The Income-tax department of India introduces some changes in the Income-tax filing process every year. The taxpayers need to be aware of these changes. It is better to have awareness and make no mistakes in the tax filing process or the tax forms.
The Income tax is levied on the income earned in India, by all the individuals, partnership firms, and corporates as per the Income-tax Act of India. In the case of individuals, if their income is above the minimum threshold limit. The tax is levied as per the slab system given by the Income Tax Department of India.
Income Tax Slab
In India, a slab system governs the tax levied on an individual taxpayer. A slab system means different tax rates for different income ranges. Tax slabs generally increase the tax rates as the income increases; this system ensures fair taxation in the country. These income tax slabs go through certain changes every financial year.
Whether you are filing a tax return for the first time or if you’ve been in the game for long. It is advisable to keep an eye on these factors while filing your tax return for FY 2020-21.
Income Tax Slab Rates for the Financial year 2020-21 (AY 2021-22)
In this new regime, taxpayers have options to pay their income taxes as per the new regime or to continue with the old regime. The new regime offers to tax at a lower slab rate but the taxpayer has to forgo various deductions and exemptions available under the old regime. Or, The assessee can continue with the rebates and exemptions by staying in the old regime and paying tax at the existing higher rate.
It is advisable that the taxpayers must choose their regime at the beginning of the year. However, if you were not able to make the planned investments or expenses against which you could claim the tax deduction under the old regime. You can switch to the new one if it is resulting in lower liabilities for you.
Extension of date
The last date for filing ITR (Income Tax Return) is extended to 30 September. However, it doesn’t provide any relief from the tax liabilities. If you have an advance tax due, you may need to pay the penal interest. Hence, it makes sense to file the ITR as soon as possible. This will also help in the faster processing of your tax refunds.
Changes in tax forms
The tax department notifies about the income tax forms every year after incorporating any changes. Therefore, It is necessary to be aware of these changes in order to choose the right ITR form.
This year, there are certain changes introduced within the eligibility criteria of ITR 1, which is generally used by salaried taxpayers.. For this year, A person can not file ITR 1, if their TDS (Tax Deducted at Source) has been deducted for cash withdrawal under Section 194N. Or if the person has deferred tax on employee stock options (ESOPs) received from the employer.
In case you forgot to submit the proof of investments like life insurance, or health insurance premium with your employer and the tax has already been deducted. You can still claim these deductions at the time of filing ITR and claim a refund of the tax paid.
To ease the process, it will be better to collect all the documents like Form 16, Form 26AS and bank statements before filing your Income Tax Return.
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