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Tax

Difference Between Financial Year (FY) and Assessment Year (AY)

Difference Between Financial Year (FY) and Assessment Year (AY) Learn how income is earned during the Financial Year and taxed in the Assessment Year, and why this distinction is crucial for your tax planning. Filing taxes is a critical part of an individual's financial responsibility. However, understanding the difference between the Financial Year (FY) and the Assessment Year (AY) can sometimes be confusing. These two concepts are essential for any taxpayer in India and play a significant role in the tax filing process. In this blog, we will break down the differences between these two periods and explain how they impact your taxes and Income Tax Return (ITR) filing. What is a Financial Year (FY)? The Financial Year (FY) refers to the 12-month period during which an individual or a business earns income. This period is used for calculating income, business profits, and losses for the purposes of taxation. In India, the financial year starts on April 1st of one calendar year and ends on March 31st of the following year. For example, income earned between April 1, 2023, and March 31, 2024 falls under Financial Year 2023-24. FY Breakdown by Quarters: First Quarter (Q1): April 1 to June 30 Second Quarter (Q2): July 1 to September 30 Third Quarter (Q3): October 1 to December 31 Fourth Quarter (Q4): January 1 to March 31 This period is crucial for taxpayers to track all income and expenses, including salary, investments, capital gains, and other sources of income. What is an Assessment Year (AY)? The Assessment Year (AY) is the year immediately following the Financial Year (FY). This is the period when the income earned in the previous FY is assessed and taxed. The AY is the year in which you file your Income Tax Return (ITR) to report your earnings and taxes owed for the income generated during the Financial Year (FY). For example, if you earned income during Financial Year 2023-24, it will be assessed and taxed in the Assessment Year 2024-25. The Assessment Year runs from April 1st of a given year to March 31st of the following year, similar to the Financial Year. However, the difference is that it’s the year when you report your income, claim deductions, and pay taxes owed. Why Are FY and AY Important for Taxpayers? Understanding FY and AY is critical for accurate tax planning and compliance. Here's why they matter: Tax Filing Deadlines: The income earned during a Financial Year is reported and filed during the subsequent Assessment Year. Taxpayers are required to file their ITR by July 31st of the Assessment Year (unless extended). Tax Payments: Any taxes owed for the Financial Year are settled during the Assessment Year. This is the period when individuals can clear any pending tax dues and receive refunds if applicable. Deductions and Tax Benefits: Tax-saving investments made during the Financial Year can be declared in the Assessment Year. The deductions under sections like 80C (for PPF, ELSS, life insurance premiums) are available for taxpayers to lower their taxable income. Key Differences Between FY and AY To make it easier for you to understand, here’s a table summarizing the key differences between the Financial Year (FY) and the Assessment Year (AY): Particulars Financial Year (FY) Assessment Year (AY) Meaning The year in which income is earned or profits are made. The year in which the income of the previous financial year is assessed and taxed. Period Runs from April 1 to March 31 of the respective year. Runs from April 1 to March 31 of the following year. Purpose To calculate income, profits, and losses for tax purposes. To file income tax returns and settle taxes owed. Tax Filing No tax filing is done in this period. Tax returns are filed for the income earned in the Financial Year. Example Income earned in FY 2023-24 is reported in AY 2024-25. Taxes are assessed and returns are filed for the income earned in FY 2023-24 during AY 2024-25. Key Points to Remember Tax Filing for FY: Tax returns are not filed during the Financial Year. Instead, they are filed in the Assessment Year. ITR Filing Deadline: The usual deadline for filing your Income Tax Return (ITR) is July 31st of the Assessment Year, though extensions may be granted. Tax Computation: The tax computation for a Financial Year happens during the Assessment Year. Impact of the Budget 2024 on FY and AY In the recent Budget 2024, several changes were introduced that impact taxpayers, especially concerning income tax slabs and tax-saving measures. The new tax regime was updated to reduce the tax burden on individuals and encourage more investments. Updated Tax Slabs for FY 2024-2025 (Assessment Year 2025-2026): Income up to Rs. 2.5 lakh: No tax Income between Rs. 2.5 lakh and Rs. 5 lakh: 5% Income between Rs. 5 lakh and Rs. 7.5 lakh: 10% Income between Rs. 7.5 lakh and Rs. 10 lakh: 15% Income between Rs. 10 lakh and Rs. 12.5 lakh: 20% Income between Rs. 12.5 lakh and Rs. 15 lakh: 25% Income above Rs. 15 lakh: 30% Additionally, taxpayers earning up to Rs. 7 lakh can claim a full rebate under Section 87A, eliminating their tax liability. These updates will influence your tax filing in Assessment Year 2025-2026 for income earned in Financial Year 2024-2025. Financial Year and Assessment Year: Example for Better Understanding Let’s simplify with a real-life example: Financial Year: April 1, 2023 to March 31, 2024 – This is when you earned your income. Assessment Year: April 1, 2024 to March 31, 2025 – This is the period when your income from the previous FY will be assessed, and you’ll file your ITR. Filing Your ITR: Tips for a Smooth Process Filing your Income Tax Returns can be a straightforward process if you follow these key steps: Maintain Organized Records: Ensure you have all your financial documents, including salary slips, bank statements, investment proofs, and receipts for expenses. This makes the filing process easier. Understand Tax Laws: Every year, the government introduces changes in tax laws through the Union Budget. It’s important to stay updated on these amendments so you can file your returns correctly. Utilize Tax Saving Instruments: Consider investing in tax-saving instruments such as PPF, ELSS, and National Savings Certificates before the end of the Financial Year to reduce your taxable income. Use E-filing Platforms: For ease of filing, consider using the Income Tax India e-filing portal or other tax preparation software. These platforms guide you through the filing process and help avoid mistakes. File Early: Avoid last-minute rushes by filing your ITR early. This not only ensures timely submission but also speeds up the processing of refunds. Conclusion Understanding the difference between Financial Year (FY) and Assessment Year (AY) is fundamental for any taxpayer. While the FY is the period in which income is earned, the AY is when that income is assessed and taxed. Being clear about these terms and knowing how they impact your tax filings will help ensure a smooth and hassle-free tax-filing process. Always stay informed about the latest tax changes and make sure to file your ITR on time to avoid penalties.

16-08-2024

Tax

CGST: India's Intrastate Tax levied on Goods and Services

CGST: India's Intrastate Tax levied on Goods and Services In 2017, India introduced the Goods and Services Tax (GST) to make taxes simpler. It replaced many indirect taxes with one single tax. A key part of GST is the Central Goods and Services Tax (CGST). This article will guide you on CGST, its purpose, and its role within GST. Understanding CGST Definition: CGST stands for Central Goods and Services Tax. The Indian central government taxes goods and services sold within a single state. CGST replaced old central taxes like excise duty, surcharges, and cesses. This updated the tax system by removing the need to pay multiple levies on a single transaction. Revenue Collection: The revenue collected through CGST goes directly to the central government's treasury. Objectives of CGST The introduction of CGST, along with the broader GST structure, addressed several problems in the earlier tax system: Previously, the supply chain could tax goods and services multiple times, but now it is removing double taxation. CGST, working with SGST (State Goods and Services Tax), helps prevent this by ensuring a single tax point for intrastate transactions. Reduced Tax Burden: By combining different taxes, CGST can lower the overall tax burden on certain goods and services. Simplified Compliance: Compared to the pre-GST era, GST (including CGST) offers businesses a more updated compliance process. Businesses must now deal with fewer tax filings and a more standardized tax structure. Effective Tax Collection: CGST provisions allow for penalties and fines in case of tax regulation violations. Businesses can also implement tax recovery mechanisms to prevent tax defaulters from continuing their business activities. Key Features of CGST It Applies to all taxable intrastate supplies of goods and services. Self-Assessment: Businesses are responsible for calculating and paying the CGST amount due on their taxable supplies. Reduced Tax Burden: This can lead to lower tax rates for certain goods and services compared to the pre-GST regime. Penalty & Fines: Violations of CGST regulations can result in penalties and fines. Tax Recovery: Provisions exist to recover unpaid CGST dues from businesses that default on their tax obligations. Understanding CGST vs IGST Under the GST system, CGST applies within a state, while IGST applies between states for goods and services transactions. CGST: Levied on intrastate supplies (within a state) IGST: Levied on interstate supplies (between states) Why are there Three GST Categories? - The Federal Structure India's federal structure allows both central and state governments to levy taxes. GST simplifies government taxes by dividing them into three categories. The central and state governments levy ST and SGST for intra-state transactions. Typically, businesses divide the tax burden equally between CGST and SGST. IGST (for interstate): The central government levies and collects IGST on interstate transactions. It combines the elements of CGST and SGST.

16-08-2024

Tax

Advance Tax Payments in India

Advance Tax Payments in India Understanding Advance Tax The Indian tax system allows taxpayers to pre-pay a portion of their estimated tax liability throughout the financial year through a system called advance tax. This "pay-as-you-earn" scheme helps distribute tax obligations more evenly and avoids a large year-end payment burden. Who Needs to Pay Advance Tax? · Individuals: If your total tax liability after adjusting Tax Deducted at Source (TDS) is expected to exceed Rs. 10,000 in a financial year, you're liable to pay advance tax. This applies to freelancers, professionals, salaried individuals (except for certain cases), and senior citizens (with some exceptions). · Businesses: Businesses opting for the presumptive tax regime under Section 44AD must pay their entire advance tax liability in one installment by March 15th. However, they also have the option to pay by March 31st. · Professionals under Presumptive Income: Similar to businesses under the presumptive scheme, professionals like architects, doctors, lawyers, and consultants covered under Section 44ADA can pay their entire advance tax in one go by March 15th or opt for full payment by March 31st. Exemptions from Advance Tax · Senior Citizens: Individuals over 60 who don't run a business are generally exempt from advance tax. · Minimal Tax Liability: If the TDS deducted throughout the year surpasses your total tax liability, you do not need to pay advance tax. · Salaried Individuals with Sufficient TDS: Salaried individuals whose tax liability is fully covered by TDS deducted at source are exempt from advance tax. However, any income from non-salary sources like interest, rent, or capital gains would still be subject to advance tax. Advance Tax Payment Schedule Category Due Dates Minimum Payment Percentage Businesses & Self-employed 15th June 30% Businesses & Self-employed 15th September 60% (cumulative) Businesses & Self-employed 15th December 75% (cumulative) Businesses & Self-employed 15th March 100% (full payment) Companies 15th June 15% Companies 15th September 45% (cumulative) Companies 15th December 75% (cumulative) Companies 15th March 100% (full payment) Calculating Your Advance Tax Liability Here's a step-by-step guide to estimate your advance tax liability: Estimate Your Annual Income: Consider all income sources like salary, capital gains, interest income, rent, professional income, etc. Gross Taxable Income: Add your salary income to your estimated income from other sources for the year. Remember, advance tax isn't paid on salary income. Tax Slab Application: The combined income might push you into a higher tax bracket, affecting your tax liability. Tax Calculation: Calculate the payable tax amount based on the latest income tax slabs. Adjust for TDS: Subtract the TDS deducted or expected to be deducted according to the applicable tax slabs for different income sources. Advance Tax Payment: If the remaining tax liability after TDS deduction exceeds Rs. 10,000, you're liable to pay advance tax. Making Advance Tax Payments Online The Income Tax Department of India offers a convenient online portal for advance tax payments: Visit the Income Tax e-filing portal (https://eportal.incometax.gov.in/). Click on "e-pay Tax" under "Quick Links." Enter your PAN details and mobile number, then click "Continue." Enter the received OTP and click "Proceed." Choose the "Income Tax" option and click "Continue." Select the assessment year and payment type as "Advance Tax (100)" and click "Continue." Fill in all required tax details. Choose your preferred payment mode and bank, then click "Continue." Review the challan details and click "Pay Now" to complete the payment. Upon successful payment, you'll receive an acknowledgement with a challan serial number and BSR code. Keep a copy of this receipt for your tax return filing.

16-08-2024

Tax

Tax Collected at Source (TCS)

Tax Collected at Source (TCS) What is TCS? Tax Collected at Source (TCS) allows the seller to collect a specific tax amount from the buyer at the time of sale and deposit this tax with the government. The Income Tax Act, 1961, governs the provisions for TCS. Who is Involved in TCS? · Seller (TCS Collector): Any entity responsible for collecting TCS, including the Central Government, State Government, companies, partnership firms, and individuals whose accounts are audited under the Income Tax Act. · Buyer: The individual or entity purchasing the specified goods. However, certain buyers, such as government entities and social clubs, are exempt from paying TCS. What Goods Attract TCS? The applicability of TCS depends on the type of goods purchased and their intended purpose: · Trading Purposes: TCS applies to various goods when purchased for trading, such as liquor, scrap, minerals, bullion/jewellery exceeding specific limits, motor vehicles exceeding Rs. 10 lakh, and certain forestry products. · Manufacturing, Processing, or Production: TCS is not applicable if the above-mentioned goods are used for manufacturing other products. TCS Rates: The TCS rate varies depending on the type of good: · Liquor (alcoholic): 1.00% · Scrap, minerals, and certain forestry products: 1.00% · Bullion/jewellery exceeding limits: 1.00% · Motor vehicles exceeding Rs. 10 lakh: 1.00% · Parking lots, toll plazas, mining, and quarrying: 2.00% · Timber procured through forest lease: 2.50% · Other timber and forest produce (except tendu leaves): 2.50% · Tendu leaves: 5.00% TCS Return Filing: TCS collected needs to be deposited with the government, and returns must be filed electronically (e-TCS) by the seller. Here are the due dates for filing TCS returns (Form 27EQ): · Quarter Ending | Due Date for TCS Return | Date for Generating Form 27D · June 30th | July 15th | July 30th · September 30th | October 15th | October 30th · December 31st | January 15th | January 30th · March 31st | May 15th | May 30th TCS Certificate (Form 27D): The seller must issue a certificate (Form 27D) to the buyer within a week of collecting TCS. This certificate details the tax deducted. Consequences of Non-Compliance: · Interest: If the seller fails to collect or deposit TCS on time, interest at 1% per month is levied. · Penalty: Inaccurate TCS return filing attracts a penalty of Rs. 10,000 to Rs. 1,00,000 under Section 271H. TCS Exemptions: · Goods purchased for personal consumption · Goods bought for manufacturing/processing/production (not for trading) Key Differences Between TCS and TDS (Tax Deducted at Source): Feature TCS TDS Who deducts the tax? Seller Payer (company, etc.) When is the tax deducted? At the time of sale At the time of payment Applies to Sale of specific goods Salary, interest, rent, professional fees, etc. Rate of deduction Varies depending on the good Varies depending on the income type Deducted regardless of amount? Yes No (only applicable above a certain threshold)

16-08-2024

Tax

Income Tax Return Filing Due Dates in India

Income Tax Return Filing Due Dates in India What are Income Tax Returns (ITRs)? Imagine a report detailing your income and tax payments for a specific financial year. That is exactly what Income Tax Returns (ITRs) are. Filing them requires individuals, businesses, and other entities to fulfil tax regulations. Timely filing ensures a smooth process and avoids unnecessary penalties. When is the ITR Filing Due Date for FY 2023-24 (AY 2024-25)? The deadline to file your ITR for the financial year 2023-24 (assessment year 2024-25) without incurring late fees is July 31st, 2024. Missing this deadline attracts interest and penalties under sections 234A and 234F of the Income Tax Act. ITR Filing Due Dates for Different Taxpayers: The due date for filing ITRs can vary depending on the taxpayer category: Salaried Individuals, Hindu Undivided Families (HUFs), Association of Persons (AOPs), and Business with No Audit Requirement: July 31st, 2024 Businesses Requiring Audit: September 30th, 2024 Businesses Requiring Transfer Pricing Reports: November 30th, 2024 Revised and Belated ITR Filings: Revised Return: If you need to correct your originally filed ITR, you can submit a revised return by December 31st, 2024. Belated/Late Return: If you miss the regular deadline, you can still file a late return, but it must be done by December 31st, 2024. However, be prepared for possible penalties. Understanding Financial Year (FY) and Assessment Year (AY): The income earned between April 1, 2023, and March 31, 2024, falls under the financial year (FY) 2023-24. The assessment year (AY) for this income is 2024-25 is when you file your ITR. Consequences of Missing the ITR Filing Due Date: Penalty: A penalty ranging from Rs. 1,000 to Rs. 5,000 may be charged. Loss of Set-off Benefits: You might lose the ability to carry forward certain losses for future tax adjustments. New Tax Regime Restriction: Filing a belated ITR might restrict you from opting for the new tax regime. Interest on Late Payment: Interest will be levied on any unpaid tax amount under Section 234A at 1% per month or part month. Important Points: Timely ITR filing is important for tax compliance and avoids penalties. The due date for ITR filing can vary depending on your taxpayer category. Revised and belated ITR options are available but come with potential consequences. Understand the distinction between the financial and assessment years for accurate filing.

16-08-2024

Tax

HSN Codes - GST

HSN Codes - GST The world of international trade depends on a regular system for classifying goods: the Harmonized System of Nomenclature (HSN). Developed by the World Customs Organization (WCO), HSN codes ensure a uniform way to categorize over 5,000 products across more than 200 countries. This system is important in India's Goods and Services Tax (GST) regime. What is HSN Codes? An HSN code is a six-digit numerical identifier assigned to a specific product. This code denotes the product's category based on a structured hierarchy: Chapters: Broad categories (e.g., Chapter 2 - Meat and edible offal) Headings: More specific groupings within chapters (e.g., Heading 02.01 - Meat of bovine animals, bone-in) Subheadings: Further refine product classification (e.g., Subheading 0201.10 - Carcasses and half-carcasses of bovine animals, bone-in) HSN codes are essential for various reasons: Uniform Classification: Ensures consistency in product categorization across borders. Customs Tariffs: Forms the basis for determining import and export duties. International Trade Statistics: Enables tracking of global trade flows for specific products. HSN Codes and GST in India India adopted the HSN system for its Central Excise and Customs regime long before GST implementation. However, GST introduced a slight modification: HSN Code Length: For GST purposes, Indian businesses might need to use an extended HSN code with additional digits depending on their annual turnover: o No HSN code is required for businesses with a turnover below ₹1.5 crore. o 2-digit HSN code for businesses with a turnover between ₹1.5 crore and ₹5 crore. o 4-digit HSN code mandatory for businesses with a turnover exceeding ₹5 crore. o 8-digit HSN code for importers and exporters (includes additional digits for customs purposes). Benefits of HSN Codes in GST: Standardization: Promotes uniformity in product classification across India, simplifying tax administration. GST Rate Determination: HSN codes help identify the applicable GST rate for a particular product. Automated GST Returns: HSN codes enable an automatic population of product details in GST return forms, saving time and effort. HSN Code vs. SAC Code While HSN codes classify goods, the Service Accounting Code (SAC) system classifies services under GST. Like HSN codes, SAC codes determine the applicable GST rate for a specific service. SAC codes typically have a four-digit structure. HSN codes are a fundamental building block of the GST regime. Understanding how HSN codes classify products and their role in determining GST rates is crucial for businesses of all sizes. By leveraging HSN codes accurately, businesses can ensure efficient GST compliance and avoid potential complications.

16-08-2024

Tax

Form 26AS: Annual Tax Credit Statement

Form 26AS: Annual Tax Credit Statement What is Form 26AS? Imagine a document that consolidates all your tax information for a specific year. That's precisely what Form 26AS is! It's an annual statement issued by the Income Tax Department that summarizes your tax credits, making it a crucial tool for filing accurate Income Tax Returns (ITRs). Accessing Your Form 26AS: There are two primary ways to access your Form 26AS: TRACES Website: Login to the Income Tax Department's official e-filing portal using your PAN (Permanent Account Number) and password. Navigate to "My Account" and select "View Form 26AS (Tax Credit)" to download the document. Net Banking (limited availability): Some banks offer the functionality to download your Form 26AS directly through their internet banking platform. Understanding the Contents: Form 26AS is divided into seven sections (Part A to Part G), each with specific details: Tax Deducted at Source (TDS): (Part A) This section provides a breakdown of taxes deducted from your income by various entities, such as employers, banks, and mutual fund houses. It includes the deductor's name, TAN (Tax Deduction and Collection Account Number), the amount deducted, and the deposit date. Part A1: TDS details related to Form 15G/H (declarations for no TDS on interest income). Part A2: TDS details on the sale of immovable property (land or real estate). Tax Collected at Source (TCS): (Part B) This section reflects taxes collected by sellers or dealers on your behalf and deposited with the government. For instance, TCS applies when you buy a car exceeding ₹10 lakh. Taxes Paid Other Than TDS/TCS: (Part C) This part details any advance or self-assessment taxes you've paid during the year. It includes information like the tax amount, date of deposit, challan serial number, and tax heads. Tax Refund Details: (Part D) This section shows any tax refunds you've received, including the assessment year, payment date, mode of payment, interest paid, and refund amount. High-Value Transactions: (Part E) Based on your Annual Information Report (AIR) filed by financial institutions, this section details high-value transactions you made during the year, such as mutual fund purchases, bond investments, or cash deposits. TDS on Sale of Immovable Property: (Part F) This part is relevant for property buyers and reflects TDS deducted on the sale of immovable property. Tax Defaults: (Part G) This section highlights any tax-related defaults, such as short payments, short deductions, or interest on late payments. Importance of Form 26AS for ITR Filing: By carefully checking your Form 26AS, you can ensure all tax information in your ITR is accurate. This will help avoid discrepancies and delays in processing your tax return.

16-08-2024

Tax

Tax Return Notice: A Guide

Tax Return Notice: A Guide Have you ever filed your income tax return and then received a cryptic message from the Income Tax Department (ITD)? Do not worry—you are not alone! This guide explains what an intimation under Section 143(1) of the Income Tax Act means and how to respond to it. What Happens After You E-File Your Return? Once you submit your income tax return electronically (e-filing), the ITD takes over. They process your return at the Centralized Processing Centre (CPC) to check for: Errors: This includes typos, miscalculations, or missing information. Differences: This refers to any differences between your reported income and the ITD records like your employer deducted TDS (Tax Deducted at Source). What is an Intimation Under Section 143(1)? If the ITD finds any errors or discrepancies during processing, it will send you an intimation under Section 143(1). This intimation will tell you the outcome of its initial review. What Does the Intimation Tell You? There are two main possibilities: Refund Due: If you paid more tax than you owe, the intimation will specify the amount you'll receive as a refund. Tax Due: If you owe more tax, the intimation will tell you the additional amount you must pay. Common Reasons for Intimations Mismatched Information: This could be anything from a typo in your income figures to a difference between your reported income and the TDS amount the ITD has on record. Missing Documents: The ITD might need additional documents to verify your income or deductions. Random Scrutiny: Sometimes, the ITD randomly selects returns for a more detailed examination. Responding to an Intimation You must pay within the specified timeframe if you receive a notice stating a tax is due. You can usually respond electronically through the ITD's e-filing website for intimations about refunds or mismatches. Here is a general process (it might be slightly diffrent depending on the issue): 1. Log in to your e-filing account. 2. Go to the "E-Proceedings" section and select "E-assessment." 3. Choose "Adjustment u/s 143(1)(a)." 4. Review the details of the intimation. 5. Respond to each mismatch by selecting the appropriate option from a drop-down menu. 6. If you have additional information to explain a discrepancy, provide it in the designated space. 7. Upload any supporting documents. 8. Submit your response. Always Remember: It's important to respond to an intimation promptly. If you disagree with the intimation, you can seek professional help from a tax consultant. Other Types of Income Tax Notices While intimation under Section 143(1) deals with initial processing, there are other notices you might receive from the ITD: Notice under Section 142(1): This requests additional documents to verify your return. Notice under Section 143(2): This indicates a more thorough examination of your return. Notice under Section 148: This informs you of a reassessment if additional income is found. Notice under Section 156: This is a demand notice for unpaid taxes, interest, or penalties. Notice under Section 139(9): This informs you of errors in your return that need correction. Notice under Section 245: This informs you of changes made to your outstanding tax liability by the department.

16-08-2024

Tax

Income Tax Payments in India: A Guide to Online Options

Income Tax Payments in India: A Guide to Online Options Understanding income tax and navigating its payment process can seem daunting. But worry not! The Indian Income Tax Department offers a convenient online payment system for hassle-free tax settlements. This guide simplifies the process for individuals, especially salaried taxpayers, who can leverage net banking for online payments. Who Needs to Pay Income Tax? Income tax applies to various entities in India, including: Individuals: Those with an annual income exceeding Rs. 2.5 lakhs (FY 2022-23) must pay income tax. Different tax slabs determine the applicable tax rate. Firms, Companies, and Other Entities: Businesses and organizations also fall under income tax regulations. Understanding Income Tax Slabs (Individuals below 60 years, FY 2022-23, AY 2023-24): Income Slab Tax Rate Up to Rs. 2,50,000 Nil Rs. 2,50,001 - Rs. 5,00,000 5% Rs. 5,00,001 - Rs. 7,50,000 Rs. 12,500 + 10% of income exceeding Rs. 5,00,000 Rs. 7,50,001 - Rs. 10,00,000 Rs. 37,500 + 15% of income exceeding Rs. 7,50,000 Rs. 10,00,001 - Rs. 12,50,000 Rs. 75,000 + 20% of income exceeding Rs. 10,00,000 Rs. 12,50,001 - Rs. 15,00,000 Rs. 1,25,000 + 25% of income exceeding Rs. 12,50,000 Above Rs. 15,00,000 Rs. 1,87,500 + 30% of income exceeding Rs. 15,00,000 Making Your Income Tax Payment Online: 1. Visit the Tax Information Network: Access the official Income Tax Department website (https://www.incometax.gov.in/iec/foportal/). 2. Choose the Right Challan: Locate the "CHALLAN NO./ITNS 280" option and proceed with online payment. This challan is specially for online tax payments. 3. Enter Personal Details: o Taxpayer Type: Select "(0021) Income Tax (Other than Companies)" o Payment Type: Choose the appropriate option based on your situation. Common options include: (100) Advance Tax (300) Self-Assessment Tax (for outstanding tax dues) o PAN and Assessment Year: Enter your Permanent Account Number (PAN) and the relevant Assessment Year (AY). For FY 2022-23, the AY is 2023-24. o Address and Captcha: Fill in your complete address and enter the captcha code displayed. Click "Proceed" to continue. 4. Review and Submit: Carefully check all the information you've entered. Once confirmed, submit the request to be directed to your bank's secure payment gateway. 5. Payment Confirmation: Upon successful payment, you'll receive a tax receipt (Challan 280) with transaction details. Take a screenshot or save a copy for your records. The challan number and BSR code will be required when filing your income tax return. Filing Income Tax Return After Payment: Once your online tax payment is complete, you must declare it in your income tax return. To start the process, visit the "file income tax return" section on the official Income Tax Department website. Advance Tax Payments: This applies to individuals with estimated tax liabilities exceeding Rs. 10,000. Salaried individuals usually do not require advance tax payments as their employers deduct tax at source (TDS). However, those with higher incomes or income from various sources (capital gains, interest, etc.) may need to utilize the online advance tax payment facility. Always Remember: Failing to pay advance tax attracts penalty interest. You may need to pay "self-assessment tax" online while filing your return if there's any outstanding tax due. Include interest payments on any tax dues.

14-08-2024