Your Financial Assistant
Starting your first job is an undeniable milestone in your adult life. While your paychecks bring you financial autonomy, they also bring you specific financial responsibilities. To better manage your responsibilities, you need to learn certain habits. Learning financial discipline early on makes savings a …
In today’s ever-changing landscape of life there are varieties of unpredictable events, where insurance is not just an option but the need of the hour. Merely taking the first step towards securing your future by purchasing a Conventional Life Insurance or Unit Linked Plan (ULIP) …
Life has been a journey of accomplishments and financial milestones for you. As you enjoy the fruits of your hard work and see your life goals materialize, it’s essential to protect your legacy and the lifestyle you’ve built for your family. Uncertainties still exist, and that’s where insurance plays a crucial role, providing a safety net against unforeseen situations and safeguarding your loved ones’ future. If you already have insurance policies in place, you may be pondering whether your current coverage aligns with your changing needs and financial aspirations. Let us discuss the process of analysing your current insurance coverage so you can gain clarity and make informed decisions regarding your insurance needs.
Determining the appropriate amount of life insurance coverage is a critical step in safeguarding your loved ones and securing your financial future. While there is no one-size-fits-all solution to the question of how much life insurance you truly need, there are a few things you must consider in order to make a well-informed decision.
1. Calculate Your Insurance Needs: To calculate the right amount of your life insurance coverage, consider using the HDFC Life Term Insurance Calculator. By inputting essential information such as outstanding debts, living expenses, education fees, and financial responsibilities, the calculator can provide a personalised suggestion for your life insurance policy. This will assist you in making an informed decision by offering a customised estimate based on your individual circumstances.
2. Financial Obligations: Begin by evaluating your current and potential financial obligations. Consider outstanding bills such as a mortgage, personal loans, or credit card debt, as well as continuous living expenses, children’s education fees, and other financial responsibilities. The goal of life insurance is to ensure that these costs are covered in the event of any unforeseen circumstances that occur to you.
3. Income Replacement: Consider how much income your family would require to maintain their current standard of living if you were no longer available to provide for them. Life insurance can help replace your income and ensure that your loved ones’ financial requirements are met in the future.
4. Insuring Your Dependents: Determine the number of dependents on your income and the amount of financial support they would require. Take into account their age, education, and any unique requirements they may have. When choosing the amount of life insurance you require, it is critical to consider their long-term financial well-being.
5. Future Objectives: Consider your long-term objectives, such as supporting your children’s education, starting a business, or assuring your spouse’s comfortable retirement. Life insurance can help protect these objectives by providing a death benefit.
6. Existing Coverage: Consider whether you have any existing life insurance coverage, such as through employer-provided policies or personal insurance plans. When obtaining an insurance policy, you must check that the sum insured is adequate to cover your current and future demands. You should not have to bear the burden of a costly financial catastrophe down the road simply because you did not have appropriate coverage.
Life is unpredictable, and it is better to be safe than sorry. By carefully analysing your circumstances and considering these crucial factors, you can make informed decisions that will help protect your family’s well-being and preserve your financial future. Remember, it is never too early to begin planning for and safeguarding what is most important.
Consider insurance as a financial instrument that provides peace of mind and security. Insurance requirements change as a result of changes in income, expenses, age, lifestyle, debt, inflation, and so on, and you must account for all of these changes to ensure that you are fully insured.
Despite choosing the best possible insurance policies, there are times when people encounter unexpected situations that make them falter on premium payments. This can further lead to a bigger trouble of policy lapse if one fails to pay the premium even within the grace period. …
Tax Deduction and Collection Account Number (TAN) is a 10-digit alphanumeric number that is required on all TDS returns under Section 203A of the Income Tax Act, 1961. The TAN number is needed by all those who are responsible for deducting and collecting taxes. Let us tell …
Filing income tax returns is no longer the hassle it used to be. Gone are the long queues and endless anxiety of making the tax-filing deadline
With online filing,also called e-filing, it is convenient to file returns from the confines of your home/office and at very short notice.
Mentioned below are the broad steps to file your income tax returns online:
| Sr No. | Step | Guide To File ITR Online |
| Step 1 | Log on to the portal | Log on to the Income Tax Department portal (www.incometaxindiaefiling.gov.in) for filing returns online. Register using your Permanent Account Number (PAN), which will serve as the user ID. |
| Step 2 | Download appropriate ITR form | Under ‘Download’, go to e-filing under the relevant assessment year and select the appropriate Income Tax Return (ITR) form. Download ITR-1’s (Sahaj) return preparation software if you are a salaried individual. |
| Step 3 | Enter details in Form 16 | Open the Return Preparation Software (excel utility) that you have downloaded, follow the instructions and enter all details from your Form 16. |
| Step 4 | Compute all relevant tax details | Compute tax payable, pay tax and enter relevant challan details in the tax return. If you do not have a tax liability, you can skip this step. |
| Step 5 | Confirm the above details | Confirm the details entered by you and generate an XML file, which is automatically saved on your computer. |
| Step 6 | Submit return | Go the ‘Submit Return’ section and upload the XML file. |
| Step 7 | Digital signature | You can digitally sign the file on being prompted. If you do not have a digital signature, you can skip this step |
| Step 8 | Confirmation from ITR verification | A message confirming successful e-filing is flashed on your screen. The acknowledgement form – ITR-Verification is generated and the same can be downloaded. It is also emailed to your registered email id. |
| Step 9 | E-verify Return | You can e-verify the return through any one of the below six modes: 1) Netbanking, 2) Bank ATM, 3) Aadhaar OTP, 4) Bank Account Number, 5) Demat Account Number, 6) Registered Mobile Number & E-mail id. E-verification eliminates the need to send a physical copy of the ITR-5 acknowledgement to CPC, Bengaluru |
How to Download Income Tax Return?
It is important to how to file ITR on time, to avoid last minute stress and penalties. Once you have filed your ITR, the income tax verification form is generated by the IT department so that taxpayers can verify the validity and legitimacy of e-filing. These are applicable only if you have filed your returns without a digital signature.
The income tax return verification form can be downloaded in easy steps.
Select option Income tax returns
Details of all the years for which returns are filed will be displayed
1.) Click on the acknowledgement numberto download the ITR-V.
2.) Begin the download by selecting ‘ITR-V Acknowledgment’
3.) To open the downloaded document, enter your password to open the document. The password is your PAN number in lower letters along with your birthdate.
For example-
PAN – ASIJP2345P
Birthdate – 31/12/1980
Password – asijp2345p31121980
Documents required to fill ITR
It is important to have all the relevant documents handy before you start your e-filing process.
How to check ITR status online?
Once you have filed your income tax returns and verified it, the status of your tax return is ‘Verified’. After the processing is complete, the status becomes ‘ITR Processed’.
If you wish to know which stage your tax return is after filing it and want to check your ITR status online, here’s how you can do it in easy steps.
Option One
Without login credentials
You can click on the ITR status tab on the extreme left of the e-filing website.
You are then directed to a new page where you have to fill in your PAN number, ITR acknowledgement number and the captcha code.
Once this is done, the status of your filing will be displayed on the screen.
Option Two
With login credentials
Login to the e-filing website.
Click on the option ‘View Returns/Forms’
From the dropdown menu, select income tax returns and assessment year
Once this is done, the status of your filing (whether only verified or processed) will be displayed on the screen.
Keeping the Income Tax Department informed about your income and taxability will keep you on the right side of the law and prevent any blocks in your financial competency. Now that you know whether or not you compulsorily have to file your ITR, you need to ensure that you complete the process before the deadline every year.
A lot of individuals seem to think that filing tax returns is voluntary and therefore dismiss it as unnecessary and burdensome. As we will see, this is not a very healthy perspective on tax-filing. Filing tax returns is an annual activity seen as a moral and …
India’s Income Tax Laws are framed by the Government The Government imposes a tax on taxable income of all persons who are individuals, Hindu Undivided Families (HUF’s), companies, firms, LLP, association of persons, body of individuals, local authority and any other artificial juridical person. According to these …
For several years, many people purchased life insurance simply as a tax-saving method. The truth is, life insurance plays a crucial role in every sound financial plan. Before we create financial plans for the upcoming financial year, let’s better understand the new rules and regulations. In February 2023, the finance minister outlined the budget for the upcoming year, which included a few changes to the new tax regime. The finance minister reduced the number of tax slabs and extended the standard deduction to the salaried class and pensioners as well.
Let’s better understand the Income Tax slabs under Union Budget 2023.
| Income Tax Slab | Income Tax Rates Applicable for FY 2023-24 as per the new regime for HUF and all Individuals |
| <₹ 3,00,000 | No Tax |
| ₹ 3,00,001 to ₹ 6,00,000 | 5% |
| ₹ 6,00,001 to ₹ 9,00,000 | 10% |
| ₹ 9,00,001 to ₹ 12,00,000 | 15% |
| ₹ 12,00,001 to ₹ 15,00,000 | 20% |
| >₹ 15,00,000 | 30% |
The old tax regime differentiates between three age cohorts of tax-paying individuals.
Income Tax Slabs for Individuals below 60 years and HUF:
| Income Tax Slab | Tax Rates |
| <₹ 2,50,000 | NIL |
| ₹ 2,50,001 to ₹ 5,00,000 | 5% |
| ₹ 5,00,001 to ₹ 10,00,000 | 20% |
| >₹ 10,00,000 | 30% |
NOTES:
Income Tax Slabs for Individuals aged between 60 years and 80 years :
| Income Tax Slab | Tax Rates |
| <₹ 3,00,000 | NIL |
| ₹ 3,00,001 to ₹ 5,00,000 | 5% |
| ₹ 5,00,001 to ₹ 10,00,000 | 20% |
| >₹ 10,00,000 | 30% |
NOTES:
Income Tax Slabs for Individuals above 80 years:
| Income Tax Slab | Tax Rates |
| <₹ 5,00,000 | NIL |
| ₹ 5,00,001 to ₹ 10,00,000 | 20% |
| >₹ 10,00,000 | 30% |
NOTES:
Surcharge applicable as per tax rates are listed below across all categories mentioned above:
The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.
The maximum rate of surcharge on tax payable on dividend income or capital gain referred to in Section 112, shall be 15%. The surcharge rate for an Association of Persons (AOP) with all members as a company, shall be capped at 15%.
It is to be noted that relevant marginal relief from surcharge is available.
2023 Union Budget Personal Income Tax Highlights
Frequently Asked Questions (FAQ)
As per income tax laws, filing income tax returns is mandatory for individuals whose total income during the financial year exceeds the basic exemption limit of more than the gross total income of ₹ 2,50,000 under the old regime or ₹ 3,00,000 under the new regime. You will be attracting penalties by not filing returns. Also, it will hamper your chances of getting a loan, when you apply for a visa for travel purposes, or even property registration.
Do note that the exemption limit for an individual depends on his/her age. Citizens will have to inform the government mandatorily about income earned irrespective of the tax regime in Financial Year 2023-24.
Individual taxpayers have to pay tax based on their age and income. For the financial year 2023-24, income tax slab rates are divided into the old regime, which has higher tax rates with three tax slabs and different deductions for senior and super senior citizens, and the revised new regime with lower tax rates.
A standard deduction is a flat deduction of ₹ 50,000 to individuals earning a salary or pension income under the head “Salaries”, irrespective of expenses or investments by the individuals. From FY 2023-2024, this deduction can be claimed under both regimes.
Section 80C is a popular section among taxpayers as it allows to reduce taxable income up to a maximum deduction of ₹ 1.5 lakh by making tax-saving investments like life insurance premium or incurring eligible expenses like school tuition fees which are available only for Individuals and HUFs. However, deduction is not allowed if the taxpayer opts for the new tax regime.
| Existing New Regime | Proposed New Regime | ||
| Income | Tax | Income | Tax |
| < ₹ 2,50,000 | NIL | < ₹ 3,00,000 | NIL |
| ₹ 2,50,001 to ₹ 5,00,000 | 5% | ||
| ₹ 5,00,001 to ₹ 7,50,000 | 10% | ₹ 3,00,001 to ₹ 6,00,000 | 5% |
| ₹ 7,50,001 to ₹ 10,00,000 | 15% | ₹ 6,00,001 to ₹ 9,00,000 | 10% |
| ₹ 10,00,001 to ₹ 12,50,000 | 20% | ₹ 9,00,001 to ₹ 12,00,000 | 15% |
| ₹ 12,50,001 to ₹ 15,00,000 | 25% | ₹ 12,00,001 to ₹ 15,00,000 | 20% |
| > ₹ 15,00,001 | 30% | > ₹ 15,00,001 | 30% |
The Union Budget 2023 reduces the number of tax slabs under the new regime. We can compare the current new regime with the proposed new regime as follows:
inclusions and exclusions
Taxpayers choosing to file tax under the new tax regime will have to forgo a few exemptions and deductions that were available in the existing old tax regime. Although there are 70 deductions and exemptions that taxpayers need to forgo, below are the most common ones:
What’s not allowed under new tax rate regime?
What’s retained under new tax rate regime?
As per the Income Tax Act, it is mandatory to file ITRs for these entities in India:
Yes, the Income Tax Act allows a standard deduction of ₹ 50,000 to the income taxable under the head ‘Salaries’ for FY 2023-24.
Standard deduction is a tax benefit that can be claimed irrespective of the actual amount spent on Transport Allowance and Medical Allowance and is applicable to individuals earning a salary or pension income. The limit of standard deduction was set at ₹ 50,000.
The exemption under section 80C of the Income Tax Act can be availed of up to ₹1.5 lakh. Section 80C of the Income Tax Act, 1961, helps you save taxes on various investments and expenses you make during the financial year. Fixed Deposits in Bank, Public Provident Fund deposits (PPF), investment in National Pension Scheme (NPS), Employees Provident Fund (EPF) and Equity Linked Savings Schemes (ELSS) are some of the avenues open for you to avail of deductions under section 80C.
However, if you opt for the new tax regime announced in the Union Budget in 2020, Section 80C deductions claimed for provident fund contributions, life insurance premium, school tuition fee for children and various specified investments such as ELSS, NPS, PPF cannot be claimed.
On 1st February 2023, the Finance Minister, Nirmala Sitharaman, outlined the budget for the upcoming fiscal year. The new budget serves as the blueprint for an inclusive and empowered economy. The budget listed seven main priorities, namely: Let’s look at the main highlights of the …