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Today is the last day to file your income tax returns for AY 2024-25, without having to pay a penalty. Starting tomorrow, you will be able to file your ITR, but you'd have to forego several benefits, like not being able to choose the old tax regime, or paying a penalty of Rs 1,000 (if your annual taxable income is less than Rs 5,00,000). <br /><br />As per official data, about 6 crore ITRs have already been filed so far, and around 70% of them have opted for the new tax regime. But if you have left your ITR filing to the last minute, and will rush to meet the deadline today, here's a handy list of mistakes you should avoid while filing your ITR: <br /><br />1. Do not miss out on reporting on your income from other sources. Generally, we only account for our salary, income from business/profession and capital gains (if any) while calculating our tax liability. However, there is one crucial segment we tend to forget-income from other sources. This includes interest income from your savings account, fixed deposits, recurring deposits and bonds.<br /><br />2. Income from other sources also includes any dividend income you've received throughout the year through stocks, mutual funds, and any monetary gifts with value of over Rs 50,000 you've received from friends, acquaintances, or anyone but your relatives. Don't forget to account for those as well. <br /><br /><div type="Article" hostid="261" msid="111406215" title="Wondering which ITR form is right for you? Know all about it here" mstype="2" mssubtype="0"></div><br />3. In case your total annual income exceeds Rs 50,00,000, you have to disclose all details of your properties, both movable and immovable under Schedule AL. This should also include any liabilities you have incurred on these assets. <br /><br />4. If you are an NRI, or an Indian holding foreign assets, you will have to share details of all your foreign income, assets, accounts and stocks under Schedule FA, along with your ITR. This needs to be done, irrespective of whether your income is taxable in India or not. <br /><br />5. If you are filing your ITR as per your AIS (Annual Information Statement) and see erroneous entries, don't ignore them. File your ITR as per Form 26AS, which is a condensed version of AIS, and Form 16A and B, which is provided by your employer (both previous and current). But remember to go back and flag errors in AIS, otherwise the IT department could penalise you for willful misreporting of your income. <br /><br /><div type="Article" hostid="261" msid="111402608" title="ITR filing: Documents you need to file your income tax return" mstype="2" mssubtype="0"></div><br />6. Do not forget to e-verify your ITR within 30 days of filing it. If you do not do this, your ITR filing will be considered invalid. If 30 days have passed since you filed your ITR post today, it will be seen as filing ITR post deadline, and you'll have to pay a fine. <br /><br />So, get going on your ITR filing, right away! <br />

Filing your ITR at the last minute? Don't make these mistakes

With Indians rushing to file their ITRs ahead of the July 31st deadline that's coming up tomorrow, did you know that residents of just one Indian state are exempt from filing income tax returns, or paying taxes at all?  Yes, Sikkim is the only state in the country where the residents do not have to pay income tax. But why is that the case? Let's delve into it. <br /><br />An erstwhile princely kingdom for almost 333 years prior to its amalgamation, Sikkim merged into independent India in 1975, thereby becoming the country's 22nd state. But this happened on one condition- that it will be allowed to continue with its old tax laws post the merger. <br /><br />Sikkim has its own income tax manual, which stipulated that no resident of Sikkim was to pay taxes to the center. Hence, honoring the merger agreement, the Indian government granted a special tax exemption to Sikkimese residents from Indian income tax regulations. <br /><br />This changed in 2008, when the Union budget repealed the state's tax laws. However, to maintain the exemption status enjoyed by the state's residents, it inserted section 10 (26AAA). Under this section, any income generated by a Sikkimese, be it from a source within the state, or by way of dividend or interest on securities, would be tax-exempt. <br /><br />At present, any individual who has been domiciled (noted as having fixed, principal and permanent residence) in Sikkim as of April 26, 1975 would be considered a Sikkimese, and hence, exempt from paying income tax. As per data from PRS Legislative Research, the state's estimated own tax revenue for 2023-24 stood at Rs 1,727 crore. <br /><br />However, if a Sikkimese has rental income from properties situated outside of the state, or has an income from source that is not located in Sikkim, it will be subject to relevant taxes. <br /><br />Nevertheless, the provisions of tax exemptions would not apply to any Sikkimese woman, who marries a non-Sikkimese or an outsider, on or after April 1, 2008. Market regulator SEBI has also exempted residents of Sikkim from mandatorily having a PAN card for investing in Indian stock markets, equities, cash market and even mutual funds. <br /><br /><h2>Decoding Section 10 (26) of the IT Act</h2>All these income-tax exemptions also extend to a few other regions in the country, but only if you are a member of the scheduled tribes. Section 10(26) of the Income Tax Act applies to Ladakh, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura, along with the North Cashar hills district, Karbi Anglang district, Chakma district, Mara district, and Lai District. <br /><br />Simply put, it stipulates that if you belong to the scheduled tribes and generate any income, the source of which lies in the above mentioned regions, or by way of dividend or interest on securities, your income would be tax-exempt. But any income generated outside of these regions would be taxable. <br />

Did you know about the only Indian state exempt from paying any income tax? Know all about it here

The deadline for filing your income tax return for AY 2024-25 i.e. July 31st is knocking right at your door. If you are yet to file your ITR, you still have some time. But there are certain things that you must remember and double-check before you click on submit ITR-from picking out the right form to ensuring that all the details you’ve furnished are correct. Read on to know the top five things that you must remember before ITR filing. <br /><br /><h2>Linking your PAN with Aadhar is mandatory</h2>Before you file your ITR, ensure that your PAN card is linked to your Aadhar card. You can’t file your ITR without linking your Pan to Aadhar first. This can be done online. In case you’re wondering whether or not your PAN is linked to your Aadhar card, you can visit <a href="https://eportal.incometax.gov.in/iec/foservices/#/pre-login/verifyYourPAN">this</a> link and verify. However, remember that this process can take up to 6-10 days to complete, so you'll have to jump aboard the belated ITR bandwagon in case you've just initiated the linking process. <br /><br /><h2>Pick the correct form</h2>Choosing the correct form is one of the most important things that you need to keep in mind while filing your ITR. For instance, the ITR-1 form is designed for resident individuals who have income from salary, one house property, and other sources such as interest or dividends, provided their total income does not exceed Rs 50 lakh. On the other hand, ITR-2 is applicable to individuals and Hindu Undivided Families (HUFs) with income from capital gains or foreign assets.<div type="Article" hostid="261" msid="111406215" title="Wondering which ITR form is right for you? Know all about it here" mstype="2" mssubtype="0"></div><br />ITR-3 is applicable for those who have income from business or professions, or those who are self-employed. ITR-4 is filled by those who opt for presumptive taxation. <br /><br /><h2>Remember to E-verify your return: </h2>Think you're done with your ITR filing? Think again! You will also need to e-verify your return. If the e-verification is not done within 30 days from filing your ITR, it will be rendered invalid, and will be considered as not filed. You will also not receive any refunds in the absence of e-verification of your ITR. You can easily e-verify your ITR via generating an OTP on your mobile number linked with Aadhar, or by generating an electronic verification code (EVC) through your pre-verified bank account or demat account. <br /><br /><h2>Check your documents and details</h2> When you are trying to get things done quickly, it isn’t uncommon to forget double-checking the details entered. Do remember to double-check all the details that you enter in your ITR. Also, filing an ITR requires certain documents like bank statements, investment proofs, TDS certificates, Form 16 etc. Even though you don’t have to attach these documents in the ITR, you must keep them handy.<br /><div type="Article" hostid="261" msid="111402608" title="ITR filing: Documents you need to file your income tax return" mstype="2" mssubtype="0"></div><br /><h2>Check income and investment details</h2> If you have just one source of income, the process is easy as you just need to mention that in your ITR. However, if you have multiple sources of income, you need to be careful and mention all of them. Similarly, ensure that you have entered all investment details in the form correctly. Do not forget to mention your interest earned on savings and fixed deposits, dividend income (if any) or income from other sources, since that could lead to hefty penalties. <br /><br />

Five things to remember as you file your ITRs at the last minute

Today is July 31st, 2024, the last day to file your income tax returns, without having to pay any penalties. And before you ask, the Income Tax Department has not come out with any notification informing the taxpayers of a deadline extension. That is why you should not delay filing your <a href="https://www.businessinsider.in/personal-finance/article/heres-your-ready-reckoner-for-itr-filing/articleshow/111402608.cms" data-type="tilCustomLink">income tax returns</a> anymore! <br /><br />The IT department noted that as of July 26th, 2024, over 5 crore ITRs had already been filed, marking an 8.5% increase from the number of ITRs filed during this period, last year. The IT department, in an X post, highlighted that last year, it had reached the 5-crore ITR filing deadline on July 27th. However, this year, it had breached the milestone a day earlier, i.e., on July 26th, 2024. <br /><br />Earlier, the All Gujarat Federation of Tax Consultants and Income Tax Bar Association had requested a deadline extension for AY 2024–25 from July 31st, 2024, to August 31st, 2024, citing issues and glitches in the tax filing portal. However, there has been no response from the finance ministry on the same. <br /><br /><h2>What happens if I don't file my ITR until July 31st? <br /></h2>For AY 2024–25, you can file a belated ITR until December 31st, 2024. But remember, it comes with many disadvantages as well. Here's a snapshot of all the benefits you will have to forego: <br /><br /><h2>What are the penalties for late filing of ITR?<br /></h2>1. You will have to pay a penalty of Rs. 1,000 if your total annual taxable income is below Rs 5,00,000. But if your taxable income exceeds this threshold, you will have to pay a penalty of Rs 5,000.<br /><br />2. Even if you have to file a nil ITR, you must do so before July 31st. This is because if you do not end up filing it on time, you will have to pay a fine of Rs 1,000.<br /><br />3. According to Section 234A of the Income Tax Act, you will also have to pay interest on your outstanding tax amount at the rate of 1% per month, starting from the due date, i.e., July 31st. <br /><br /><h2>No carry forward of losses, old tax regime</h2>1. You will not be able to carry forward any losses, including those from your mutual funds or stock investments, business income, and other sources. You will only be allowed to carry forward your losses from house properties. This could significantly raise your total tax liability and lead to you incurring hefty losses. <br /><br />2.  After July 31st, 2024, you will not be able to opt for the old tax regime for tax calculation purposes. Starting August 1, the new tax regime, which offers significantly fewer deductions and exemptions as compared to the old regime, will be considered default for you. <br /><br />Also read:<br /><a href="https://www.businessinsider.in/personal-finance/article/decoding-form-16-how-do-you-file-your-taxes-if-you-dont-get-form-16/articleshow/111529754.cms" data-type="tilCustomLink">Decoding Form 16: How do you file your taxes if you don't get Form 16?</a> <br /><a href="https://www.businessinsider.in/finance/tax/article/wondering-which-itr-form-is-right-for-you-know-all-about-it-here/articleshow/111406215.cms" data-type="tilCustomLink">Wondering which ITR form is right for you? Know all about it here</a><br /><br />

ITR Filing: Today is the last day to file your income tax returns, so file today to avoid penalties

The deadline to file your income tax returns is approaching fast, and Sana is perplexed. All of 23, she's just started earning and working at an MNC, earning Rs 7,00,000 per annum, and can't figure out which tax regime would work best for her. If you're having the same concerns and can't seem to wrap your head around the new tax regime, here's a ready reckoner for you:<br /><br /><strong>When should I choose new tax regime? <br /></strong>Think of choosing a tax regime as having to choose a friend in office. The old tax regime is that aged, wise senior who has answers and hacks for everything. Want to get over with a boring project quickly? They will certainly have a trick up their sleeve! On the other hand, the new regime is far more chilled out, lax and is a no-nonsense person who wants nothing to do with long documents and longer meetings. <br /><br />The new regime was introduced in budget 2020 to simplify taxation, and offer lower rate of taxes as compared to the old regime. However, there's a catch. You cannot claim the 70+ exemptions and deductions that help bring down your taxable income and hence, reduce your tax liability. This option is exclusively available under the old tax regime. <br /><br />The main USP of this tax regime? Lower tax rates, and fuss of deductions! Consider this. If your income is within the range of Rs 5,00,000-Rs 12,00,000, and you have no investments, house rent allowance (HRA), health/life insurance premiums or other such deductions to claim, the new tax regime would obviously make more sense to you, given the significant difference in tax liabilities (just 5% under new regime, and a whopping 20% in old regime for those in the Rs 5-6 lakh bracket!)<br /><br />    <div type="image" title="Tax rates under old and new regime" msid="111685908" hostid="261"></div><br />So, if you're someone who hates complex tax calculations, wants minimal tax deductions, the new regime might just be for you! But remember, there are two conditions under which this new regime will be automatically chosen for calculating your taxes:<br /><ul><li>If you keep procrastinating and don't file your ITR till July 31, 2024</li><li>If you do not specifically opt for the old tax regime on your employer's HR portal</li></ul>Also, if you earn less than Rs 3,00,000 per annum, you are completely exempted from paying any tax at all. In the old regime, this basic limit is slightly lower at Rs 2,50,000.<br /><br />Also read: <a href="https://www.businessinsider.in/personal-finance/income-tax/all-you-need-to-know-about-the-new-tax-regime/articleshow/111578840.cms" data-type="tilCustomLink"><strong>All you need to know about the new tax regime</strong></a> <br /><br /><strong>So, what do I get under this regime?</strong><br />Thanks to a rebate under Section 87A,  if you earn up to Rs 7 lakh per annum, your tax liability (and Sana's as well) will effectively be zero. This is limited to Rs 5 lakh under the old regime. While a standard deduction of Rs 50,000 is available under both of them (so you can directly deduct Rs 50,000 from your total income before even beginning to calculate your tax liability), there are a lot more deductions and exemptions that this regime <strong><u>DOES NOT </u></strong>allow you to avail:<br /> <br /><ul><li>Leave Travel Allowance (LTA)</li><li>House Rent Allowance (HRA) (Comes in handy if you're paying hefty rents in metros)</li><li>Interest on housing loan (on self-occupied property or vacant property)</li><li>Own contribution to NPS (If there's any)</li><li>Interest earned on savings bank A/Cs </li><li>Investments made in ELSS, PPF</li><li>Premiums paid towards life, health insurance policies</li></ul>As for the deductions that are allowed, that makes for a pretty small list:<br /><ul><li>Transport allowances (only if you are specially abled)</li><li>Gifts of up to Rs 50,000</li><li>Employer’s contribution to your NPS account</li><li>Interest paid on home loan only on let-out property</li></ul>But that's the trade-off. You get to pay taxes at low rates, yes, but you also don't get to claim a whole lot other deductions. Notes CA Nitesh Buddhadev, "Which regime is beneficial for you depends upon the allowances and deduction available to you during a relevant financial year. So, if your total income from salary is Rs 10.5 lakh and if the aggregate of any of the deductions / allowances you can claim is less than Rs. 3.15 lakh, you should opt for the new tax regime. If you have not invested in multiple tax-savings scheme, the new regime will work better. <br /><br />So, don't make this decision in any haste. You can choose your tax regime only once in a financial year. And if your income from business or other professions, be even more careful, because this will then become a once in a lifetime choice for you (quite literally!). So, take a good hard look at your finances, and then decide what works best for you! <br /><br />

Confused about the new tax regime? Here's when you should opt for it

July is here, and while we are still 5 months away from the end of 2024, the deadline to file your ITR is July 31st, which is looming large. While it is best to not "file away" filing your income tax returns for later, are you aware of the right ITR form that applies to you? Out of the 7 ITR forms available, how do you know which one is the right fit for you, and where to start? <br /><br />For starters, the first 4 ITR forms (ITR-1,2,3,4) are necessary for an individual to know about, while filing taxes. Lets decode all these forms in detail with Tanya, a 22 year old IT professional who earns Rs 10,000 per month. Her mother has a monthly rental income of Rs 12,000 per month. Will the two of them be required to file ITR? Well, the answer is no. You see, Tanya's annual income comes to about Rs 1,20,000, while her mother's total rental income comes to about Rs 2,40,000. <br /><br />If you opt for the old tax regime, you don't need to file an ITR if you annual income is below Rs 2.5 lakh. In the new regime, this limit stands at Rs 3 lakh. Similarly, if your grandparents are aged between 61-79, they need not file an ITR if their annual income (via rent, pensions) falls below Rs 3 lakh. And if they are aged above 80, this threshold if of Rs 5 lakh for the year. <br /><br /><h2>ITR-1: Sahaj </h2>Lets continue with Tanya's life. She works super hard, and over the years, earns a few well deserved raises. Now, her monthly income is Rs 50,000. In this case, she will have to file ITR-1, which is also known as Sahaj. This form applies to you if your total annual income for the year does not exceed Rs 50,00,000. The best part? This form is generally pre-filled, and all you've got to do is verify the information through your Form-16 and Annual Information Statement (AIS). <br /><br /><h2>ITR-2<br /></h2>Over time, Tanya decides to start investing in mutual funds. While she holds most of her investments for the long-term, she is compelled to sell some units of her investment in equity mutual funds, due to a medical emergency at home. <br /><br />She had purchased some equity mutual fund units worth Rs 2,00,000 on April 1, 2023. Due to the emergency, she had to sell about Rs 80,000 worth of units in December of the same year. On redemption, she received Rs 1,10,000. Since she had held these securities for less than 12 months, Tanya would have to pay a short-term capital gains tax of 15%,<br /><br />Had Tanya held on to these securities for more than 12 months and then sold them at a gain, she'd have to pay long-term capital gains tax, which is applicable at 10% for equity mutual funds. And to account for such capital gains, be it from sale of shares, mutual funds, property or the like, Tanya needs to file ITR-2. <br /><br /><h2>ITR-3</h2>Tanya's brother, Vishal, is a freelancer who got hooked to trading in futures and options during the pandemic. Initially, he made solid profits, but during FY24, he ran into losses worth Rs 5 lakh. In this case, he will have to file ITR-3 to report his losses. This form is to be used by those who earn income under the head of profits (or even losses) of business or profession, other than regular salary. <br /><br />In case Tanya's mother starts receiving rental income from more than one house properties, she will also have to file ITR-3. Or, in case you are a CA, or a doctor and have your own practice (are self employed), this form is for you. <br /><br /><h2>ITR-4: Sugam <br /></h2>This form is exclusively for those who opt to be taxed under the presumptive taxation scheme. You can opt for this scheme if you are a small business/firm and your annual turnover is less than Rs 3 crore, or you are self employed with an annual revenue of less than Rs 75 lakh.<br /><br />Under this, you don't pay taxes on your actual income, rather, you pay taxes on a presumed income. As per law, under this scheme, your net income will be considered as 6% of your total revenue, and you'll have to pay taxes on that. Here, you're really not calculating your income for taxation, and hence, it is not even mandatory to maintain records.<br /><br />In case you file the wrong ITR, you can always file a revised return by December 31, 2024. In case you miss filing your ITR on time, you’ll have to pay Rs 5,000 as a penalty. Moreover, you’ll be charged interest on your outstanding tax liability, if there is any. So, get down to work, right away! <br /><br />

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