Income Tax Return Filing in India for FY 2023-24: Step By Step Guide, Due Dates, Penalty

Filing an income tax return (ITR) is an annual ritual for taxpayers in India. It is a process where you inform the government about your earnings and pay the taxes due on them. For the Financial Year (FY) 2023-24, there are several updates and key points that taxpayers need to be aware of. This comprehensive guide will walk you through the essentials of income tax return filing in India for FY 2023-24.

Also Read-Advance Tax Due Dates AY 2023-24: Applicability, How to Pay Advance Tax

Understanding the Basics

Before diving into the specifics of the filing process, it’s important to understand the basics. The FY 2023-24 refers to the period starting from April 1, 2023, to March 31, 2024. The income earned during this period is subject to taxation, and the details of this income must be reported in the ITR filed in the Assessment Year (AY) 2024-25.

New Tax Regime vs. Old Tax Regime.

The choice between the New Tax Regime and the Old Tax Regime in India for FY 2023-24 involves considering various factors such as income levels, available deductions, and personal financial goals. Here’s a detailed comparison based on the sources provided:

Key Differences Between New and Old Tax Regimes.

 Tax Slabs and Rates:

• • Old Tax Regime: Features fewer tax slabs with higher rates but allows for a wide range of deductions and exemptions, which can significantly reduce taxable income.
  • New Tax Regime: Introduced with more tax slabs offering generally lower rates but eliminates most deductions and exemptions, aiming to simplify the tax filing process. This regime is now the default starting FY 2023-24.

Deductions and Exemptions:

• • Old Tax Regime: Permits numerous deductions under various sections of the Income Tax Act, such as 80C (investments), 80D (medical insurance), HRA (House Rent Allowance), and LTA (Leave Travel Allowance).
  • New Tax Regime: Provides very limited deductions. A notable change in FY 2023-24 is the allowance of a standard deduction of Rs 50,000 available in both regimes, but other common deductions like HRA, LTA, and 80C are not available in the new regime.

Tax Liability:

• • Old Tax Regime: Can result in a lower tax liability for those who maximize their deductions and exemptions. It is particularly beneficial for high earners who make significant investments and expenditures that are tax-deductible.
  • New Tax Regime: May be more beneficial for individuals with lower incomes or those who do not invest much in tax-saving instruments. It simplifies the process by not requiring detailed proof of investments and expenditures.

Choosing the Right Regime.

• For Low to Middle Income Earners: The new regime may be more beneficial, especially if their income is below Rs 7 lakh, as they would not owe any tax due to the rebate. Additionally, those who do not have significant investments or expenses that qualify for deductions will find the new regime simpler and possibly more economical.
• For High Income Earners: The old regime might be more advantageous if they can utilize the extensive deductions and exemptions to significantly reduce their taxable income. This is particularly true for those with large investments, home loans, or high medical insurance premiums.
• For Simplicity: Taxpayers who prefer a straightforward tax filing process without the need to track and prove investments and expenses might favor the new regime.

The decision between the old and new tax regimes depends heavily on individual financial circumstances, income level, and personal preferences regarding investments and record-keeping. Taxpayers should carefully assess their potential deductions, tax liability under each regime, and personal ease with compliance requirements before making a choice. The new regime, being the default from FY 2023-24, simplifies the process for many, but the old regime could still offer significant savings for those who actively engage in tax planning.

Who Should File an ITR?

Filing an ITR is mandatory for individuals whose income exceeds the basic exemption limit. Additionally, if you have conducted high-value transactions, deposited large amounts in current accounts, or have foreign assets, you are required to file an ITR regardless of your income level.

Here’s an Overview:

1. Income Earners: All Indian citizens, including Non-Resident Indians (NRIs) who earn income in India, are required to file an ITR if their income exceeds the basic exemption limits. This encompasses income from salary, property, business, or other sources.
2. Income Thresholds:
   • Individuals below 60 years of age must file an ITR if their annual income exceeds Rs. 2.5 lakh.
   • Senior citizens (aged 60 to 79) with an annual income exceeding Rs. 3 lakh.
   • Super senior citizens (aged 80 and above) with an annual income exceeding Rs. 5 lakh.
3. Special Categories:
   • Companies or firms, irrespective of their profit or loss, are obligated to file an ITR.
   • Individuals who wish to claim a tax refund.
   • Residents of India who have signing authority in any foreign account.
   • Residents who own an asset or have a financial interest in an entity located outside India.
   • Individuals who have sold equity shares or mutual fund units and have capital gains.
4. Other Conditions:
   • Individuals applying for loans, tenders, or startup funding may need to file an ITR as proof of income.
   • NRIs whose income earned or accrued in India exceeds the basic exemption limit.
   • Individuals who have conducted high-value transactions.
5. Mandatory Filing Under Certain Conditions:
   • If the taxes deducted or collected at source exceed a certain threshold.
   • Individuals who have deposited a significant amount in a savings bank account within a fiscal year.
   • Those who have incurred high electricity bills during the financial year.

These criteria outline who is required to file an ITR in India. It’s essential for individuals and entities to assess their financial activities and income sources against these criteria to ensure compliance with tax laws and to avail of benefits such as tax refunds and credits.

Due Dates for Filing ITR for FY 2023-24.

The due dates for filing Income Tax Returns (ITR) for the Financial Year (FY) 2023-24 (Assessment Year 2024-25) are crucial for taxpayers to avoid penalties. Here are the key deadlines:

• For Individual/HUF/AOP/BOI: The deadline for filing ITR is July 31, 2024. This applies to individuals, Hindu Undivided Families (HUFs), Association of Persons (AOPs), and Bodies of Individuals (BOIs) who do not require an audit.
• For Businesses Requiring Audit: Businesses that are subject to audit under the Income Tax Act must file their ITR by October 31, 2024. This includes certain categories of businesses and professionals whose turnover or gross receipts exceed specified limits.
• For Businesses Requiring Transfer Pricing Reports: Entities involved in international transactions or specified domestic transactions requiring transfer pricing reports must file their ITR by November 30, 2024.
• For Filing Revised Return: Taxpayers who discover any omission or wrong statement in their originally filed return can file a revised return by December 31, 2024.
• For Filing Belated/Late Return: The deadline for filing a belated or late return is also December 31, 2024. It’s important to note that filing after the due date may attract a late filing fee.

Advance Tax Payment Deadlines for FY 2023-24.

Paying advance tax is mandatory for taxpayers whose estimated tax liability for the year exceeds ₹10,000. The payment deadlines are as follows:

• First Instalment (15% of Tax Liability): Due by June 15, 2023.
• Second Instalment (45% of Tax Liability): Due by September 15, 2023.
• Third Instalment (75% of Tax Liability): Due by December 15, 2023.
• Fourth Instalment (100% of Tax Liability): Due by March 15, 2024.
• For Taxpayers under the Presumptive Scheme (100% of Tax Liability): The entire amount should be paid by March 31, 2024.

Meeting these deadlines is essential for maintaining compliance with the Income Tax Act and avoiding any penalties or interest on late payments.

Documents Required for Filing ITR.

The documents required for filing an Income Tax Return (ITR) in India for the Financial Year (FY) 2023-24 vary based on the taxpayer’s sources of income, but there are several common documents that are essential for most taxpayers. Here’s a consolidated list of documents required for filing ITR as mentioned across the sources:

1. PAN Card: The Permanent Account Number (PAN) is a mandatory document for filing ITR. It is used for all transactions with the Income Tax Department.
2. Aadhaar Card: Linking Aadhaar with PAN is necessary for e-filing your ITR.
3. Form 16: Issued by employers, Form 16 contains details of the salary paid and any tax deducted at source (TDS) during the financial year.
4. Form 26AS: This form is a tax credit statement that shows TDS from your salary, interest income, and advance tax payments.
5. Bank Statements: Required to report the interest income earned from savings accounts, fixed deposits, etc., and for verifying the income and tax payments.
6. Interest Certificates: From banks and post offices, these certificates detail the interest income earned, which needs to be reported in the ITR.
7. Documents Related to Income from House Property: If applicable, include rent agreements, municipal tax receipts, and interest certificates for home loans1.
8. Capital Gain Statements: For reporting income from the sale of assets like equity shares, mutual funds, property, etc. These statements help calculate capital gains or losses.
9. Proof of Tax-saving Investments: Documents related to investments or expenses that qualify for tax deductions under sections like 80C, 80D, etc.
10. TDS Certificates (Form 16A/16B/16C): For TDS on other incomes like interest on fixed deposits (Form 16A), TDS on property sale (Form 16B), and TDS on rent (Form 16C).
11. Annual Information Statement (AIS): It provides a comprehensive view of all financial transactions made during the year that may have tax implication.
12. Proof of Foreign Income and Taxes (for NRIs): Documents related to income earned outside India and taxes paid on such income, if applicable.
13. Details of Business Income (for Businessmen and Professionals): If opting for a presumptive scheme under sections 44AD or 44ADA, details like gross turnover/receipts, gross profit, etc., are needed. For businesses not opting for presumptive taxation and exceeding certain turnover limits, audit reports under section 44AB may be required.

It’s important to note that while these documents are required for preparing and filing your ITR, you do not need to attach or submit these documents physically with your ITR. However, keeping them handy is advisable for reference and in case of scrutiny by the Income Tax Department1.

Step By Step Guide to Filing ITR Online for FY 2023-24.

Filing ITR online has been simplified over the years. Here’s a step-by-step guide to e-filing your ITR:

1. Visit the Income Tax e-Filing Website: Start by navigating to the official Income Tax e-filing website. This is the portal where you will register (if you’re a first-time user) or log in (if you’re a returning user) to file your ITR.
2. Register or Log In: If you’re a new user, you’ll need to register using your PAN, which will serve as your user ID. Returning users can simply log in using their PAN or user ID and password. After entering your details, you’ll need to complete a security check by ticking the checkbox and then clicking on ‘Continue’.
3. Select ‘File Income Tax Return’: Once logged in, navigate to the ‘e-File’ menu and select ‘Income Tax Returns’ followed by ‘File Income Tax Return’. This will redirect you to the Income Tax Return page.
4. Enter Required Details: At this stage, your PAN will be auto-filled. You’ll need to choose the appropriate Assessment Year (the financial year following the one in which you earned your income) and the type of filing (either ‘Original’ or ‘Revised Return’).
5. Select Mode of Filing as ‘Online’: Click on ‘Continue’, then select the mode of filing as ‘Online’ and click on ‘Proceed’.
6. Choose the Appropriate ITR Form: Based on your income sources and circumstances, select the correct ITR form. The forms range from ITR-1 (Sahaj) for salaried individuals to ITR-4 for those with presumptive income from business and profession.
7. Fill in the Details: Input your personal information, income details, deductions, and tax payments. Review the pre-filled information for accuracy and make any necessary corrections.
8. Summary of Tax Computation: The portal will display a summary of your tax computation based on the provided information. This will indicate whether you owe any tax or are eligible for a refund.
9. E-Verify Your ITR: This crucial step involves verifying your return. You can choose to e-verify through various methods like Aadhaar OTP, Netbanking, Electronic Verification Code (EVC), or by sending a physical copy of ITR-V to CPC, Bengaluru.
10. Submit Your ITR: After completing the above steps, click on ‘Submit’ to finalize the process. You will receive an acknowledgment from the Income Tax Department on the email ID you provided.

Remember, the specific steps and requirements may vary slightly depending on your individual circumstances and the ITR form you are filing. Always refer to the official Income Tax e-filing website for the most current information and guidance.

Common Mistakes to Avoid When Filing Your ITR.

Filing an Income Tax Return (ITR) accurately is crucial to avoid complications, delays, or penalties. Here are key mistakes taxpayers should avoid:

1. Not Reporting All Income Sources: Ensure you report income from all sources, including salary, interest income, dividends, capital gains, and rental income. Omitting any income source can lead to legal issues.
2. Providing Incorrect Personal Information: Accurate personal details such as name, address, PAN (Permanent Account Number), and bank account details are essential. Errors can cause processing delays or issues with tax refunds.
3. Selecting the Wrong ITR Form: It’s critical to choose the correct ITR form based on your income sources and taxpayer category. Using an incorrect form can result in your return being considered defective.
4. Missing the Due Date: Filing your ITR by the due date is important to avoid late filing fees and interest charges. Late submissions can also impact refunds and the ability to carry forward losses.
5. Failure to E-verify the ITR: After filing, the ITR must be verified within 120 days, or the filing is considered invalid. Verification can be done online through Aadhaar OTP, net banking, or by sending a signed ITR-V to the CPC.
6. Income and Tax Deduction Mismatch with Form 26AS and Form 16: Ensure the income and tax deductions reported in your ITR match the details in Form 26AS and Form 16 to avoid queries from the Income Tax Department.
7. Omitting ‘Other Income’: All ‘other income’ such as interest, dividends, and capital gains must be reported. These are tracked by the tax department, making it essential to include them in your ITR.
8. Not Reporting Foreign Income and Assets: If you have foreign income or assets, they must be reported in your ITR. Failure to do so can result in severe penalties.
9. Ignoring Clubbing of Income: Income from investments made in the name of a spouse or minor child must be reported under the income of the person making the investment due to clubbing provisions.
10. Not Filing a Revised ITR if Needed: If errors are discovered in your original ITR, filing a revised return is necessary. Not correcting known mistakes can lead to penalties and interest charges.

By avoiding these common errors, taxpayers can ensure a smoother and more accurate ITR filing process.

Penalties for Late Filing of ITR FY 2023-24.

For the Financial Year (FY) 2023-24, the penalties for late filing of the Income Tax Return (ITR) are as follows:

Late Filing Fees Under Section 234F:

• Taxpayers who file their ITR after the due date but before December 31, 2024, will be subject to a late filing fee.
• The fee is Rs. 5,000 for taxpayers with a total income exceeding Rs. 5 lakh.
• For taxpayers with a total income of Rs. 5 lakh or less, the late filing fee is Rs. 1,000.

Interest Under Section 234A:

• Interest is charged at 1% per month or part of a month on any unpaid tax amount. This interest is calculated from the due date of the return until the tax is fully paid.

Additional Consequences:

• Certain losses, other than those from house property, cannot be carried forward if the return is not filed by the due date.
• Refunds, if applicable, are delayed as they are processed only after the returns are filed.
• Increased scrutiny from the Income Tax Department and potential legal consequences, including prosecution and fines, can occur, especially in cases of willful non-filing.

It’s important to file the ITR on time to avoid these penalties and ensure smooth financial operations.

Benefits of Filing of ITR FY 2023-24.

Income tax return filing in India for FY 2023-24 is a crucial task that should be done with diligence. By understanding the new rules, preparing the necessary documents, and following the steps outlined, you can ensure a smooth and compliant filing process. Remember to file your ITR on time to avoid penalties and to take advantage of the benefits of being a responsible taxpayer.

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