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Home > Income Tax > Help Center > Income Tax GuideLast Updated: Feb 03rd 2023

Income Tax Basics Guide

Income Tax is a tax levied on the total income of the previous year of every person. A person includes an individual, Hindu Undivided family (HUF), Firm, Company, Association of Persons (AOP), Body of Individuals (BOI) etc. Income Tax is considered as direct tax as it is levied directly on the income of the person.

1. Persons required to file Income Tax

Income Tax return is the format in which the assessee is required to furnish information relating to his total income and tax payable. According to Sec 139(1) of the Income Tax act, the following persons are required to file Income Tax returns

1. Firms and Companies
2. Persons other than a company or firm whose total income in India exceeds the basic exemption limit.
3. A resident other than not ordinarily resident who at any time during the previous year

  • Holds any asset (including financial interest in any entity) outside India as beneficial owner or otherwise (or) has a signing authority in any account located outside India
  • Beneficiary of any asset (including financial interest in any entity) located outside India.

2. Due dates for filing Income Tax Return

The income tax returns are required to be filed within due date. Due dates for different category of tax payers as described

  1. Individuals, HUF, AOP, Firm, BOI (With no audit requirement) – 31st July of relevant assessment year.
  2. Company, taxpayers whose accounts needs to be audited – 30th September of relevant assessment year.
  3. Working Partner of a firm whose accounts are required to be audited – 30th September of relevant assessment year.
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4. Applicable Tax Rates

  1. Individual / HUF / AOP /BOI / Artificial Judicial Person
    IncomeRate of Tax
    0 – Rs 2,50,000Nil
    Rs 2,50,001 -Rs 5,00,0005%
    Rs 5,00,001 -Rs 10,00,00020%
    Above Rs 10,00,00030%

    Note 1:

    • For resident Senior Citizens (age of 60 years or more but less than 80 years) – the basic exemption limit is Rs 3,00,000
    • For Super Senior Citizens (age of 80 years or more) – basic exemption limit is Rs 5,00,000

    NOTE 2:
    2: W.e.f FY 2020-21, the basic exemption slab is Rs 2,50,000 for all the taxpayers irrespective of age under New Tax Regime.

    NEW  As per budget 2023, the basic exemption slab is Rs 3,00,000 for all the taxpayers irrespective of age under New Tax Regime

  2. Firm /LLP /Local Authority – 30% on the total income
  3. Co-Operative Society
    IncomeRate of Tax
    0-Rs 10,00010% of total income
    Rs 10,001 – Rs 20,00020% of total income
    Above Rs 20,00130% of total income
  4. Domestic Company
    1. If the total turnover in the P.Y 2015-16 ≤ Rs 50 crores – 25% of total income.
    2. In case of any other companies – 30% of total income
  5. Foreign Company- 40% of total income
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5. Benefits of filing the income tax return:

The following are the benefits in filing Income Tax returns

  • Claim of Refund when there is extra deduction of tax.
  • Processing of Loan Applications /Credit Card Applications.
  • Carry forward of losses.
  • Protection against Black Money.
  • Avoid penalties or scrutiny from Income Tax department.
  • Growth of the Nation
  • Visa Application

6. Consequences of non-filing of Income Tax return

All the persons should file Income Tax return within due date. Non-filing of income tax return has adverse consequences

  1. Penalty u/s 234F varying from Rs 1000 to Rs 5,000 which depends on the income.
  2. Interest u/s 234A @ 1% per month from the due date to date of filing
  3. Interest u/s 234B @ 1% per month from the end of financial year
  4. Interest u/s 234C @ 1% per month which depends on the payment of advance tax.
  5. Non-carry forward of losses
  6. Best judgement assessment by the assessing officer
  7. Penalty for concealment of income or prosecution for failure to furnish return of income.

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