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This page contains Income tax slabs | Rebate | Education cess | Surcharge | Deduction under Section 80TTA/80TTB | IT Return rules | IT notices

Income tax slabs


Assessment yearFor below 60 years of ageAge 60 years or more but less than 80 yearsAge 80 years and more
Income levelTax rate Income levelTax rateIncome levelTax rate
2015-16Up to Rs 250000 NilUp to Rs 300000 NilUp to Rs 500000Nil
Rs 250001 to Rs 500000 10% Rs 300001 to Rs 500000 10%Rs 500001 to Rs 1000000 20%
Rs 500001 to Rs 100000025000+20%Rs 500000 to Rs 1000000 20000+20%Above Rs 1000000100000+30%
Above Rs 1000000 125000+30% Above Rs 1000000 120000+30%
2016-17 Up to Rs 250000Nil Up to Rs 300000NilUp to Rs 500000Nil
Rs 250001 to Rs 500000 10% Rs 300001 to 50000010%Rs 500000 to Rs 100000020%
Rs 500001 to Rs 100000025000+ 20% Rs 500001 to Rs 100000020000+20%Above Rs 1000000100000 + 30%
Above Rs 1000000125000 + 30% Above Rs 1000000120000+30%
2017-18Up to Rs 250000 NilUp to Rs 300000 NilUp to Rs 500000Nil
Rs 250001 to Rs 500000 10% Rs 300001 to Rs 500000 10%Rs 500001 to Rs 1000000 20%
Rs 500001 to Rs 100000025000+20%Rs 500000 to Rs 1000000 20000+20%Above Rs 1000000100000+30%
Above Rs 1000000 125000+30% Above Rs 1000000 120000+30%
2018-19 Up to Rs 250000Nil Up to Rs 300000NilUp to Rs 500000Nil
Rs 250001 to Rs 500000 5% Rs 300001 to 5000005%Rs 500000 to Rs 100000020%
Rs 500001 to Rs 100000012500+ 20% Rs 500001 to Rs 100000010000+20%Above Rs 1000000100000 + 30%
Above Rs 1000000112500 + 30% Above Rs 1000000110000+30%
2019-20 Up to Rs 250000Nil Up to Rs 300000NilUp to Rs 500000Nil
Rs 250001 to Rs 500000 5% Rs 300001 to 5000005%Rs 500000 to Rs 100000020%
Rs 500001 to Rs 100000012500+ 20% Rs 500001 to Rs 100000010000+20%Above Rs 1000000100000 + 30%
Above Rs 1000000112500 + 30% Above Rs 1000000110000+30%

Note: From Assessment year 2019-20,for salaried persons/pensioners. a standard deduction of Rs 40000 is allowed (withdrawing the current tax-free medical expense reimbursement of Rs 15,000 per annum and transport allowance exemption of Rs 1,600 per month.)
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Rebate u/s 87A of IT Act

S NoAssessment yearRebate availableRebate available for income of
12015-16Rs 2000 or tax before education cess is added whichever is lessNot more than Rs 500000
22016-17Rs 2000 or tax before education cess is added whichever is lessNot more than Rs 500000
32017-18Rs 5000 or tax before education cess is added whichever is lessNot more than Rs 500000
42018-19Rs 2500 or tax before education cess is added whichever is lessNot more than Rs 350000
52019-20Rs 2500 or tax before education cess is added whichever is lessNot more than Rs 350000

Education Cess Rate( now known as Health and Education cess)

The rate at which education cess is calculated is actually a combination of the two types of cess applied on the taxable income. For the education cess the rate is 2% of the tax payable and for the Secondary and Higher Education Cess the rate is 1% of the tax payable. Together they form the education cess rate of 3% of the tax payable. This Education cess of 3% is added to the tax plus surcharge (if applicable )after rebate u/s 87A of IT Act is deducted from the tax.From assessment year 2019-20,this tax rate is increased from 3% to 4% and is named as Health and Education cess
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Surcharge

S NoAssessment yearSurcharge rate
12015-16 Rates of Surcharge vary for different categories of taxpayers. The Surcharge on Income tax is at the rate of 10% where total income exceeds one crore rupees ,for all taxpayers except Domestic Company (5%) and Foreign Company (2%) up to the Assessment year 2015-16.
22016-17 12% of the Income Tax, where taxable income is more than Rs. 1 crore. (Marginal Relief in Surcharge, if applicable i.e. the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. 1 crore by more than the amount of increase in taxable income.)
32017-18
  • i)The amount of income-tax shall be increased by a surcharge at the rate of 15% of such tax, where total income exceeds one crore rupees.
  • ii)However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
42018-19
  • i) The amount of income-tax shall be increased by a surcharge at the rate of 10% of such tax, where total income exceeds fifty lakh rupees but does not exceed one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds fifty lakh rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees).
  • ii) The amount of income-tax shall be increased by a surcharge at the rate of 15% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
52019-20
  • i) The amount of income-tax shall be increased by a surcharge at the rate of 10% of such tax, where total income exceeds fifty lakh rupees but does not exceed one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds fifty lakh rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees).
  • ii) The amount of income-tax shall be increased by a surcharge at the rate of 15% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
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Deduction under Section 80TTA/Section 80TTB

Did you know that the interest you receive on your savings account is actually taxable? However, since the government is always trying to encourage its citizens to make small savings, there are tax benefits on the basic savings account as well. Let us take a detailed look at the provisions under the Income Tax Act that allow you to claim tax exemption on savings account interest. Section 80TTA is titled as ‘Deduction in respect of interest on deposits in savings account’ in the Income Tax Act.

Here are the salient features of this section:

You can claim exemption on up to Rs. 10,000 received as interest on your savings account deposits.

The savings account can be held in any of the following financial institution:

Bank

Cooperative society

Post office

You can claim exemption on any number Interest Changes in Banking: Earlier, the Reserve Bank of India (RBI) had set the savings account interest rate at 4%. Also, the interest was given by banks based on the minimum balance in a quarter. However, now the RBI allows banks to fix higher interest rates if they wish to, and many banks are offering 6% interest on savings accounts. Banks now calculate interest based on the daily balance and not on the minimum balance. This means that you are likely to be getting higher interest amounts per quarter than earlier. Checking your bank statement every month will help you keep a tab on this. If your savings accounts are generating interest amounts higher than Rs. 10,000 in a financial year, you will be able to claim deduction only up to Rs. 10,000. The remaining interest amount you received will be added to your total income and income tax charged on it.

From Assessment year 2019-20,a new section 80TTB is added.This section provides for senior citizens exemption of interest on FDs,recurring deposits and saving account in banks and post offices(max Rs 50000).

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Rules you must follow while filing income tax returns

1) Who needs to file tax returns?

If the gross taxable income after exemptions, but before deductions, exceeds the basic limit, or if a tax refund has to be claimed, you need to file your tax return.

2) Income tax form 12BB

Investment declaration has to be done in the beginning of a financial year. Your employer asks you to declare your tax-saving investments for the year to be able to deduct tax accordingly from your monthly salary. Investment declaration is important for you because it can lead to higher in-hand salary. Form 12BB applies to all salaried taxpayers. Using Form 12BB, an employee has to declare the investments that they have made during the year. Documentary evidence of these investments and expenses have to be provided at the end of the financial year as well.In the beginning of the financial year, you have to just make an estimate of the investments that you intend to make. You don’t need to submit actual proofs till the end of the financial year. You can actually invest less or more. The eventual investments don’t have to be exactly as declared. The Form 12BB is a statement of claims by an employee for deduction of tax. With effect from 1st June 2016, a salaried employee is required to submit the Form 12BB to his or her employee to claim tax benefits or rebate on investments and expenses. Form 12BB has to be submitted at the end of the financial year. (view/download 12BB form)

3) Verify TDS details in form 26AS

Once it is clear that you have to file returns, the next step is to verify whether the tax deducted on your behalf has been credited to your PAN. While the tax deducted by your employer will reflect in the Form 16, check out your Form 26AS online to make sure that all other taxes (advance tax, TDS on interest and other incomes) have also been credited to your PAN. If there is a discrepancy, notify the deductor and get it rectified. The tax authorities consider this document as the sole proof of taxes paid by you. Once the return is filed, the tax department’s system reconciles the details in the return with the amounts appearing in the taxpayer’s Form 26AS.

The tax details in the return must match the TDS details in the Form 26AS. A mismatch will surely lead to a notice

4) Choose the right form for filing return

One big confusion among taxpayers is which form they must use to file their return. Most tend to use the ITR 1 because it is simple to fill. The rules relating to forms have changed this year. Here is a gueide to the forms that individuals have to use:

Form no 16:This gives your total income and also TDS deducted by the employer and deposited with incometax department.To view/download this form(if the employer is MCGM), go to https://renovisionmcgm.in and fill in the details such as employee code no and employee PAN no and login.In the window opened,click on proceed for Form no 16.Otherwise You can get your Form 16 from your employer. Even if you have left your job, your employer will provide you a Form 16. Unfortunately, this income tax form 16, cannot be downloaded from anywhere.

Form no 26AS:This gives the quarterly statement of TDS deducted from the salary/pension.To view/download it go to incometax site of incometaxindiaefiling.gov.in and login using user id and password and fill in date of birth and captcha code.In the window opened click on My Account on top and select View Form 26AS(Tax credit).

ITR 1 or SAHAJ

Use it if you have...

Income from salary or pension Income from one house property Income from other sources (interest, dividends, etc)

Don’t use if...

You are carrying forward losses Your total income exceeds Rs 50 lakh You hold foreign assets Agricultural income exceeds Rs 5,000 You have taxable capital gains You have income from business or profession You earn income from more than one house property

ITR 2

Use it if you have...

Income from salary or pension. Income from house property. Income from capital gains .Income from other sources. Income as a partner in firm .Foreign assets and income. Agricultural income of over Rs 5,000

Don’t use if...

You have income from business or profession

ITR 3

Use it if you...

Are an individual or HUF with income from proprietary business or profession. Have income from house property, salary, pension and other sources

Don’t use if...

You have opted for presumptive taxation

5) Mention cash deposits of more than Rs 2 lakhs after demonetisation.

6) Include interest and other income in return.

7) Mention your Aadhar in the tax return.

8) File the return before deadline and verify return.

File the return before the 31 July deadline. Till last year, there was no penalty for filing delayed returns. One could even file returns of the previous two years without a hitch if all his taxes were paid. But the rules have now been changed.

Section 139(1):Mandatory return before the due date.Section 139(4):Belated or late Income tax return.Section 139(5):Revised IT return.Section 139(9):Defective Returns

Insertion of new section 234F.

After section 234E of the Income-tax Act, the following section shall be inserted with effect from the 1st day of April, 2018, namely:—

"234F. Fees for default in furnishing return of income.—

(1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income under section 139, fails to do so within the time prescribed in sub-section (1) of said section, he shall pay, by way of fee, a sum of,—

(a) five thousand rupees, if the return is furnished on or before the 31st day of December of the assessment year;

(b) ten thousand rupees in any other case:

Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.

(2) The provisions of this section shall apply in respect of return of income required to be furnished for the assessment year commencing on or after the 1st day of April, 2018."

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Income tax notices

Don't panic when you receive a notice from income tax department. Instead, find out why exactly a notice has been sent to you and what the implications are according to the sections mentioned in the notice.

Listed below are some of the sections of the Income Tax Act under which you can get a tax notice:

Section noWhen /why you get noticeTime limit to serve noticeTime limit to respondWhat to do
139 (9)You will get a notice under Section 139 (9) of the IT Act in case - you have used wrong ITR form; you haven't paid the entire tax due; you have claimed a refund for deducted tax but have not mentioned the relevant income; there is a mismatch in the name on the form and PAN card, or if you have paid taxes but not listed income.NA Within 15 days of date of intimation by assessing officer. You can write to the local assessing officer for an extension but if you don't respond, your return will be considered invalid.

Go to the income tax filing site https://incometaxindiaefiling or gov.in/e-Filing/ and download the right ITR form under the given assessment year. Then from the options listed, select 'In response to a notice under Section 139(9) where the original return filed was a defective return.' Fill in the reference and acknowledgement number, and fill the form with rectifications. Under 'e-file', select 'e-file in response to notice u/s 139(9)' and upload it using the password in the notice.
245You will get this notice or intimation letter if you have claimed a refund in some assessment year, but there is also some outstanding tax to be paid by you. In such a case the AO can adjust the pending tax amount from the due refund. NA In the specified duration as per the notice by the assessing officer. On receiving this intimation, you should first refer to the past records and verify if the demand is correct. Calculate the actual tax payable and paid. Open the income tax website and select the 'Response to Outstanding Tax Demand' option submit your response if you believe 'demand is correct' or 'demand is partially incorrect' or if you 'disagree with the demand'.
143 (1)The tax notice sent under Section 143 (1) is basically an intimation letter, which tells you whether you have paid the correct amount of tax, more than the required amount or less than the due sum. There can be three types of notices under this section:

1. Intimation: You are being informed that after the final assessment your return calculation matches the AO's computation.

2. Refund: The AO's calculation shows excessive tax paid by you.

3. Demand: The AO's calculation shows a shortfall in the tax paid by you and the notice will demand that the tax be paid within 30 days.

Before the expiry of one year from the end of financial year in which the return has been made.

If tax is due, you will have to pay it within 30 days. If there is no discrepancy in the returns, you don't have to do anything. If a refund is due, it will be transferred to the bank account mentioned in the return. If it is not, request a reissue of the refund. If tax is due, you will have to pay it within 30 days.
143 (1A)Under this section, a computer-assisted notice is sent to the taxpayer if there is any discrepancy in the income mentioned in the return and Form 16, or deductions given under Section 80C or Chapter VIA and Form 26AS. NA 30 days from the date of issue of the communication. You will have to log in to the tax filing portal and, under the 'e-Proceeding' section, explain the discrepancy along with the supporting documentary proof that will have to be uploaded.
142 (1)Notice u/s 142(1) is usually served to call upon documents and details from the tax payers, and to take a particular case under assessment. This notice can be sent to assessee before or after assessment of his tax return. By serving a notice u/s 142(1) your AO may ask you to:

1. furnish a return of income in respect of which you are assessable, where you have not filed your return of income within the normal time allowed (which may include return in respect to your own income or income of other person for which you are liable to be assessable), for e.g., in case of a legal guardian/ deceased person;

2. produce accounts or documents which he may require for the purpose of making an assessment;

3. furnish in writing any information on matters including your statements, for example, statement of your assets and liabilities on a particular date;

Compliance with this notice u/s 142(1) is mandatory.

After the end of relevant assessment yearAs per period mentioned in the notice If the assessee has filed the return, then the required documents are to be produced. In case of non filing, the return needs to be filed within the time given in the notice and produce the proof of the same along with the required documents.

If you fail to comply with the provisions of this section:

1. It may result in ‘Best Judgment Assessment’ of your case u/s 144 or;

2. imposition of penalty u/s 271(1)(b) i.e. Rs10,000 for each failure or;

3. prosecution u/s 276D which may extend up to 1 year with or without fine.

143 (2)This is a follow-up to the notice under Section 142 (1). The assessing officer is either not satisfied with your response or he has not received the documents sought. Your return will now be subject to detailed scrutiny. Before the expiry of six months from the end of the financial year in which the return is filed. The taxpayer will have to appear in person or through a representative before the officer on the date specified in the notice. Get all the income and expense-related documents and other relevant papers, and do not miss the hearing.
148The notice under Section 148 is issued if the assessing officer thinks that some income might have escaped assessment. So you could be asked to file returns for the relevant assessment year or for reassessment. If the income that has escaped assessment is Rs 1 lakh or less, it can be sent within four years of the end of the relevant assessment year. If it is more than Rs 1 lakh, the notice can be sent within six years. The return will have to be furnished within 30 days or in the specified duration as per the notice by the assessing officer.
234 (F) This is a new section that has been introduced in the Income Tax Act, according to which a fee or penalty will be levied in case returns are not filed by July 31 of the relevant assessment year. Till date, a penalty of Rs 5,000 was levied at the discretion of the assessment officer if the return was not filed. Starting with assessment year 2018-19, a fee of Rs 5,000 will be charged in case returns are filed after the due date, but before December 31 of the relevant assessment year, or Rs 10,000 if it is filed after December 31 of the relevant assessment year.However, for those earning less than Rs 5 lakh a year, maximum penalty of Rs 1,000 will be levied.

However, the current provisions of section 234A will still be applicable along with the newly introduced fees. According to Section 234A, simple interest is levied at the rate of 1% per month or part of it on any tax amount if not paid within due dates. This interest will be payable for the period starting from due date of filing return till the date the return is filed. In case the return has not been filed at all then interest will be calculated from the due date till the date of completion of assessment order passed by the assessing officer.

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