Filing Return -A Complete Guide for Salaried and Pensioners

 What is ITR?

ITR is the short form of Income Tax Return. Filing a return means submitting the declaration in a filled form about the income, savings, and expenses during the last financial year before the Income Tax Department.


income-tax-filing-guide


Is Filing a return is mandatory?

If your annual gross income is more than the basic exemption limit as per IT Rules, you must file an income tax return for the concerned financial year.

What is the basic exemption?

The Basic Exemption is the amount of income decided by the Government on a year-on-year basis for which no tax is liable to pay. You have to pay tax only when your taxable income after all the deduction exceeds your basic exemption limit.

What is the Basic Exemption limit at present?

The basic exemption limit for the financial year 2021-22 (The assessment Year 2022-23) is Rs. 250000 for an individual below 60 years. However, it varies in different age groups. For senior citizens aged 60 years or above but below 80 years, the basic exemption limit is 300000. The basic exemption limit is Rs. 500000 for above 80 years.

What is the Income Tax Slab for FY 2021-22?

Income tax slab rates in New Tax Regime differ from rates in Old Tax Regime.

Old Tax Regime Vs New Tax Regime

Tax slab for New Tax Regime

Taxable Income Tax Rate
Up to Rs.2,50,000 Nil
Rs. 2,50,001 to Rs. 5,00,000     5%
Rs. 5,00,001 to Rs. 7,50,000 10%
Rs. 7,50,001 to Rs. 10,00,000 15%
Rs. 10,00,001 to Rs. 12,50,000 20%
Rs. 12,50,001 to Rs. 15,00,000     25%
Above Rs. 15,00,000 30%

Tax slab for Old Tax Regime
A. Applicable for individual below 60 years of age.


Taxable Income Tax Rate
Up to Rs.2,50,000 Nil
Rs. 2,50,001 to Rs. 5,00,000     5%
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

B. Applicable for individual of 60 yrs or more but below 80 years of age.

Taxable Income Tax Rate
Up to Rs.3,00,000 Nil
Rs. 3,00,001 to Rs. 5,00,000     5%
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

C. Applicable for individual above 80 years of age.

Taxable Income Tax Rate
Up to Rs.5,00,000 Nil
Rs. 5,00,001 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

How to calculate income tax for FY 2021-22

         

 

Add your monthly gross income to find out the annual income. Then add income from other sources, if any, like bank interest or income from house property, etc.

Now, you have total gross annual income. Deduct Rs. 50000 (for salary and pension income only) from it as standard deduction and any other exemption like a professional tax from annual income.

Thereafter deduct a maximum amount of Rs 150000 for your savings u/s 80C of IT rules. Now also deduct eligible amount u/s 80D to 80U from what you get in the previous step.

Thus you can get Taxable income. Now subtract the basic exemption limit from the taxable income. After subtraction derives the tax amount from the balance as per the tax slab discussed above. In the end, add 4% of the tax amount as Education Cess to the tax. The total tax becomes your tax liability.

If you find the process somehow difficult, the best way for you is to use a tax calculator app like 'Easy Tax Calculator'.

How to file Income Tax Return easily

Follow the video tutorial below step by step to file your return online within a few minutes.
Step-by-Step guide on how to file online tax return.


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