In an income tax return (ITR), you submit information about your income and taxes to the Income Tax Department. The amount of tax you owe is calculated by your income. In case the return shows that excess tax has been paid during a year, the individual will be eligible to receive a refund from the Income Tax Department if excess tax was paid.
How many types of ITR Forms?
In India, there are currently seven types of Income Tax Return (ITR) forms, namely:
- ITR-1 (SAHAJ): For individuals having income up to Rs. 50 lakh and who have income from salary, one house property, other sources (interest, etc.), and agricultural income up to Rs. 5,000.
- ITR-2: For individuals and HUFs (Hindu Undivided Families) not carrying out business or profession but having income from capital gains, foreign assets, or more than one house property.
- ITR-3: For individuals and HUFs having income from business or profession.
- ITR-4 (SUGAM): For presumptive income from business and profession.
- ITR-5: For entities such as firms, LLPs (Limited Liability Partnerships), AOPs (Association of Persons), BOIs (Body of Individuals), and other artificial judicial persons.
- ITR-6: For companies other than companies claiming exemption under Section 11 of the Income Tax Act.
- ITR-7: For persons including companies required to furnish return under Sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F) of the Income Tax Act.
What is ITR 1?
Income Tax Return 1 (ITR 1) is a form used for filing income taxes in India. The form is used by individuals who have a total income of up to Rs 50 lakh and do not have any business or professional income. ITR 1 can be filed online or offline.
Who is Eligible to File ITR 1?
To be eligible to file ITR 1, the taxpayer must:
- Be a resident individual
- Have a total income of up to Rs. 5 lakhs in the financial year
- Not have any income from sources outside India
- Not have any income from business or profession
Documents Required to File ITR 1
Documents required to file ITR 1:
- Aadhaar number
- PAN number
- Income tax return form (ITR1)
- Acknowledgement/receipt of filed ITR1
- Proof of filing ITR1 (if e-filed)
How is income tax calculated in india?
In India, income tax is calculated on the basis of the income tax slab rates. The income tax slab rates are revised annually during the Union Budget. There are two tax regime for calculating tax one is old tax regime and new tax regime. A new tax regime was introduced in the Union Budget of 2020-21, which offers taxpayers the option to choose between the old tax regime and the new tax regime. The new tax regime has lower tax rates but also fewer deductions and exemptions.
Income Tax slabs & Rates as Per Old Regime FY 2022 – 2023
The following are the old tax regime slab rates for the financial year 2022-23:
- For individuals below the age of 60 years:
| Income Slab | Tax Rate |
| Up to Rs.2.5 lakh | Nil |
| Rs.2.50 lakh – Rs.5.00 lakh | 5% |
| Rs.5 lakh – Rs.10 lakh | 20% |
| Above Rs.10 lakh | 30% |
2. For senior citizens (60 years or more but less than 80 years):
| Income Slab | Tax Rate |
| Up to Rs. 3 lakh | Nil |
| Rs. 3 lakh to Rs. 5 lakh | 5% |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
3. For super senior citizens (80 years or more):
| Income Slab | Tax Rate |
| Up to Rs. 5 lakh | Nil |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
To calculate the income tax payable, an individual needs to determine his/her taxable income, which is calculated by deducting applicable deductions and exemptions from the total income. The income tax payable is then calculated based on the income tax slab rates applicable to the individual’s taxable income.
Under the new tax regime, taxpayers can avail of lower tax rates by forgoing most exemptions and deductions. For example, under the old tax regime, taxpayers were allowed to claim deductions for various expenses such as medical insurance, home loan interest, education loan interest, etc. However, under the new tax regime, most of these deductions are not available, and taxpayers are taxed at lower rates.
New Tax Regime (New Income Tax Slab for FY 2022 – 2023)
The following are the tax rates applicable under the new tax regime for individual taxpayers for the financial year 2022-23::
| Income Slab | Tax Rate |
| Up to INR 2.5 lakh | Nil |
| INR 2.5 lakh to INR 5 lakh | 5% |
| INR 5 lakh to INR 7.5 lakh | 10% |
| INR 7.5 lakh to INR 10 lakh | 15% |
| INR 10 lakh to INR 12.5 lakh | 20% |
| INR 12.5 lakh to INR 15 lakh | 25% |
| Above INR 15 lakh | 30% |
New Income Tax Slab for FY 2023 – 2024
Given below are the various tables for the Revised Income Tax Slabs and rates for the FY 2023 – 2024:
New Regime Income Tax Slab Rates for Individual
| Income Tax Slab | Tax Rate |
| Up to Rs.3 lakh | Nil |
| Rs.3 lakh – Rs.6 lakh | 5% |
| Rs.6 lakh – Rs.9 lakh | 10% |
| Rs.9 lakh – Rs.12 lakh | 15% |
| 12 lakh – Rs.15 lakh | 20% |
| Above Rs.15 lakh | 30% |
Note: New income tax rates are optional
Things you Must Keep in Mind before opting for New Tax Slab
If you are considering opting for a new tax slab, there are several things you should keep in mind:
- Eligibility Criteria: Make sure you meet the eligibility criteria to opt for the new tax slab. The new tax regime is applicable for individuals who are willing to forego certain tax exemptions and deductions available under the old tax regime.
- Taxable Income: Before deciding to opt for the new tax regime, calculate your taxable income under both the old and new tax regimes. It is important to evaluate which regime would be more beneficial for you based on your income and expenses.
- Tax Benefits: Assess the benefits you would be foregoing under the old tax regime. For instance, the standard deduction of Rs. 50,000 and various tax exemptions and deductions such as House Rent Allowance (HRA), Leave Travel Allowance (LTA), and medical insurance premium may not be available under the new tax regime.
- Future Goals: Evaluate your future goals such as investments, insurance policies, and other financial planning strategies. It is important to assess how these goals may be affected by the new tax regime.
- Tax Planning: If you have already invested in tax-saving instruments such as PPF, NSC, ELSS, or life insurance, it is important to evaluate the impact of the new tax regime on your tax planning strategies.
- Reversibility: Keep in mind that once you opt for the new tax regime, you cannot switch back to the old tax regime in the same financial year. Therefore, it is important to make an informed decision after considering all the above factors.
- Professional Assistance: Consult with a professional tax advisor or chartered accountant to understand the implications of the new tax regime on your tax liabilities and financial goals.
How to File ITR 1 Online?
In order to file ITR 1 online, you will need to have the following information and documents ready:
1. Your PAN card
2. Your bank account details
3. Your income details for the financial year (salary, interest earned, etc.)
4. Any relevant supporting documents ( Form 16/16A)
Once you have all of the required information and documents, you can begin the process of filing ITR 1 online by following these steps:
1. Visit the Income Tax e-filing website (incometaxindiaefiling.gov.in)
2. Login with your user ID and password
3. Click on the “e-File” tab and select “Income Tax Return”
4. Select ITR 1 from the list of forms available and click “Continue”
5. Enter your personal information as required and click “Submit”
6. Enter your income details and click “Submit”
7. Verify your tax liability and make any necessary payments 8. Download your completed ITR 1 form
FAQs
1. What is the use of ITR filing?
You cannot carry your losses forward or set them off if you do not file an income tax return. Filing an income tax return not only benefits you, but it also benefits the country. Taxes you pay are used to build infrastructure and to improve other facilities of the nation, including medical, defense, and so on.
2. Which ITR type for salary?
You can file an ITR-3 as a salaried employee if you receive income from salary, business or profession, house property (one or multiple properties), and capital gains.
3. How much salary income is tax free?
If an individual earns up to INR 5 lakh, they are not subject to taxes, but conditions apply.
4. How do I file my ITR for the first time?
Online: Enter the relevant data directly at the e-filing portal and submit it.
Taxpayers can file ITR 1 and ITR 4. Their PAN is automatically filled.
Select ‘Assessment Year’
Select ‘ITR Form Number’
Select ‘Filing Type’ as ‘Original/Revised Return’
Select ‘Submission Mode’ as ‘Prepare and submit online’
5. When there is no income, is it necessary to file an ITR?
We must file the ITR even if the income is not taxable in many cases.
6. Who is eligible for ITR?
Income tax returns are required for companies and firms, even if their income is below the exemption limit. Anyone with a valid PAN may file a tax return even if their income falls below the exemption limit. Income tax returns are available to individuals whose taxable income exceeds the maximum amount that cannot be taxed.