Income Tax Return Filing Deadline Extended till Dec 31 - Check These 5 FAQs About ITR For FY2019-20

Under the new tax regime, the 5 FAQs will help in finding out which individuals are required to mandatorily file ITR under tax rules.

(Representative Image/ Getty)

New Delhi: In a move to ease down the financial burden due to the ongoing Coronavirus pandemic, the government recently extended the deadline to file income tax return by “Individual Taxpayers” till December 31, 2020, and January 31, 2021 for those whose accounts need to be audited for the financial year 2019-2020. Individuals taxpayers are required to file income tax returns in order to inform the government about total income earned during a particular year and whether taxes have been paid on that in a timely manner. With a billion-plus population, it may be noted that large chunk of people in the country still do not file income tax, which results in losses to the government. 5 FAQs About the Income Tax Return for the Financial Year 2019-20. 1-What is the New tax regime for FY20-21? With the new tax regime of FY20-21 tax return filing, individuals have two regimes to choose from. An individual can opt for the existing tax regime where they can claim tax exemptions such as HRA, leave travel allowance, and deductions under various sections of the Income Tax Act. While individuals can also opt for the new tax regime under which most tax exemptions and deductions cannot be claimed, but taxpayers can enjoy a lower tax rate. It is worth mentioning that the base exemption limit will depend on the tax regime chosen by an individual. Under the new regime, the basic exemption limit for all taxpayers — irrespective of age — will be Rs 2.5 lakh. Simply put, if an individual’s gross income exceeds Rs 2.5 lakh, then he/she will have to file ITR mandatorily. 2-Who needs to file ITR mandatorily? Not every earning individual is entitled to file ITR in the country, according to Income Tax laws.  Only those individuals whose income exceeds the basic exemption limit (Rs 2,50,000) may not file ITR. However, in order to maintain transparency, it is recommended for every earning individual to file income tax returns. 3- What’s the age limit exemption? Not every earning individual who’s earning Rs 2.5 lakhs, the basic exemption limit for any individual varies with age. For FY 2019-20, the basic exemption limit is Rs 2.5 lakh for individuals aged below 60 years, Rs 3 lakh for individuals aged between 60-80 years and, Rs 5 lakh for individuals aged 80 years and above. 4- What are the tax slabs under the new tax regime? As per the new tax regime introduced by the Union Budget 2020-21, individuals earning up to Rs 2.5 lakhs are exempted from the taxes, individuals earning from Rs 2.5 lakhs to Rs 5 lakhs will be levied with 5%, while the rate goes up at 10% for those earning between Rs.5 to Rs 7.5 lakhs. For those earning between Rs 7.5 lakhs to Rs 10 lakhs will be shelling out 15%, with individual earning between Rs 10 to Rs 12.5 lakh the tax rate stands at 20%, 25% for those earning between Rs 12.5 lakhs to Rs 15 lakhs and 30% for individuals earning above Rs 15 lakhs. 5- What are the exceptions to the new tax regime? There are some exceptions where individuals may still need to file income tax returns even if total income — before taxes or other deductions — does not exceed the basic exemption limit. For individuals who have spent an amount of Rs 2 lakh or more for travel to a foreign country has to file returns even if gross income does not exceed the basic exemption limit. Individuals will also have to file income tax returns if an aggregate amount of Rs 1 crore or more has been deposited in one or more current accounts maintained with banks. It is also mandatory for individuals to file ITR if the person has paid an electricity bill exceeding Rs 1 lakh in a single bill irrespective of gross income. Any resident individual who has a source of foreign income, assets, or any account outside India is also required to file ITR returns. ITR will also have to be mandatorily filed if an individual’s gross income exceeds the exemption limit before claiming tax exemption on capital gains under Section 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB.