) amount to Rs 36,050.

What is Deduction under section 80C?

In simple terms, you can reduce up to Rs 1,50,000 from your total taxable income through section 80C, by making investment in prescribed routes like PPF, LIC etc. This deduction is allowed to an Individual or a HUF.


Income 500000
less- Deduction u/s 80C 150000
Taxable income 350000

After providing deduction u/s 80C Taxable income will only be Rs 3.5 lakhs and not 5 lakhs.

What is Rebate u/s 87A?

Rebate under section 87A is accessible to resident individuals with a taxable income that falls below a specified threshold. This provision decreases the individual's payable income tax. The rebate's value and threshold under section 87A vary based on the chosen tax regime and the financial year selected by the individual.

For FY 2023-24 (AY 2024-25), the rebate u/s 87A is as follows:

  • Under the new tax regime, the rebate is Rs 25,000 if the taxable income is up to Rs 7,00,000.
  • Under the old tax regime, the rebate is Rs 12,500 if the taxable income is up to Rs 5,00,000.

For more details and calculations read our blog on Income Tax Rebate Under Section 87A

What is Advance Tax?

Advance tax means income tax paid in advance instead of a lump sum payment at the time of filing the ITR. It is also known as the “Pay As You Earn” tax. These payments have to be made in installments as per the due dates provided by the Income Tax Department.

Advance Tax Due Dates For FY 2023-24:

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

Who should pay Advance Tax?

Advance tax is to be paid by an individual if his total tax liability is Rs 10,000 or more in a Financial Year. The provision of Advance tax applies to all taxpayers. Whereas, Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax.

What is Self-assessment Tax?

Your income tax return cannot be submitted to the tax department unless you have paid tax dues in full. Sometimes, you may see tax payable at the time of filing your return. This income tax must be paid online so that the return is successfully e-filed afterward.

Procedure for payment of taxes?

Taxes can be paid online by making an e-payment, or alternatively, the hard copy of the challan can be deposited in any nearest branch of a bank. For more details, please read click here.

What is interest under section 234A, 234B, and 234C?

You can attract the interests u/s 234A, B, C in the following circumstances

234A Delay in filing the return of income
234B Non-payment or short payment of advance tax; and
234C Non or short payment of one or more than one instalments of advance tax

What is the computation of income?

A systematic presentation of inputs entered by an assessee, together with the calculation of taxes is known as computation of total income. There is no fixed format for the same. Generally, following elements are considered while making Computation Of Total Income

  • Personal details of assessee
    - Name
    - Father's name
    - Address
    - Contact details etc
  • Bank account details
  • Income details and
  • Calculation of taxes
  • Taxes paid details

A specimen of the computation has been given here under for your reference;

basic deatil
Computation of income

What is ITR–V?

After filing your income tax return, the department wants to ensure via physical or electronic verification that it’s you only, who has filed the ITR and no one else has misused the account. For this one-pager acknowledgement/receipt is generated which is commonly termed as ITR-V. You are required to verify the same by either signing it manually and sending to CPC Bengaluru or through e verification.

A specimen of Acknowledge generated after successful filing of Income tax return has been attached herewith for your reference.


Why correct calculation of your income is important?

The tax which will be paid by you to the Income Tax Department, is calculated on the basis of your total income. Wrong computation of income may lead you in a situation of

  • Paying Taxes
  • Wrong selection of ITR form
  • Penalty for not paying advance tax (if applicable)
  • Undue cash crunch etc

Hence correct calculation of income becomes very crucial.

For example, In case of incomes earned between 1st April 2023 to 31st March 2024

The Financial Year (FY) shall be 2023-24
And the Assessment Year (AY) will be 2024-25

What if I don’t file my return?

In case you don’t file your return, following repercussions may follow:-

  • A notice can be issued by the Income Tax Department.
  • Any business losses during the year will not be allowed to carry forward to the next years.
  • Penalty shall be imposed u/s 270A, and interest may be payable as per the section 234A,B,C
  • Other consequences may also be there as per Income Tax act, 1961.

So, in case you have furnished incorrect information in your income tax return, you can submit a revised return before the end of the relevant assessment year in which the original income tax return was filed. I.e. for Financial Year 2023-24; AY 2024-25, you can file a revised return till 31st December 2024.

Your return can now be revised irrespective of the fact it was filed till the due date or afterward. To summarize, a belated return can also be revised.

In case of any misreporting detected in the income tax return, the income tax officer can levy a penalty of 200% of the tax, which is sought to be avoided. In other cases of underreporting of income, the penalty shall be restricted to 50% u/s 270A of the Income Tax Act 1961. Hence be very vigilant while disclosing your income and filing taxes.

What is an Income tax refund and How you can claim it?

An Income tax refund is the excess tax paid by you which is refunded back by the Income Tax Department. For eg : tax you need to pay was Rs. 10,000 but you paid 15,000, then after filing your income tax return which would be showing tax refund of Rs. 5,000 the amount will be given back to you by the Income Tax Department.
You can now track the status of your Income tax refund with our free Refund Status

Can a return be filed after the due date? Fee u/s 234F!!

Yes, if you fail to file the return of income on or before the prescribed due date, then you can file a belated return. A belated return can be filed till the end of the relevant assessment year.The timeline to file a belated return is on or before 31 December of the relevant A.Y.
Example :-
Return for F.Y 2023-24 was say required to be filed latest till 31st July 2024. But Mr. Chopra fails to do so. Now, he can furnish a belated return of income till 31st December 2024.

Penalty for Late Filing under section 234F:

The Income Tax Act has changed the rules for late filing of ITR under section 234F. If you miss the deadline, you may have to pay a penalty of up to Rs.5,000.

The penalty amount has been reduced from Rs.10,000 to Rs.5,000 for the financial year 2021 onwards. This means that for FY 2023-24, you can avoid the penalty if you file your ITR by 31st July 2024 (30th September 2024 for audit and 31st October 2024 for transfer pricing cases). If you file your ITR after 31st July 2024, the penalty limit will be Rs.5,000. But if your total income is not more than Rs 5 lakh, you will only have to pay Rs.1,000 as the maximum penalty for late filing.

Fee Details of late filing:

e-Filing Date Total Income less than 5 Lakh Total Income more than 5 Lakh
31st July 2024 Nil Nil
1st August 2024 to 31st December 2024 ₹ 1,000 ₹ 5,000

Finally, my income tax return has been filed, am I free now?

Yes, you are free now until you haven’t made any mistake while filing. A mistake can lead you to revise your return u/s 139 (5) or rectify u/s 154. You have reached the end of our tax guide and learned a lot about the complex topics. Congratulations, you are no longer a tax novice but a tax-savvy! Well done!!

We recommend you consult an expert before filing your income tax return to avoid mistakes. If you have not filed your return yet, don’t delay any further. File it now!

Book eCA now!

Income Tax Basics - Commonly used Abbreviations and their Full Forms

Abbreviation Full Form
AC Assistant Commissioner
AG Audit and General
AO Assessing Officer
AY Assessment Year
AS Accounting Standards
CA Current Asset
CG Capital Gain
CL Current Liability
Cr. Credit
CP Commercial Paper
DD Demand Draft
Dr. Debit
Dy. Deputy
e- Electronic
EC Education Cess
FD Fixed Deposit
FY Financial Year
FS Financial Statements
HC High Court
HP House Property
IB Intelligence Bureau
IT Income Tax
JC Joint Commissioner
NI Net Income
OD Over Draft
O/S Outstanding
PF Provident Fund
P&L Profit and Loss 
PY Previous Year
RD Recurring Deposit
SC Surcharge
u/s Under section
WT Wealth-tax
AAR Authority of Advance Ruling
ADR American Depository Receipt
AGI Adjusted Gross Income
AIF Alternative Investment Fund
AMC Asset Management Company
AMT Alternative Minimum Tax
AOPs Association of Persons
AJP Artificial Judicial Person
BOI Body of Individuals
BSE Bombay Stock Exchange
C&AG Comptroller and Auditor General of India
CFS Consolidated Financial Statements
CFS Cash Flow Statement
CII Cost Inflation Index
CIT Commissioner of Income Tax
CIT (A) Commissioner of Income Tax (Appeal)
CIN Corporate Identity Number
CIN Challan Identification Number
COA Cost of Acquisition
COI Cost of Improvement
CPI Consumer Price Index
CSR Corporate Social Responsibility
CRR Cash Reserve Ratio
CST Central Sales Tax
DOB Date of Birth
DTA Deferred Tax Asset
DIN Document Identification Number
DTL Deferred Tax Liability
ECS Electronic Credit System
EFT Electronic Funds Transfer
ERI e-Return Intermediary
EIN Employer Identification Number
ESI Employees' State Insurance
EVC Electronic Verification Code
FBT Fringe Benefit Tax
FII Foreign Institutional Investor
FMV Fair Market Value
GDP Gross Domestic Product
GDR Global Depository Receipt
Gov Government
GST Goods and Service Tax
GTI Gross Total Income
HEC Health and Educational Cess
HRA House Rent Allowance
HUF Hindu Undivided Family
Ind AS Indian Accounting Standard
INR Indian Rupee
IRR Internal Rate of Return
ITA Income Tax and Accounting
ITD Income Tax Department
ITO Income Tax Officer
ITR Income Tax Return
KVP Kisan Vikas Patra
LLC Limited Liability Company
LLP Limited Liability Partnership
LTC Leave Travel Concession
LTU Large Taxpayer Unit
LUT Letter of Undertaking
Ltd Limited
MAT Minimum Alternate Tax
MIS Management Information System
NAV Net Asset Value
NOL Net Operating Loss
NPS National Pension System
NRE (Non-Resident External) Account
NRI Non-Resident Indian
NRO Non-Resident Ordinary
NSC National Saving Certificates
NSE National Stock Exchange
OTP One Time Password
PAN Permanent Account Number
PIN Personal Identification Number
Pvt Private
PPF Public Provident Fund
QIB Qualified Institutional Buyer
RBI Reserve Bank of India
RSE Recognised Stock Exchange
SAT Self Assessment Tax
SEZ Special Economic Zone
STT Security Transaction Tax
SIP Systematic Investment Plan
SCN Show Cause Notice
Sec Section
SLR Statutory liquidity ratio
TRP Tax Return Preparer
TAN Tax Deduction / collection account number
TCS Tax Collected at Source
TDS Tax Deduction at Source
TIN Tax Payer’s Identification Number
TPO Transfer Pricing Officer
VAT Value Added Tax
VCC Venture Capital Company
VCF Venture Capital Fund
VCU Venture Capital Undertaking
w.e.f With effect from
ACES Automation of Central Excise and Service Tax
ACIT Assistant Commissioner of Income Tax 
Asst. Assistant
ASTO Assistant Sales Tax Officer
CBDT Central Board of Direct Tax
CBIC Central Board of Indirect Taxes and Customs
CCIT Chief Commissioner of Income Tax
CGST Central Goods and Services Tax
CIT (A) Commissioner of Income Tax (Appeal)
COGS Cost of Goods Sold
CWIP Capital Work-in-Progress
DCIT Deputy Commissioner of Income Tax
DGIT Director General of Income Tax
DGIT (E) Director General of Income Tax (Exemption) DSIR
DTAA Double Taxation of Avoidance Agreement
e- SMS electronic Short Message Service
EFIN Electronic Filing Identification Number
ELSS Equity Linked Savings Scheme
ESOP Employees Stock Option Plan
FIFO First In First Out
GAAR General Anti- Avoidance Rules
GAAP Generally Accepted Accounting Principles
ICDS Income Computation and Disclosure Standards notified by the Central Government under section 145(2)
IFRS International Financial Reporting Standards
IFSC Indian Financial System Code
IGST Integrated Goods and Service Tax
IMPS Immediate Payment Service
IRDA Insurance Regulatory and Development Authority of India
ITAT Income Tax Appellate Tribunal
ITIN Individual Taxpayer Identification Number
JCIT Joint Commissioner of Income Tax
LIFO Last In First Out
LTCG Long Term Capital Gains
MAGI Modified Adjusted Gross Income
MCLR Marginal Cost of funds based Lending Rate
MICR Magnetic Ink Character Recognition
NEFT National Electronic Funds Transfer
PATR Patronage Dividend
PCIT Principal Commissioner of Income Tax
RERA Real Estate (Regulation and Development) Act, 2016
REIT Real Estate Investment Trust
RTGS Real Time Gross Settlement
PGBP Profits and Gains of Business or Profession
SCSS Senior Citizens Saving Scheme, 2004
SEBI Security and Exchange Board of India
SGST State Goods and Services Tax
SHEC Secondary and higher educational cess
STAT Sales Tax Appellate Tribunal
STCG Short Term Capital Gains
ULIP Unit Linked Insurance Plan
UTGST Union Territory Goods and Service Tax
CC-ITA Chief Council - Income Tax and Accounting
CENVAT Central Value Added Tax
e- SMS electronic Short Message Service
EFTPS Electronic Federal Tax Payment System
FATCA Foreign Account Tax Compliance Act
IT RATE Income-tax rate
IT+HEC Income Tax plus Health and Educational Cess
IT+SC Income Tax plus surcharge on income –tax
IT+SC+EC Income Tax plus surcharge on income –tax plus education cess on income-tax and surcharge
IT+SC+EC+SHEC Income Tax plus surcharge on income –tax plus education cess plus secondary and higher education cess on income –tax and surcharge
IT+SC+HEC Income Tax plus surcharge on income –tax plus health and education cess on income-tax and surcharge
KVATIS Kerala Value Added Tax Information System
MACRS Modified Accelerated Cost Recovery System
TINXSYS Tax Information Exchange System

Frequently Asked Questions

Q- What is the administrative framework of Income-tax?

The Central board of direct taxes administers the direct tax law through the income tax department. Therefore the income tax department administers the income tax law under the supervision of CBDT.

Q- What is the period for which a person’s income is taken into account for the purpose of Income-tax?

income tax is charged on the annual income of assessee therefore period of 1st April to 31st March is taken as income period.

Q- In the Challan, there are terms like Income-tax on companies & Income-tax other than companies. What do they mean?

These terms are in reference of tax applicability. taxes paid by companies are corporate tax and for that challan contains the details of income tax on companies and for the others income tax other than companies.

Q- How is advance tax calculated and paid?

Advance tax is paid by the assessee having tax liability in excess of rupees 10000. it is calculated on the current income and paid in 4 installments.

Q- What is a tax on regular assessment and how is it paid?

Tax on regular assessment is the tax paid by the taxpayer on notice of demand. notice of demand means an additional tax is paid by assessee.

Q- What are the precautions that I should take while filling-up the tax payment challan?

PAN and correct name and address on challan is quote correctly and indicate FY and AY while filling the challan, separate challan shall be used for each payment and correct code is selected.

Q- How can I know that the Government has received the amount deposited by me as taxes in the bank?

Details of tax deposited by the assessee is shown in 26AS as self assessment tax. assessee can check this on 26 AS. NSDL also provides the service of challan status enquiry, assessee can take the information from NSDL website.

Q- What should I do if my tax payment particulars are not found against my name on the website?

There may be various possible reasons that amount is not shown in 26AS like PAN not correctley quoted, Incorrect PAN quoted etc. by rectifying the reasons details will be shown on website.

Q- Is my responsibility under the Income-tax Act over once taxes are paid?

No, you are now responsible for ensuring that taxes paid are shown in the tax credit statement. and if taxes are not credited in the statement possible rectification shall be made.

Q- Who is an Assessing Officer?

The assessing officer is an officer of the income tax department and AO is given jurisdiction over an area.

Q- Income-tax is levied on the income of every person. As per Income-tax Law, what constitutes income?

Income is defined under the 5 heads of income. that are salary, house property, business and profession, capital gains, and other sources. income constituted under these heads are covered under the income.

Q- What is exempt income and taxable income?

Incomes which are not chargeable to tax is exempt income and the income which are chargeable to tax are taxable income.

Q- What is revenue receipt and capital receipt?

Revenue receipts are in the nature of revenue like business income, salary income etc. and Capital receipts are those which are not in the nature of revenue like the sale of buildings, gold, etc.

Q- Are all receipts, i.e., capital and revenue receipts, charged to tax?

All the revenue receipts are taxable unless exemptions are provided in law, and capital receipts are exempt from taxes unless there is specific provisions for taxing them.

Q- Will it make any difference in Income tax if an assessee is a resident or non-resident?

Yes, it makes a big difference under Income tax provisions as there are different tax provisions for them. Hence, due care has to be taken in ascertaining your residential status so that you can correctly opt for eligibility to tax forms, rebates, etc.

Q- Do I need to attach any documents along with my Income Tax Return?

No, You don’t have to attach any document along with your income tax return. You are required to submit documents only when the Income Tax Department asks you to submit them.

Q- What is and How to E-verify Income Tax Return?

A signed hard copy of ITR V can be sent to CPC Bangalore or it can be e verified online.

Q- Is the Income Tax Act applicable only to residents?

No, Not only residents even the non-residents are covered under the scope of the Income Tax Act. In other words, it applies to all persons who earn income in India irrespective of their residential status.

Q- For whom is E-filing Mandatory?

All registered taxpayers who have taxable income must file their Income Tax Returns online. However, a taxpayer who has crossed the age of 80 years can file a paper return if he does not have income from regular business or profession.

Q- Can I claim a deduction for my personal and household expenditure in calculating my income or profit?

No, you cannot claim any of such deductions or expenditures.

Q- So far I have never paid any tax. If I file a return this year will the IT department ask me about my earlier years' income?

The IT department does not always asks for your earlier year returns, but the department may ask you to file a return of income for earlier years if it finds that you had taxable income in those years and you have not filed your income tax return despite being eligible for it.

Q- Am I required to keep proof of ITR filed? If yes, then for how long?

Yes. Since legal proceedings under the Income Tax Act can be initiated up to six years prior to the current financial year, you must maintain such documents at least for this period. Individuals who file their Income Tax Returns (ITR) should hold on to their previous ITR records and associated financial paperwork for a period of 10 years starting from the conclusion of the assessment year.

Q- What is the User ID to log in to Income Tax India efiling website?

The user ID is your PAN number.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.