When you liable to file ITR for any assessment year
When you liable to file ITR for any assessment year
Computation of Total Income and
Tax liability of an individual
Computation of total income need to
assess income tax under Income Tax Act 1961.
Computation of Total income we need all income earned during the previous year by a person which is taxable under Income Tax Act 1961.
Step.1 Compute total income of an individual from head of income (Section -14)
- Income from Salaries.
- Income from house property.
- Profit and gain of business or profession.
- Capital gains.
- Income from other sources.
Income from salaries (Section 15 to 17)
Income from salaries.
Less: Deductions allowable under the head salaries.
Income from House property (Section 22 to 27)
Income from house property.
Less: deductions allowable under the head of house property.
Income from Profit and Gains of Business or profession (Section 28 to 44AD)
Income Business or Profession.
Less: Deduction’s allowable under the head Business or Profession.
Income from Capital Gains (Section 45 to 57)
Income from capital gains.
Less: Deductions allowable under the head capital gain.
Income other sources (Section 58 to 59)
Income from other sources.
Less: Deductions allowable under the head Income from Other Sources.
Step-2 Add Income of other person included in assesses total Income
Step-3
A – less allowable Set off and carry forward of loss of relevant assessment year.
B- Less allowable set off and carry forward of past years loss.
Step-4 Income computed according above three step is known as gross total income
Step-5 Less deductions allowable under chapter VI A (Section 80 C to 80 U)
Main deductions commonly claim
Life insurance premium
Tuition fee
House loan Repayment (Principal amount)
Mutual Find investment
Fixed Deposit
Contribution to Provident Fund
Contribution to Public Provident Fund
Contribution to certain pension funds
Health Insurance
Donation
Note: Deduction under chapter VI A is allowable under old Tax Regime only
Step: 6 Compute Income Tax on such total income after step 5 at prescribed rate of income tax according to respective assessment year
Now there are two Income Tax Regime
| Income Rs. | Old Income Tax Regime Deduction under Chapter VI A is available | New Income Tax Regime Deduction under Chapter VIA is not available |
| Up to 2,50,000 | Nil | Nil |
| 2,50,001 to 5,00,000 | 5% | 5% |
| 5,00,001 to 7,50,000 | 20% | 10% |
| 7,50,001 to 10,00,000 | 20% | 15% |
| 10,00,001 to 12,50,000 | 30% | 20% |
| 12,50,0001 to 15,00,000 | 30% | 25% |
| 15,00,001 | 30% | 30% |
Who need to file Income Tax Return ?
According to section 139(1) requires that every person
(a) being a company or a firm, or
(b) being a person other than a company or a firm, if (i0 his income or (ii0 the total income of any other person in respect of which he is assesseable under the income act during the previous year, exceeded the maximum amount which is not chargeable to income tax shall furnish a return of his income otr the income of such other person.
Income tax return must be furnish on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.
Example:
Mr. A earned income Rs. 6,00,00 and Mr. B 5,00,000 both are laible to file his income tax
Bsaic examption limit is Rs.2,50,000
Mean if total income exceed Rs.2,50,000 during during the relevant previous than need to file income tax return.
Now a assessee can file his income tax return during the relevant assessment year only.
If any assessee fail to file his return of his income during the relevant assessment after that want to income tax return should meet with his area income tax officer. If income tax officer allow than such person can file his pending income tax return .
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