Annual filing of Income Tax Returns
"It was only for the good of his subjects that he collected taxes from them, just as the Sun draws moisture from the Earth to give it back a thousand fold."
- Kalidas in Raghuvansh eulogizing KING DALIP
In the modern times, income tax is an annual tax on income. The Indian Income Tax Act (External website that opens in a new window) (Section 4) provides that in respect of the total income of the previous year of every person, income tax shall be charged for the corresponding assessment.
Paying income tax is compulsory for all citizens whose gross total income - which includes income from salary, business, capital gains, property and other sources, before allowing for deductions - exceeds the basic exemption limit.
| What is Income Tax? | ||
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Income tax is the direct tax paid to the Central
Government by an individual or a company/firm within a given financial
year (April-March). The Income Tax Department (External website that opens in a new window) is governed by the Central Board for Direct Taxes (External website that opens in a new window) (CBDT) and is part of the Department of Revenue (External website that opens in a new window) under the Ministry of Finance (External website that opens in a new window), Government of India. The Income Tax Act (External website that opens in a new window), 1961 as amended by Finance Act 2012 (External website that opens in a new window), makes it obligatory upon any person to file a return if the person's total income or the total income of any other person in respect of which he is assessable - under this Act during the previous year - exceeded the maximum amount which is not chargeable to income-tax. |
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Who is to pay Income Tax?
The word income has a very broad and inclusive meaning. In case of a
salaried person, all that is received from an employer in cash, kind or
as a facility is considered as income. For a businessman, his net
profits will constitute income. Income may also flow from investments in
the form of Interest, Dividend, and Commission etc. Infact the Income
Tax Act does not differentiate between legal and illegal income for the
purpose of taxation. Under the Act, all incomes earned by people are
classified into five different heads, such as: income from salary,
income from house property, income from business or profession, income
from capital gains and income from other sources.| Tax Deduction at Source (TDS) | ||
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Tax Deduction at Source (TDS) is one of the modes of collection of
taxes, by which a certain percentage of amounts are deducted from a
person at the time of making/crediting certain specific nature of
payment to the other person and the deducted amount is remitted to the
Government account. It is similar to "pay as you earn" scheme also known
as Withholding Tax in many other countries. Every person responsible for making payment of nature covered by TDS provisions of Income Tax Act shall be responsible to deduct tax. However, in case of payments made under sec. 194A, 194C, 194H, 194I and 194J in respect of individual and HUF, only if the turnover or professional receipt exceeds sum of Rs.40 lakh or Rs.10 lakh respectively (the limits are Rs.60 Lakh or Rs.15 Lakh respectively w.e.f. 01.07.2010) in previous year, he is required to deduct tax at source. |
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Income Tax Rates
Individuals, Hindu undivided families, AOPs, BOIs - The tax rates
applicable to individuals are also applicable to a Hindu undivided
family, an association of persons, body of individuals or an artificial
juridical person. The rates applicable for the assessment years 2012-13
and 2013-14 are as follows:Tax Liability to be computed for Assessment Year 2012 -2013 (Financial Year 2011-2012)
NB:- Individuals and HUF shall have to file ITR in only e-Return (External website that opens in a new window) format if the total income for AY 2012-13 is Rs.10 lakh and above.
| Income (In Rs.) | Tax Liability (In Rs.) |
|---|---|
| In case of individuals (other than women and individuals who are of the age of 60 years or more at any time during the financial year 2011-12) | |
| Upto Rs.1,80,000 | Nil |
| Between Rs.1,80,001 - Rs.5,00,000 | 10% |
| Between Rs.5,00,001 - Rs.8,00,000 | 20% |
| Above Rs.8,00,000 | 30% |
| In case of women (other than women who are of the age of 60 years or more at any time during the financial year 2011-12) | |
| Upto Rs.1,90,000 | Nil |
| Between Rs.1,90,001 - Rs.5,00,000 | 10% |
| Between Rs.5,00,001 - Rs.8,00,000 | 20% |
| Above Rs.8,00,000 | 30% |
| In case of individuals who are of the age between 60 and 80 years at any time during the financial year 2011-12 | |
| Upto Rs.2,50,000 | Nil |
| Between Rs.2,50,001 - Rs.5,00,000 | 10% |
| Between Rs.5,00,001 - Rs.8,00,000 | 20% |
| Above Rs.8,00,000 | 30% |
| In case of individuals who are of the age of 80 years or more at any time during the financial year 2011-12 | |
| Upto Rs.5,00,000 | Nil |
| Between Rs.5,00,001 - Rs.8,00,000 | 20% |
| Above Rs.8,00,000 | 30% |
| In all the above cases 3% of the Income-tax will be Education Cess. | |
| More details on tax liability computation can be found here (External website that opens in a new window). | |
The tax liability to be computed for Assessment Year 2013 -2014 (Financial Year 2012-2013)
| Income (In Rs.) | Tax Liability (In Rs.) |
|---|---|
| In case of individuals (other than individuals who are of the age of 60 years or more at any time during the financial year 2012-13) | |
| Upto Rs.2,00,000 | Nil |
| Between Rs.2,00,001 - Rs.5,00,000 | 10% |
| Between Rs.5,00,001 - Rs.10,00,000 | 20% |
| Above Rs.10,00,000 | 30% |
| In case of individuals who are of the age between 60 and 80 years at any time during the financial year 2012-13 | |
| Upto Rs.2,50,000 | Nil |
| Between Rs.2,50,001 - Rs.5,00,000 | 10% |
| Between Rs.5,00,001 - Rs.10,00,000 | 20% |
| Above Rs.10,00,000 | 30% |
| In case of individuals who are of the age of 80 years or more at any time during the financial year 2012-13 | |
| Upto Rs.5,00,000 | Nil |
| Between Rs.5,00,001 - Rs.10,00,000 | 20% |
| Above Rs.10,00,000 | 30% |
| In all the above cases 3% of the Income-tax will be Education Cess | |
vide Notification No S.O.626 (E) dated 28th
March, 2012 to provide that individuals and HUF shall have to file
Income Tax Return for Assessment Year 2012-13 (Financial Year 2011-12)
and onwards in only
E-filing of Income Tax Returns
The E-Filing - External website that opens in a new window
facility was introduced by the Income Tax Department for the first time
during assessment year 2006-07. At present, it is mandatory for
companies and firms requiring statutory audit under Section 44AB to
e-file their Income Tax Returns. Also, the e-filing benefit has been
extended to all assesses.For registration in e-filling portal please click here - External website that opens in a new window.
Related Links
- Online Tax Calculator (External website that opens in a new window)
- Ministry of Finance (External website that opens in a new window)
- Income Tax Department (External website that opens in a new window)
- E-Filing Portal (External website that opens in a new window)
- Download Income Tax Return forms (External website that opens in a new window)
- Frequently Asked Questions
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