Q1. What is income tax?

Tax paid on income you earned during a year is called income tax. Income can be earned from the following sources which are also called income under different heads:-

• Salary
• Rent House property
• Business and Profession
• Capital gain – Profit on sale of assets
• Income from another source – Interest, lottery, winnings etc. which does not fall in the above category.

Q2. What is an income tax return?

Once you have calculated your income tax then you have to file the detail of the same to the government in form of a tax return i.e. Income tax return.

Q3. When do I have to file an income tax return?

For different types of individuals different due dates are mentioned:

• For individual / HUF and non-subject to audit – 7/31/2022
• For Firm/ Company subject to audit and their partners – 10/31/2022

Q4. Who has to file an income tax return?

Following are a few of the conditions for the person who has to file an income tax return:

• If income is liable for income tax.
• If there is any income from foreign assets.
• If foreign tour expenses in a year are more than 2 lakhs.
• If electricity bill in a year is more than 1 lakhs.
• If there is more than 1 crore in current accounts.
• If any TDS is deducted and you want a refund for the same.
• If their losses and you won’t carry forwards the same.

Q5. What are the different types of people for Income-tax?

Anyone eligible for a PAN number is a person as per Income tax.

• Individual – Resident or NRI
• Partnership firm
• Company
• LLP
• Body of Incorporation
• Trust
• HUF
• Local Authority
• Artificial juridical person

Q6. What if do not file an income tax return or do not pay income tax or hide income from tax authorities?

There are two parts of the penalty in case of late filing of income tax return

• When you have paid all due taxes but are only late in filing an income tax return to the government.
  • Total income below 5 Lakhs than 1000/-
  • Total income above 5 lakhs than 5000/- or 10,000/-
• When you have not paid due taxes on your income then the interest of 1% of the due tax amount per month or part of the month will be payable.
• If the income tax officer finds out that you have underreported (wrongly calculated any income or hidden any revenue) the income then a 50% penalty will be charged on the due tax amount.
• If the income tax officer finds out that you have misreported(false and inaccurate reporting by misrepresentation ) the income then a 200% penalty will be charged on the due tax amount.

Q7. How Income tax is calculated?

There is a long process of calculating income tax but the following are measure steps for doing the same:-

• First, calculate the different types of income which is called Income under different heads and deduct any deduction of specific heads.
• Calculate gross total income by adding them.
• Reduce deduction allowed for Gross total income like 80C, 80D etc.
• Calculate Net total income after deducting all the deductions.
• Calculate tax on NTI after considering if any specific tax rate on specific income e.g., long term capital gain i.e. 20%.
• Reduce the tax amount by adjusting any TDS, Advance tax or tax already paid, if any.
• That will be your net income tax payable.
• Pay the same and file the return with all the details.

Q8. What is the meaning of Income-tax slabs?

For the benefit of the general public government has given concessions to people by not charging taxes or charging lower taxes on income if income is below a specific amount. These specific amounts are called income tax slabs.

Q9. What are different income tax slabs?

There are currently two options in case of income tax slabs old regime and the new regime. A person can choose from any of the two regimes. Following are tax slabs for individuals under the old and new regimes:

Income	Individual & HUF
	Old regime			New Regime
	Age less than 60 years & NRI	Age > 60 years and < 80 years	Age > 80 years	For all
0 to 2.5 lakhs	Nil	Nil	Nil	Nil
2.5 lakhs to 3 lakhs	5%	Nil	Nil	5%
3 lakhs to 5 lakhs		5%	5%
5 lakhs to 7.5 lakhs	20%	20%	20%	10%
7.5 lakhs to 10 lakhs				15%
10 lakhs to 12.5 lakhs	30%	30%	30%	20%
12.5 lakhs to 15 lakhs				25%
more than 15 lakhs				30%

Note: 

• Deduction under 87a is available in both old and new regimes for income below 5 lakhs.
• Many allowances and deductions are not allowed in case a person opts for a new regime e.g. 80C,80D deduction, HRA, Interest on a home loan, LTA, etc.
• A Cess of 4% is chargeable on income tax in both regimes.
• The surcharge is chargeable on income tax if income exceeds the specified amount in both regimes.

Income is greater than	Surcharge
50 Lakhs	10%
1 Crore	15%
2 Crore	25%
5 Crore	37%

Q10. What is Form 16?

It is a TDS certificate issued by the employer. It contains tax of employees deducted and directly deposited to the government by the employer.

Q11. Where can I get Form 16?

There 2 sources from where you can get your forms:

• Income tax website.
• From employer.

Q12. When does the employer deduct TDS?

When income is taxable then the employer deducts the TDS and deposits the same to the Income-tax department.

Q13. What is Form 16 A?

It is a TDS certificate for TDS deducted on other than salary. It can be downloaded from the Income-tax website.

Q14. What is Form 16B?

It is a TDS certificate for the sale of property in case of the transaction value of the property exceeds 50 lakhs. It can be downloaded from the website.

Q15. What is a deduction in the case of ITR?

There are two types of deduction one is income-based second is expenditure or investment-based. Deduction under section 80, 24b, 10, etc.

Q16. What are deductions available for the assessee?

Section	Investment or expenditure type	Who are eligible	Amount limit for deduction	Investment period
80C	National Pension Scheme Atal Pension Yojana	Individual / HUF	150,000	Till the age of 60
	Equity Linked Saving Scheme			3 years
	Public Provident Fund			15 years
	Senior Citizen Savings Scheme			5 years
	National Savings Certificate (Interest accrued)			5 years
	Unit Linked Insurance Plan			5 years
	Fixed Deposit			5 years
	Repayment of home loan principal amount			NA
	Registration charges and stamp duty for a home/property			NA
	Infrastructure bonds			5 years
	NABARD Rural Bond			5 years
	Five-year Post Office Time Deposit Scheme			5 years
	Sukanya Samriddhi Yojana			21 years
80CCC	LIC or other insurance			3 years
80CCD	National Pension Scheme Atal Pension Yojana	Individual, HUF	Employee contribution up to 10% of salary or 1.5 lakhs (part of 80C) + 50000 in addition to 80C limit + Employee contribution up to 10 % of salary
80CCG	Rajiv Gandhi Equity Scheme	Individual, HUF	Lower of 25,000 or 50% of total investment
80D	Health Insurance premiums	Individual, HUF	if Self and dependent below 60 years – 25,000 (for self, spouse, kids) + 25000 (for parents) Limit increase to 50,000 + 50,000 if age is more than 60 years for self, family or parents if HUF member – 25000	NA
80DD	Expenses on Handicapped Dependent	Individual	For disability between 40% to 80% – 75,000/- For disability more than 80% – 1,25,000/-	NA
80DDB	Treatment of specified illness	Individual	40,000/- 1,00,000/- for senior citizens	NA
80E	Interest on education loan	Individual	Interest paid for 8 years	NA
80EE	Interest in first-time homeowner	Individual	50,000	NA
80G	Donations to approved charitable institutes		50% to 100% of the donation and 2000/- in case of cash donation	NA
80GG	Rent paid when HRA is not available	Individual / HUF	Lower of 5000/ Month 25% of total income Rent paid less than 10% of total income	NA
80GGA	Donations for Scientific Research and Rural Development	Individual, HUF, Company, Firm	100% of donations made	NA
80GGB	Donations Made to Political Parties or an electoral trust.	Companies, firm	100% of donations made	NA
80GGC	Donations Made to Political Parties or an electoral trust.	Individual	100% of donations made	NA
80HH	Profit from newly established industrial undertaking or hotel in backward area	All	20% of Profit from business
80HHA	Profit from newly established small scale industry backward area	All	20% of Profit from business
80HHBA	Profit from Housing projects	All	50% of the profit from the project
80JJAA	Employment of new workman	All	30% additional deduction of hire of new employee
80O	Royalty from foreign enterprises	All	No Limit
80P	Income of cooperative society	Cooperative societies	100% if engaged in specific activities	NA
80QQB	Royalty income by the author of certain books	Individual	Up to 3,00,000	NA
80TTA	Savings Account interest	Individual	INR 10,000/-	NA
80TTB	Interest from Bank and post office	Senior citizen	up to 50,000/-	NA
80U	Handicapped tax-payers	Individual	75,000 for 40% to 80% disability 1,25,000 for higher than 80% disability	NA
80RRB	Royalty or patent income by the original patent holder	Resident Individual	Up to ₹3 lakhs	NA
24(b)	Deduction of interest paid on home loan	Homeowner	Up to 2 lakhs	NA
10 (13A)	HRA Received	Salaried Individual	HRA Received 40%(non Metro) – 50%(Metro) of salary Rent paid – 10% of salary	NA
10 (10D)	Amount received from Insurance company	Individual / HUF	Complete amount (premium should not be more than 20% of LIC)	NA

Q17. What is Surcharge?

For charging extra tax on high earning person or company there is an additional charge on tax which is from 2% to 12%. This is calculated on the tax amount, not the total income.

Q18. How I can save on tax?

There are 3 major things to consider if you are planning to save on tax:

• Consult with professionals – There are many complications in tax policy and different rules for every type of person and situation so it is better to consult with professionals regarding tax planning.
• Pre-plan – Sometimes tax planning requires making any investment or expenditure at a specific time so that tax benefits can be availed so rather than planning and consulting at the end of the year pre-plan the same for the year.
• Execute on time – Once you make the plan execute the same on time and make changes according to a new policy or any unpredicted earnings.

Q19. What is advance tax?

We file ITR after 4 – 6 months of ending any year and deposit tax while filling the return. But you start earning one the first month of the year so Government has established a system as per you pay taxes as you earn.

• Estimate your earnings for the year
• Pay tax quarterly on calculated income
• Adjust next quarter tax according to changes if any
• and pay 100% of tax before 31s march of the year

Q20. When do I have to pay advance tax?

Due date	Corporate taxpayer	For presumptive taxpayer
15-Jun	15% of tax liability	0
15-Sep	45% of tax liability	0
15-Dec	75% of tax liability	0
15-Mar	100% of tax liability	100% of tax liability

Q21. What are the conditions for advance tax?

If your estimated tax liability is more than 10,000/- then you have to pay advance tax.

Q22. What is the exception of not paying advance tax or cases in which penalty or interest is not charged on advance tax?

If not paying advance tax or discrepancy in tax paid and actual tax payable is due to the following reasons then there is no interest or penalty.

• Capital gain
• Speculative income e.g. lottery
• 90% tax paid of actual liability
• A senior citizen who does not have income from business and profession

Q23. What is the penalty for not paying advance tax?

If you do not pay advance tax then 1% interest per month or part of the month will be charged from the day of discrepancy till payment is made.