INCOME-TAX ACT, 1961An Act to consolidate and amend the law relating to income-tax and super-tax

 INCOME-TAX ACT, 1961*

[43 OF 1961]

[AS AMENDED BY FINANCE ACT, 2021]

An Act to consolidate and amend the law relating to income-tax and super-tax

BE it enacted by Parliament in the Twelfth Year of the Republic of India as follows :—

What is Income Tax in India

 

What is Income Tax in India? A Friendly Guide for Everyone

Income tax is something we all have to deal with at some point in our lives. Whether you're a salaried employee, a freelancer, a business owner, or even a student trying to understand how taxation works in India, this guide is for you. I'll break down everything in simple terms so that you can confidently navigate the world of taxes without feeling overwhelmed.

Let's dive into the essentials of Income Tax in India, why we pay it, and how it affects different types of taxpayers.

Best Tax-Saving Tips for Salaried Employees in India

 

Best Tax-Saving Tips for Salaried Employees in India (2024 Guide)

📌 Introduction

Tax planning is essential for every salaried employee in India. By making smart investment choices and leveraging tax deductions, you can significantly reduce your tax burden and increase your savings. However, many employees miss out on valuable exemptions due to a lack of awareness. In this guide, we will cover the best tax-saving strategies, including deductions under Section 80C, home loan benefits, salary structuring, and more.

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🔹 Section 1: Understanding Tax Slabs & Choosing the Right Tax Regime

Before you start tax planning, you need to understand the income tax slabs and choose the best tax regime for yourself.

Old vs. New Tax Regime (2024-25)

Income Range (₹)	Old Tax Regime	New Tax Regime
Up to 2,50,000	Nil	Nil
2,50,001 – 5,00,000	5%	5%
5,00,001 – 7,50,000	20%	10%
7,50,001 – 10,00,000	20%	15%
10,00,001 – 12,50,000	30%	20%
12,50,001 – 15,00,000	30%	25%
Above 15,00,000	30%	30%

Which Tax Regime Should You Choose?

✅ Choose Old Regime if you claim deductions like 80C, 80D, HRA, home loan benefits ✅ Choose New Regime if you don’t have deductions and want lower tax rates ✅ Example Calculation: A salaried employee earning ₹10 lakh can save ₹30,000 more under the old regime if using 80C and other deductions

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🔹 Section 2: Maximizing Tax Savings Under Section 80C (₹1.5 Lakh Limit)

Under Section 80C, you can claim deductions of up to ₹1.5 lakh per year. Here are the best options:

Best Tax-Saving Investments Under 80C

Investment Option	Lock-in Period	Returns (Approx)
Employee Provident Fund (EPF)	Till retirement	8.15%
Public Provident Fund (PPF)	15 years	7.1%
Equity Linked Savings Scheme (ELSS)	3 years	10-15%
National Pension System (NPS)	Till 60 years	8-10%
Tax-Saving Fixed Deposits	5 years	6-7%
Life Insurance Premiums (LIC, Term Plans)	Varies	Depends on the policy

👉 Best Choice? ELSS funds have the lowest lock-in and highest returns, but PPF is safest for risk-free tax savings.

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🔹 Section 3: Additional Deductions Beyond 80C

Apart from 80C, you can claim extra deductions under these sections: ✅ 80D: Health insurance premium up to ₹75,000 (self + family + parents) ✅ 80E: Education loan interest (No limit) ✅ 80G: Donations to charity (50-100% deduction) ✅ 80TTA: Savings account interest up to ₹10,000 tax-free ✅ 80TTB: Fixed deposit interest for senior citizens up to ₹50,000 tax-free

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🔹 Section 4: How to Save Tax on House Rent & Home Loans?

House Rent Allowance (HRA) Exemption

✅ HRA Calculation: Least of the following three is exempted from tax:

• Actual HRA received from employer

• 50% of basic salary (metro cities) or 40% (non-metro)

• Rent paid - 10% of basic salary ✅ Example: If your basic salary is ₹40,000/month and you pay ₹15,000 rent, your HRA exemption is ₹1.44 lakh/year

Home Loan Tax Benefits

✅ Section 24(b): Deduction on Home Loan Interest (₹2 Lakh) ✅ 80EEA: Additional ₹1.5 Lakh Deduction for First-Time Buyers ✅ 80C: Principal Repayment Deduction up to ₹1.5 Lakh

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🔹 Section 5: Advanced Tax-Saving Strategies for Salaried Employees

Salary Structuring to Reduce Taxes

✅ Opt for Meal Coupons (Tax-free up to ₹2,500/month) ✅ Get Leave Travel Allowance (LTA) to claim tax-free travel ✅ Mobile & Internet Reimbursement up to ₹3,000/month ✅ Employer's NPS Contribution (Exempt up to 10% of salary)

Maximizing Employer Benefits

✅ ESOPs (Employee Stock Options) – Know when to sell to reduce taxes ✅ Superannuation Funds – Extra retirement savings with tax benefits ✅ Tax-Free Allowances & Reimbursements

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🔹 Section 6: Common Mistakes to Avoid in Tax Planning

❌ Not submitting investment proof on time ❌ Choosing the wrong tax regime without calculating benefits ❌ Ignoring deductions beyond 80C (like 80D & 80E) ❌ Forgetting to claim House Rent Allowance (HRA) exemption ❌ Not planning for long-term capital gains tax (LTCG)

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🔹 Section 7: Step-by-Step Guide to Filing ITR & Claiming Tax Benefits

✅ Checklist of Documents Needed for ITR Filing ✅ Step-by-Step Process to File ITR Online ✅ How to Verify & Track Your ITR Status?

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🔹 Conclusion & Final Tax-Saving Tips

✅ Key takeaways: Choose the right tax regime, invest wisely in PPF, ELSS, NPS, and optimize salary structure to save taxes ✅ Use tax calculators, consult a CA, and file your ITR on time

📢 Looking for more tax-saving strategies? Stay updated with our blog for the latest tax tips & expert insights!

Income Tax Return ITR: Relief To Taxpayers

There is helpful news for the citizens who have not re-confirmed their ITR for the monetary year 2019-20. 

The Income Tax Department has expanded the cutoff time for e-confirmation, giving help to such citizens.

Such taxpayers have been given an exemption by the Income Tax Department to complete the verification process by February 28, 2022. As per law, Income Tax Returns (ITR) filed electronically without a digital signature can be submitted within 120 days with Aadhaar OTP or code sent through net-banking or Demat account, pre-validated bank account, and e-through ATM. Have to get verified.

Getting The Biggest Benefit From Tax Help

Taxes are a way of life in America. It is their responsibility to pay and file. 

When it comes to taxes, most people look for someone to help them. The time period from January 1 to April 15 seems quite tax-advantaged. Unfortunately, it's better to avoid some tax help. Sometimes tax help is something most people don't know how to find. Getting the most out of tax assistance depends on why you need first aid and where to get it.

Many people need tax help because they don't have complex tax codes. Every year something changes and people are afraid of doing something wrong with their taxes and getting into trouble with the IRS. Many people view tax assistance as a guarantee of fair and accurate tax returns. They believe that this way they can get more exemptions and credits, which equates to a larger tax return. Unfortunately, a lot of this depends on where you get your tax help.

Tax education seems to be the most rational and quickest way to get professional tax help. What most people don't realize is that the IRS provides a lot of useful information for free. They can help you prepare your return and answer any questions you may have. The new tax preparation software does a great job of helping with tax preparation. 

You write step-by-step information which is easy to follow. The software handles all the intricacies and all you have to do is write down the data and answer simple questions. While it's sometimes a good idea to consult with tax professionals, sometimes people are tempted to splurge on big, quick returns. 

This offer only results in higher fees and lower returns. Sometimes there are unskilled tax helpers who claim to be eligible. This can create many problems with incorrect returns which is entirely up to you, the filer.

Once you understand why you need tax help, you can find someone to help you. If you're looking for an instant refund, try accounting software that files your return electronically. If you're using direct deposit, you should see it in two weeks, maybe even faster. 

If you're concerned about deciphering complex tax codes, you should seek help from the IRS or other free services and then try a software program. If all else fails, get professional services. Make sure you fully understand their terms and charges and do not buy into any glamorous advertisements.

Income Tax Refund: 'Good News' For Taxpayers! CBDT Issues Refunds

The Central Board of Direct Taxes (CBDT) on Thursday said it has issued returns worth over Rs 1,54,302 crore. 

"From 1st April 2021 to 10th January 2022, CBDT has issued refunds of over Rs 1,54,302 crore to 1.59 crore taxpayers," the CBDT said. In addition, income tax of Rs 53,689 crore was refunded in 1,56,57,444 cases and corporate tax of Rs 1,00,612 crore in 2,21,976 cases, the department said.

What number of ITRs have been recorded till 31st December?

Till December 31, around 5.89 crore Income Tax Returns (ITRs) have been filed in the new e-filing portal for the financial year 2020-21 (ending March 2021). Out of this, over 46.11 lakh ITRs were recorded on December 31. 

"As of 31st December 2021, around 5.89 crore Income Tax Returns (ITRs) have been recorded in the new e-documenting entrance of Income Tax Department," the CBDT said.

Of the 5.89 crores, ITRs submitted for the assessment year 2021-22 (Financial Year 2020-21), 49.6 percent ITR1 (2.92 crores), 9.3 percent ITR2 (54.8 lakh), 12.1 percent ITR3 (71.725 lakh), 2. ITR4 ( 1.60 crores), 1.3 percent ITR5 (7.66 lakh). Also 2.58 lakh ITR-6 and 0.67 lakh ITR-7 have been filed.

What if I have not paid ITR yet?

If you cannot file your ITR by 31st December 2021, then you now have 31st March 2022. Notwithstanding, for this, you should suffer a consequence. Late filers will have to pay a fine for the delay. 

Chargemaster Balwant Jain says that assuming your pay is more than Rs 5 lakh, then, at that point, you should suffer a consequence of Rs 5,000 while documenting ITR and if the income is less than Rs 5 lakh then the penalty fee will be one. thousands of rupees

Understanding the Indian Income Tax Act, 1961

 

Understanding the Indian Income Tax Act, 1961: A Comprehensive Guide

Taxes might not be the most exciting topic, but they play a crucial role in our financial lives. Whether you are a salaried individual, a business owner, an investor, or even a student planning for the future, understanding the Income Tax Act, 1961 is essential. It governs how we pay taxes, defines taxable income, outlines tax slabs & rates, and provides avenues for tax savings.

In this guide, I will break down the complexities of the Income Tax Act, 1961 in a simple and approachable manner. By the end, you’ll have a clear understanding of your tax obligations and benefits under the law.