Latest Updates on Income Tax Return
Budget 2023 Updates
The new tax regime will be the default tax regime as per Budget 2023
The basic exemption limit has been raised to Rs 3 lakh from Rs 2.5 lakh to make the new tax regime more attractive. Also, the highest tax rate of 30% will be levied above Rs 15 lakh income.
In the budget 2023-24 announcement, the rebate under section 87A has been hiked to Rs 7 lakh from Rs 5 lakh under the new tax regime. The rebate benefit will be up to Rs 25000, provided income doesn't exceed the limit of 7 lakhs.
The proposal to introduce the standard deduction in the new tax regime has been shared. As per this salaried class and the pensioners will benefit from a standard deduction of Rs. 50,000/-
Also, the exemption of a family pension of Rs. 15,000 has been introduced under the new tax regime.
Reduction in the surcharge on annual income above 5 crores from 37% to 25% under the new regime. Currently, the highest tax rate is 42.74%, which would slash the maximum tax rate to 39% after this reduction.
The limit of Rs. 3 lakh for tax exemption on leave encashment on non-government salaried employees has been raised to Rs. 25 lakh.
Furthermore, the new tax regime has reduced the income tax slabs from 7 to 6. The revised tax structure as per the new tax regime is:-
Read more updates about Budget 2023 here.
You can calculate your estimated income tax after the amendments made in Union Budget 2023-24 here.
What is Income Tax Return (ITR)?
Income tax is a type of tax that is levied by governments on the income earned by individuals, corporations, and other entities. The tax is usually calculated as a percentage of the income earned, and the amount paid is used to fund various government programs and services.
eFiling of Income Tax returns refers to the electronic filing of tax returns through online platforms provided by tax authorities. It is an alternative to the traditional method of filing paper-based tax returns. This process is easy; quickly, in the comfort of your home or office, you can file an income tax return.
Individuals are required to pay income tax on their salary or wages, as well as on other forms of income such as interest, dividends, rental income, business profits, and capital gains. Corporations are also required to pay income tax on their profits.
ITR contains all the details of incomes and tax-saving investments an individual does in a particular financial year. The tax department has notified 7 types of ITR forms i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, ITR 7 for filing Income Tax returns (Forms are relevant for individuals, companies, firms, etc.).
What are the Benefits of Filing an Income Tax Return?
In India, there is a general practice that if you are a citizen with a gross income that exceeds the basic tax exemption limit, i.e., 2,50,000, subject to certain conditions, you must file an Income Tax Return (ITR). If your income doesn’t exceed Rs 2,50,000 during the year, you’re not legally bound to file your return. But it’s still recommended that you file your return because of the benefits that come with filing an income tax return:
Accidental Claims Income tax returns can be used as evidence to help determine the income of an accident victim when calculating accident claim amounts. However, the specific formula used and other factors such as the severity of the injury, medical expenses, and loss of earning capacity will also be considered.
Proof of Income/Proof of Net worthITR serves as a comprehensive record of an individual's income, deductions, and tax liabilities, making it a reliable proof of income.
Refund You can claim a refund of the amount you have paid in excess or deducted excessively in the form of TDS. There is no bigger joy than getting back your money from the Income Tax Department.
Eligibility in Loan Application Income Tax Returns for the last three years are one of the basic documents required for loans. This helps banks in judging your payback capacity.
Carry forward capital losses If, in a financial year, you have incurred capital losses, then you can carry forward them and settle them in the future.
Obtaining Visa For traveling abroad, foreign consulates of many countries ask you to furnish the last 3 years’ income tax returns or the current year’s income tax return. The absence of any return can reduce your chances of getting a visa, especially under the visitor, investor, and work permit categories.
Carry forward of losses Want to claim last year’s business loss? File your income tax return, and you’re all set for it.
For Startup Funding Looking to raise funds from VCs or angel investors? Ensure your income tax returns are up to date. Many investors assess your business's scalability, profitability, and other financial metrics through your tax returns.
Protection against Black Money If you diligently file your income tax return every year, then your savings will never be at risk of being termed as black money by the Income Tax officials, as any income not reported to the Income Tax Department comes under the radar of black money.
Buying an insurance Policy with high life cover Some insurance companies are adamant about income tax returns while providing high life cover to verify your annual income.
Obtaining Government Tender Sometimes, furnishing your income tax return is a must when applying for government tenders especially when tenders of high value are being awarded.
Avoid penalty Non-filing of income tax returns can land you in trouble with the Income Tax Department. You carry the risk of not only paying a penalty but interest on it as well.
Credit Card Application Want to flaunt a high limited Credit Card? Income Tax Returns help you get high credit limits on credit cards.
Growth of the nation Be a part of the nation-building process by filing an income tax return.
Read More
here.
What is the Due Date to File an Income Tax Return?
The ITR filing due date for FY 2024-25 (AY 2025-26) is 31st July 2025. ITR filing on the due date is essential to comply with tax laws, avoid penalties, claim timely refunds, maintain accurate financial records, and facilitate financial transactions. It is advisable to prioritize timely filing to stay in line with regulatory requirements and avoid unnecessary complications.
However, for the people who fall within the limits of a tax audit, the due date is 31st October, and in the case where transfer pricing is applicable, the due date is 30th November after the end of the financial year.
Note: Persons who fall within the limits of Tax Audit are:
- Persons carrying on business and sales/turnover exceeding Rs.1 Cr.
- A person carrying on professional and Gross Receipts exceeding Rs 50 Lakhs.
- A person carrying on business or profession under the provisions of section 44AD and sales/turnover exceeds Rs 2 Cr. or declaring income lower than the deemed income under the applicable section.
As per the Finance Act 2020: The threshold limit of Rs 1 crore for a tax audit is proposed to be increased to Rs 5 crore with effect from FY 2023-24 (AY 2024-25) if the taxpayer’s cash receipts and cash payments are limited to 5% of the gross receipts or gross payments. The same limit has been increased from Rs. 5 crores to Rs. 10 crores from AY 2022-23 (FY 2021-22)
With effect from 1st April 2021, the threshold limit of Rs 5 crores is increased to Rs 10 crores in case cash transactions do not exceed 5% of the total transactions. Read more here.
Who Should File an Income Tax Return?
Every Indian, including an NRI, is required to file an Income tax return where Total Income exceeds the basic exemption limit. Under the Old Tax Regime (Opt-in), the basic exemption limit for filing an Income Tax Return (ITR) varies based on age categories. For individuals below 60 years, the threshold is set at Rs. 2.5 lakh. Senior citizens aged 60 to 79 years have an increased exemption limit of Rs. 3 lakh, while super senior citizens, those aged 80 years and above, benefit from an exemption limit of Rs. 5 lakh. In contrast, the New Tax Regime (Default) offers a simplified structure, setting the exemption limit at Rs. 3 lakh for both individuals below 60 years and senior citizens while maintaining the Rs. 5 lakh limit for super senior citizens.
You are required to file a return irrespective of whether you have paid tax or not. So, even if the employer has deducted TDS in full, you are still required to file an income tax return.
However, there are certain conditions, other than income above the Basic Exemption Limit, due to which a person would be mandatorily required to file an ITR!
Such conditions are :
- If Business Turnover exceeds Rs.60 lakh
- If a person carries on a Profession and Professional Receipts exceed Rs.10 lakh
- If the Total TDS and TCS amount exceeds Rs.25000
- If Total deposits in one or more Savings accounts exceed Rs.50 lakh
- If Total deposits in one or more Current Account exceeds Rs.1 crore
- If Foreign Travel expenses in a year exceed Rs.2 Lakh
- If Total Electricity expenses in a year exceed Rs.1 lakh
If an individual has Income from foreign assets or is a beneficiary of an asset located in a foreign country.
What Documents are Required to File ITR?
Although documents differ from the income source, there are still a few documents that are common while filing an ITR. Also, note that you do not need to submit/upload any of the documents on the website; these are advised to be kept with you so that required information can be filled in correctly, your time is saved, and common errors can be avoided)
PAN Card- PAN is a mandatory requirement while filing the Income Tax Return. Your name & DOB on ITR should be the same as per data from the Income Tax Department.
Aadhaar Card- The government has also made it compulsory for all taxpayers to use Aadhaar while filing ITR.
Form 16 - For income under the head salaries
Form 26AS
AIS(Annual Information Statement) /TIS (Tax Information Summary)
Capital Gain/Loss Statement - If there is an income/loss under the head Capital Gains
Home loan interest Certificate (if applicable)
Bank Account Details- Your details of all the bank accounts, i.e., Bank account number, code, and Bank Name, need to be mentioned while filing ITR.
Challan Details-(If any tax paid) It includes details such as the challan no., BSR code, date, amount of payment of Advance Tax/ Self Assessment Tax, etc.
Original Return/Notice- If an individual is filing a revised return or a return is filed in response to a notice received, then he/she is required to fill in the details of the original return and details of the notice.
Check the complete list of documents for ITR filing when you have income from salary, house property, capital gains, and other sources.
How to File ITR for FY 2023-24 (AY 2024-25)?
The income tax department provides the facility for e-filing an income tax return. But before filing the ITR, a few points need to be considered:-
- Gather necessary documents: Collect all the relevant documents required to file your ITR, such as Form 16 (TDS certificate), bank statements, investment proofs, and any other supporting documents related to your income, deductions, and exemptions.
- Choose the appropriate ITR form: Determine the applicable ITR form based on your income sources, residential status, and other factors. In India, different ITR forms (ITR-1 to ITR-7) are available for different categories of taxpayers. Ensure you select the correct form that aligns with your specific situation.
- Calculate your taxable income: Calculate your total income for the financial year by considering all sources of income, including salary, business income, rental income, capital gains, and other income. Deduct eligible deductions and exemptions to arrive at your taxable income.
- Fill out the ITR form: Fill out the selected ITR form accurately, providing the required details such as personal information, income details, deductions, tax payments made, and other relevant information. Take care to fill in the correct details to avoid any discrepancies.
To file the income tax return online, just visit the ITR e-filing website.
Step 1: Log in to the e-filing portal using your user ID and password.
Step 2: On your Dashboard, click e-File > Income Tax Returns > File Income Tax Return.
Step 3: Select Assessment Year as 2023–24 and Mode of filling as online, then click continue.
Step 4: In case you have already filled the Income Tax Return and it is pending for submission, click Resume Filing. In case you wish to discard the saved return and start preparing the return afresh, click Start New Filing.
Step 5: Select Status as applicable to you and click Continue to proceed further.
Step 6: You have two options to select the type of Income Tax Return:
- If you know which ITR to file, Select the ITR form; else
- If you are not sure which ITR to file, you may select Help me decide which ITR Form to file and click Proceed. Here, the system helps you determine the correct ITR; then, you can proceed with filing your ITR.
Note:
- In case you are not aware which ITR or schedules are applicable to you or income and deductions details, your answers in response to a set of questions will guide you in determining the same and help you in correct / error-free filing of ITR.
- In case you are aware of the ITR or schedules applicable to you or income and deduction details, you can skip these questions.
Step 7: Once you have selected the ITR applicable to you, note the list of documents needed and click Let’s Get Started.
Step 8: Select the checkbox applicable to you regarding the reason for filing ITR and click Continue.
Step 9: In case you wish to opt for the New Tax Regime, select Yes in the Personal Information Section. Please note the pop-up information that certain deductions and exemptions are not available in the new tax regime. Review your pre-filled data and edit it if necessary. Enter the remaining/additional data (if required). Click Confirm at the end of each section
Step 10: Enter/ Edit your income and total deductions details in the different sections. After completing and confirming all the sections of the form, click Proceed.
Step 10a: In case there is a tax liability
After clicking on total tax liability, you will be shown a summary of your tax computation based on the details provided by you. If there is tax liability payable based on the computation, you will get the Pay Now and Pay Later options at the bottom of the page.
Note:
- It is recommended to use the Pay Now option.
- If you opt to Pay Later, you can make the payment after filing your Income Tax Return, but there is a risk of being considered as taxpayer in default, and liability to pay interest on tax payable may arise.
Step 10b: In case there is no tax liability (No Demand / No Refund) or if you are eligible for a Refund
Click Preview Return. If there is no tax liability payable, or if there is a refund based on tax computation, you will be taken to the Preview and Submit Your Return page.
Step 11: If you click on “Pay Now,” you will be redirected to the e-pay Tax service. Click Continue
Note:
You will be taken to the e-Pay Tax page on the portal to make tax payments after you click Continue. Refer to e-Pay Tax user manuals to learn more.
Step 12: After successful payment through e-filing portal, a success message is displayed. Click Back to Return Filing to complete the filing of ITR.
Step 13: Click Preview Return.
Step 14: On the Preview and Submit Your Return page, select the declaration checkbox and click Proceed to Preview.
Note: If you have not involved a tax return preparer or TRP in preparing your return, you can leave the text boxes related to TRP blank.
Step 15: Preview your return and click Proceed to Validation.
Step 16: Once validated, on your Preview and Submit your Return page, click Proceed to Verification.
Note: If you are shown a list of errors in your return, you need to go back to the form to correct the errors. If there are no errors, you can proceed to e-Verify your return by clicking Proceed to Verification.
Step 17: On the Complete your Verification page, select your preferred option and click Continue.
It is mandatory to verify your return, and e-Verification (recommended option – e-Verify Now) is the easiest way to verify your ITR – it is quick, paperless, and safer than sending a signed physical ITR-V to CPC by speed post.
Note: In case you select e-Verify Later, you can submit your return; however, you will be required to verify your return within 30 days of filing your ITR.
Step 18: On the e-Verify page, select the option through which you want to e-Verify the return and click Continue.
Once you e-verify your return, a success message is displayed along with the Transaction ID and Acknowledgment Number. You will also receive a confirmation message on your mobile number and email ID registered on the e-filing portal.
How to File ITR with Tax2win?
You can file the Income Tax return with Tax2win easily and smoothly. Tax2win simplifies the process of filing Income Tax Returns (ITR) and offers comprehensive tax-related services. With a user-friendly interface and step-by-step guidance, it enables individuals to easily file their ITR online
Step 1: Visit the tax2win
website. Here, click on the option “File ITR Now”.
Step 2: Select your source of Income and click on continue.
Step 3: If you're a salaried individual, Just Upload your Form 16. If you do not have any form 16, you can skip the option and move further.
Step 4: Enter the Financial Year, PAN & Aadhaar details, and other basic details like your Employment Details, income Details, Deductions(If Any), and bank details. Input your prepaid taxes after giving the details of all the information.
Step 5: Review your tax computation and click on the “File My ITR” button. And it is done!!
What Will be the Next Steps After e-filing of Income Tax Returns?
Once you are done with the e-filing of your income tax return, you must:-
- Check your inbox for the email id as provided in your income tax return form, You will receive an intimation for the successful filing of your Income Tax Return, along with ITR-V (Acknowledgement) attached with eMail.
- Cross-check all figures thoroughly in your filled ITR form or ITR-V for any error, mistake, etc.
- Verify the Income-tax return by sending a physical copy to CPC Bangalore or you can e-Verify online. Once the return has been successfully Verified, the return filing procedure ends here. And now your job is done.
- In case you have a refund in your tax return, you shall receive the same in your bank account within the next few days. It is better to keep tracking your income tax refund status so that you do not miss out on any important updates from the department. You can check the refund status here.
Note:- Verification of an ITR is an important step without which your return filing process is not completed. If you fail to verify your ITR within the time limit (30 days), it shall be considered “Invalidate,” i.e., null and void. It means that no Income Tax Return has been filed at all.
File your Income Tax Return with absolute ease with us in just 3 steps:
- Upload Form 16: Visit our e-filing portal, select your sources of income & upload Form 16.
- Review: Our advanced software automatically picks up the required information & fills in your details by itself. Simply review the information.
- File ITR: As soon as you give your confirmation, our system files your income tax return online.
You can learn more about Form 16 here.
What will happen when I have taxable income but do not File my Income Tax Return?
Having taxable income and not filing an income tax return can put you in trouble with the Income Tax Authorities. Be prepared to welcome notices from the Income Tax Department along with fines and penalties. The consequences of non-filing of return are:
- Late filing Fee u/s 234F shall be levied if the return is not filed on or before the due date. The quantum of fees shall vary according to the amount of your income and return filing date. The maximum fee levied is Rs. 5000/-.
-
Notice u/s 142(1), which requires you to file your return if you have not filed it before the due date. if you fail to comply with this notice, then it may result in
(a) Best Judgment Assessment u/s 144 and/or
(b) Penalty of Rs. 10,000 u/s 271(1)(b) and/or
(c) Imprisonment with or without fine u/s 276D.
- Notice u/s 148 for furnishing return within the period as mentioned in the notice itself.
-
As per Section 270A, if income is under-reported due to
- Wrong disclosure/misreporting then the penalty shall be leviable @200% of tax payable on such income and
- In any other case, the penalty shall be 50% of the tax payable on such income
- A penalty of a minimum of 100% to a maximum of 300% of the amount of tax for concealment of income u/s 271(1)(c).
- Interest u/s 234A keeps on mounting at the rate of 1% per month/ part of the month till the time you file your return. Also, you'd be required to pay interest u/s 234B and 234C, both at the rate of 1% per month/ part of the month if you've not complied with the advance tax provisions at the time of late filing of return.
- If you have losses (Business, Capital loss) that you want to be carried forward, you can not carry forward your loss if you do not file an Income Tax Return or file after the due date.
5 Important Changes to Keep in Mind While Filing ITR for FY 2023-24 (AY 2024-25)?
Reporting of virtual digital assets while filing an income tax return
As per the latest update in 2023, the income generated via the transfer of VDAs like crypto assets is subject to taxation at a rate of 30 percent (including surcharge and cess). It's important to note that deductions for expenses, except for the cost of acquisition (if applicable), are not allowed when calculating such income. Income from VDAs cannot be reported on ITR-1 or ITR-4; instead, it should be reported on form ITR-2 or ITR-3 under the head of business income or capital gains.
Rules on opting out of new tax regime
Starting in 2024, the new regime has become the default regime. Therefore, you have to explicitly select the old regime if you want to change it. While salaried persons can switch their regimes every year, business professionals only have the option to switch regimes once in their lifetime. Salaried people can switch regimes while filing their ITR, and business professionals are required to submit Form 10 IEA to opt out of the new regime by the last date to file the ITR, but before filing the ITR.
80G deduction Claim
To claim the deduction under Section 80 G, it is important to provide the donation receipt and the donation certificate in Form 10BE. In the ITR form, taxpayers need to disclose their donations in the applicable 'Schedule 80G'. A new column has been added to 'Table D' in the current year's ITR form, requiring the disclosure of the ARN (Donation Reference Number) for donations made to entities where a 50% deduction is allowed, subject to the qualifying limit. The ARN should be obtained from the donation certificate issued in Form 10BE by the donee institutions and should be mentioned in the ITR.
Intraday trading reporting
Profit or loss from intraday trading is categorized as business income for taxation purposes. The current year's ITR form includes Part A–Trading Account, where individuals need to provide separate information regarding their intraday trading activities. The form requires details such as turnover from intraday trading and income from intraday trading transferred to the Profit and Loss account.
Section 89A relief claim
If an individual has claimed relief under Section 89 ( income from retirement benefit accounts held in specified countries), they need to provide the relevant information in Schedule Salary of the ITR form.
The ITR filing for the FY 2023-24 has already started. File early and say no to last-minute hassle. Get CA-assisted ITR filing services to ensure accurate and seamless ITR filing. Book an Online CA Now!
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