As the financial year 2023–24 draws to a close, the tax season is officially here, with the process for filing an income tax return (ITR) for the fiscal year 2023–24 and assessment year 2024–25 being begun.

As the Income Tax (IT) Department has opened its portal for individuals to submit their forms, it’s time for taxpayers in India to turn their attention to the crucial task of filing their Income Tax Returns (ITR) before the last date of filing—July 31st, 2024 (Wednesday).

It’s important to know that timely filing your ITR is not just a legal obligation but also a responsible act that contributes to the nation’s development. By fulfilling your tax duties, you ensure that the government has the necessary resources to fund essential public services and drive economic growth.

Moreover, timely ITR filing enables you to claim tax refunds if you’ve paid excess taxes, serves as valuable proof of income for securing loans or visas, and allows you to participate in government tenders.

As the process becomes more digitalized and streamlined today, to help you navigate the ITR filing process for FY 2023-24, check the latest updates, tax slabs, rules, and key deductions and exemptions to ensure a smooth and hassle-free filing experience.

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What are Income Tax Returns?

Income Tax Returns ITR Filing FY 2023-24 Around 23,000 taxpayers have already filed income tax returns in the first three days of Assessment Year 2024-25. Here are some common mistakes to avoid (File Image)

In India, the Income Tax Department, under the Central Board of Direct Taxes (CBDT), is responsible for collecting income tax. This tax applies to the income earned by individuals and businesses during a financial year. The Income Tax Act categorizes taxpayers into two main groups:

  • Individuals: This includes anyone earning income in India, such as salaried employees, business owners, freelancers, and professionals.
  • Businesses: This category includes companies, partnerships, Hindu Undivided Families (HUFs), and other business entities.

Income Tax Returns: Latest updates

It’s important to note that this information is based on available details and may change. For the most accurate information, consult the official government website or a tax professional.

  • New Tax Regime as Default: The new tax regime introduced in 2020 is now the default option for all taxpayers filing for AY 2024-25. However, you can still choose the old tax regime if it benefits you more.
  • Tax Slab Changes: As of now, there haven’t been any announcements regarding adjustments to income tax slabs for AY 2024-25. It’s advisable to stay informed closer to the filing deadline in case of any revisions.
  • Digital Transactions Encouraged: The government is likely to continue promoting digital transactions through tax benefits and new initiatives. Keep an eye out for announcements related to existing benefits or new programs supporting digital payments.

Income Tax Returns: Tax slabs

Tax slabs categorize your taxable income into different brackets, and each bracket has a corresponding tax rate. The higher your income, the higher the tax rate you pay on a portion of that income. Here’s a simplified breakdown of the tax slabs and rates for individuals under the new and old tax regimes:

New Tax Regime (AY 2024-25):

Income Slab (Rs.) Tax Rate (%)
Up to 2,50,000 Nil
2,50,001 – 5,00,000 5
5,00,001 – 7,50,000 10
7,50,001 – 10,00,000 15
10,00,001 – 12,50,000 20
12,50,000 onwards 30

Old Tax Regime (AY 2024-25):

For Individuals below 60 years of age:

Income Slab (Rs.) Tax Rate (%)
Up to 2,50,000 Nil
2,50,001 – 5,00,000 5
5,00,001 – 7,50,000 20
7,50,001 – 10,00,000 30
10,00,001 onwards

For Senior Citizens (60 years and above but below 80 years of age):

Income Slab (Rs.) Tax Rate (%)
Up to 3,00,000 Nil
3,00,001 – 5,00,000 5
5,00,001 – 7,50,000 20
7,50,000 onwards

For Super Senior Citizens (80 years of age and above):

Income Slab (Rs.) Tax Rate (%)
Up to 5,00,000 Nil
5,00,001 onwards

An additional tax is levied on income exceeding a certain limit. The upcoming budget might announce the applicable surcharge rate for AY 2024-25.

Income Tax Returns: Selection of tax regime

Since the new tax regime is now the default for tax filing in AY 2024-25, you have the option to switch to the old regime if it works out better for you tax-wise.
Deductions vs Tax Rates: The new regime offers lower tax rates but eliminates many deductions you can claim under the old regime (like those under Chapter VI-A for investments, medical expenses, etc.). Carefully analyze your income and the deductions you typically claim to see which regime gives you a lower tax bill.
Exemptions: The new regime may not allow certain exemptions available under the old regime, such as House Rent Allowance (HRA), Leave Travel Concession (LTC), and interest on education loans.

Income Tax Returns: Rules

Here are some key Income Tax rules to remember:

  • Filing ITR: You’re required to file an Income Tax Return (ITR) if your taxable income is higher than the basic exemption limit, which may change for the assessment year (AY) 2024-25.
  • Tax Deducted at Source (TDS): When you receive income from sources like salary or interest, your employer or the source may deduct tax at source (TDS) upfront. This deducted amount is credited towards your final tax liability, reducing the amount you owe.
  • Advance Tax: If your tax liability is expected to be above a certain limit, you’ll need to pay advance tax in installments throughout the financial year.
    Interest and Penalties: Be aware that there are penalties and interest charges associated with late filing of your ITR or late payment of taxes.

Income Tax Returns: Deadline

The last date to file your ITR returns for the financial year of 2024-25 is July 31, 2024.