Income Tax Basics

Return of Income:

The due date for filing the return of income is 30th September in the case of company assesses and assesses who are required to get their books of account audited and for all others, the due date is 31st July.

Sl. No. Name of return Description
1 ITR 1 For individuals being a resident other than not ordinarily resident having Income from Salaries, income from one house property, income from other sources (Interest etc.) and having total income up to Rs.50 lakh.
2 ITR 2 For Individuals and HUFs not having income from profits and gains of business or profession.
3 ITR 3 For individuals and HUFs having income from profits and gains of business or profession.
4 ITR 4 For the taxpayers, who have opted for presumptive income scheme as per section 44 AD, section 44 ADA and section 44 AE of the Income Tax Act.
5 ITR 5 For persons other than:-

(i) Individual;

(ii) HUF;

(iii) Company and

(iv) Person filing Form ITR-7
6 ITR 6 For Companies other than companies claiming exemption under section 11.
7 ITR 7 For persons including companies, who are required to furnish returns under section 139(4A) or 139(4B) or 139(4C) or 139(4D).

Tax Rates for AY 2023-24:

Income Tax Rate & Slab for Individuals & HUF:

Individual (Resident or Resident but not Ordinarily Resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year & for HUF:

     Taxable Income Tax Rates

(Existing Scheme)

 Tax Rates

(New Scheme)
Up to  Rs. 2,50,000 Nil Nil
Rs. 2,50,001 to Rs. 5,00,000 5% 5%
Rs. 5,00,001 to Rs. 7,50,000 20% 10%
Rs. 7,50,001 to Rs. 10,00,000 20% 15%
Rs. 10,00,001 to Rs. 12,50,000 30% 20%
Rs. 12,50,001 to Rs. 15,00,000 30% 25%
Above Rs. 15,00,000 30% 30%

Resident or Resident but not Ordinarily Resident senior citizen, i.e., every individual, being a resident or Resident but not Ordinarily Resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:

     Taxable Income Tax Rates

(Existing Scheme)

 Tax Rates

(New Scheme)
Up to  Rs. 2,50,000 Nil Nil
Rs. 2,50,001 to Rs. 3,00,000 Nil 5%
Rs. 3,00,001 to Rs. 5,00,000 5% 5%
Rs. 5,00,001 to Rs. 7,50,000 20% 10%
Rs. 7,50,001 to Rs. 10,00,000 20% 15%
Rs. 10,00,001 to Rs. 12,50,000 30% 20%
Rs. 12,50,001 to Rs. 15,00,000 30% 25%
Above Rs. 15,00,000 30% 30%

Resident or Resident but not Ordinarily Resident super senior citizen, i.e., every individual, being a resident or Resident but not Ordinarily Resident in India, who is of the age of 80 years or more at any time during the previous year:

     Taxable Income Tax Rates

(Existing Scheme)

 Tax Rates

(New Scheme)
Up to  Rs. 2,50,000 Nil Nil
Rs. 2,50,001 to Rs. 5,00,000 Nil 5%
Rs. 5,00,001 to Rs. 7,50,000 20% 10%
Rs. 7,50,001 to Rs. 10,00,000 20% 15%
Rs. 10,00,001 to Rs. 12,50,000 30% 20%
Rs. 12,50,001 to Rs. 15,00,000 30% 25%
Above Rs. 15,00,000 30% 30%

Surcharge:

  1. a) 10% of Income tax where total income exceeds Rs.50 lakh
  2. b) 15% of Income tax where total income exceeds Rs.1 crore
  3. c) 25% of Income tax where total income exceeds Rs.2 crore
  4. d) 37% of Income tax where total income exceeds Rs.5 crore

Firms –

Taxable at 30% and education cess @ 4% of such income tax and surcharge.

Surcharge:

If the total income exceeds Rs. 1 crore then, surcharge = 12% of such tax.

Local Authority –

Taxable @ 30% of total income and Education cess @ 4% of the income tax and surcharge.

Surcharge:

If the total income exceeds Rs. 1 crore then, surcharge = 12% of such tax.

Domestic Company –

Taxable @ 25% of total income and Education cess @ 4% of the income tax and surcharge shall be:

Companies having level of income                                                          Surcharge

Less than Rs. 1 Crore                                                                                       Nil

Rs. 1 Crore to Rs. 10 Crore                                                                              7%

More than Rs. 10 Crore                                                                                   12%

Section 115 BAA:

  1. Any domestic company has an option to pay tax at 22%, subject to the following conditions:
  • The total income is computed without claiming prescribed deductions or set-off of loss.
  • The option needs to be exercised within the prescribed time for filing the return of   income (ROI) under section 139(1) of the Act for assessment year (AY) 2020-21 or subsequent AYs.
  1. Once exercised, such option cannot be withdrawn for the same or subsequent AYs.
  2. Such companies should not avail any exemptions/incentives under different provisions of income tax. Therefore, the total income of such company shall be computed without:
    • Claiming any deduction especially available for units established in special economic zones under section 10AA.
    • Claiming additional depreciation under section 32 and investment allowance under section 32AD towards new plant and machinery made in notified backward areas in the states of Andhra Pradesh, Bihar, Telangana, and West Bengal.
    • Claiming deduction under section 33AB for tea, coffee and rubber manufacturing companies.
    • Claiming deduction towards deposits made towards site restoration fund under section 33ABA by companies engaged in extraction or production of petroleum or natural gas or both in India.
    • Claiming a deduction for expenditure made for scientific research under section 35.
    • Claiming a deduction for the capital expenditure incurred by any specified business under section 35AD.
    • Claiming a deduction for the expenditure incurred on an agriculture extension project under section 35CCC or on skill development project under section 35CCD.
    • Claiming deduction under chapter VI-A in respect to certain incomes, which are allowed under section 80IA, 80IAB, 80IAC, 80IB and so on, except deduction under section 80JJAA.
    • Claiming a set-off of any loss carried forward from earlier years, if such losses were incurred in respect of the aforementioned deductions.
  3. The new effective tax rate, which will apply to domestic companies availing the benefit of section 115BAA is 25.168%. The break up of such tax rate is as follows:
Base Tax Rate Surcharge Cess Effective Tax Rate
22% 10% 4% 25.168%

5.  Such companies will not be required to pay minimum alternate tax (MAT) under section 115JB of the act.

6.  The option to be exercised in accordance with the provisions of sub-section (5) of section 115BAA by a person, being a domestic                            company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall be in Form No.                    10-IC.

Advance Tax

Advance tax is the income tax payable if your tax liability exceeds Rs 10,000 in a financial year. Advance tax should be paid in the year in which the income is received. The provisions of advance tax are applicable on all types of persons irrespective of the residential status of the person. The advance tax is to be paid in the following installments on the following dates:

Individuals / Firms –

Installment No.  

Date

% of Estimated Tax Liability

1

15th September

30

2

15th December

60

3

15th March

100

Companies –

Installment No.  

Date

% of Estimated Tax Liability

1

15th June

15

2

15th September

45

3

15th December

75

4

15th March

100