Income Tax Basics Guide

This document covers

1. Persons required to file Income Tax
2. Due dates for filing Income Tax Return
3. Previous Year and Assessment Year
4. Applicable Tax Rates
5. Benefits of filing the income tax return
6. Consequences of non-filing of Income Tax return
7. How to eFile your IT Return?

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.

Any person other than a company or Firm who is not required to file income tax return is also required to file income tax return in the following cases

1. The person has deposited an amount or aggregate of amounts exceeding Rs 1 crore in 1 or more current accounts
2. The person has spent an amount exceeding Rs 2 lakhs for himself or any other person for travel to a foreign country
3. The person has spent an amount or aggregate of amounts exceeding Rs 1 lakhs towards consumption of Electricity

CBDT has inserted rule 12AB stating the conditions where any person who is not required to file income tax return is also required to file income tax return in the following cases

1. If the total Sales, turnover or gross receipts in the business exceeds Rs 60 lakhs during the financial year
2. If the total gross receipts in profession exceeds Rs 10 lakhs
3. The aggregate TDS and TCS during the financial year is 25000 or more (For Senior Citizens, it is 50000 or more)
4. The deposit in 1 or more savings bank account is Rs 50 lakhs or more

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 taxpayers 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 – 31st October of relevant assessment year.
3. Working Partner of a firm whose accounts are required to be audited – 31st October of relevant assessment year.

3. Previous Year and Assessment Year

Previous Year: It means the financial year immediately preceding the assessment year. The income earned during the previous year is taxable in the assessment year.

Assessment Year: This means a period of 12 months commencing on 1st April every year. The year in which income is earned is previous year and such income is taxable in the immediately following year i.e, assessment year.

For Example, income earned in the previous year FY 2023-24 (from 01st Apr 2023 to 31st Mar 2024) is taxable in assessment year (AY) 2024-25.

4. Applicable Tax Rates

1. Individual / HUF / AOP /BOI / Artificial Judicial Person
   
   

   Income	Rate of Tax
   0 – Rs 2,50,000	Nil
   Rs 2,50,001 -Rs 5,00,000	5%
   Rs 5,00,001 -Rs 10,00,000	20%
   Above Rs 10,00,000	30%

   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:

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   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.

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

   NEW       NOTE

   ---

   Budget 2025 proposed the increase of Basic Exemption Limit in New tax regime. The Basic exemption limit to file Income tax returns under New Tax regime for Individuals or HUF is Rs 4,00,000

   FY 2025-26 Applicable to Resident Individuals (<60 years), Senior Citizens (>=60 years and <80 years ) and Super Senior Citizens (>=80 years)

   Income	Rate of Tax
   0 – 4,00,000	0%
   4,00,001 – 8,00,000	5%
   8,00,001 – 12,00,000	10%
   12,00,001 – 16,00,000	15%
   16,00,001 – 20,00,000	20%
   20,00,001 – 24,00,000	25%
   Above 24,00,000	30%

2. Firm /LLP /Local Authority – 30% on the total income
3. Co-Operative Society
   
   

   Income	Rate of Tax
   0-Rs 10,000	10% of total income
   Rs 10,001 – Rs 20,000	20% of total income
   Above Rs 20,001	30% 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

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.

7. How to eFile your IT Return?

Its Easy ... all you need to do is register yourself @ eztax.in and follow the instructions