You may be new to filing your income tax returns due to change in your annual income or increase in the taxable income. So as a taxpayer, you have to be aware of terms like income tax refunds that you receive on paying excess taxes. Before, filing for returns, here are certain things you should know how to claim tds refund.
What is Income Tax?
All the citizens that fall in the tax bracket have to pay income tax to the tax department. The taxes collected from taxpayers are used to pay for the infrastructure like roads, government resources, railways, and healthcare amongst others. As a citizen of India, it is the duty of a taxpayer to pay their taxes on time and file the Income Tax Returns (ITR) as per the tax slabs.
Does Everyone Have to Pay the Taxes?
Yes, everyone has to pay their taxes according to the income tax slab. After Budget 2020, the tax slabs have changed. But the plus point of the new tax regime is that you can choose to pay the taxes according to the new tax slab or the old one.
Who Has to File for Income Tax Returns?
Before deductions under Section 80C to Section 80U of the Income Tax Act, 1961, if your total income is under INR 2 lakhs, then you have to file your Income Tax Returns (ITR). The cap for senior citizens is INR 3 lakhs. If you also have other sources of income like property, then it is mandatory to file your ITR.
What is Income Tax Refund?
An income tax refund is a repayment if you have paid excess taxes in that financial year. This is the reason why filing your Income Tax Returns is essential as you are able to claim a refund for any extra Tax Deducted at Source (TDS) that was charged. The refund amount gets transferred to your bank account and the status of the processing can be checked online.
Can I File For Income Tax Refund Online?
Yes, you can now file your Income Tax Refund online on the official website, www.incometaxindiaefiling.gov.in. You can also track the status of your returns and the refunds with the help of the website. You have to register by providing your PAN (Permanent Account Number), date of birth, name, etc.
When Should the Income Tax Returns Be Filed?
You have to file your Income Tax Returns before July 31 if you are filing it online. It is advised to file your returns a month or two in advance as last-minute filing can lead you to encounter a lot of traffic on the website. If you are not sure about e-filing your returns, there are many websites that help you with it by charging a fee.
What Are the New Income Tax Slabs?
The Union Budget of 2020 has been announced and there various changes in the exemptions and deductions you could claim. Also, the tax slabs have been updated and you can now choose which tax regime you want to opt for.
New Tax Slabs for FY 2020-2021
Tax Slab | Income Tax |
Up to INR 2.5 lakh | Nil |
INR 2.5 lakh to INR 5 lakh | 5% of the total income which is more than the tax slab |
INR 5 lakh to INR 7.5 lakh | 10% of the total income which is more than the tax slab |
INR 7.5 lakh to INR 10 lakh | 15% of the total income which is more than the tax slab |
INR 10 lakh to INR 12.5 lakh | 20% of the total income which is more than the tax slab |
INR 12.5 lakh to INR 15 lakh | 25% of the total income which is more than the tax slab |
INR 15 lakh and above | 30% of the total income which is more than the tax slab |
Under the new tax regime, here are some income tax deductions and exemptions that you cannot claim if you choose the new tax slabs:
● Leave Travel Allowance (LTA)
● House Rent Allowance (HRA)
● Standard Deduction
● Other special allowances
● Chapter VI-A deduction (80C, 80D, 80E and so on), except for Section 80CCD(2) which employer’s contribution to NPS
● Expenses during employment