🏛️ Taxes in India — Income Tax Guide

Understanding Income Tax — Complete Guide FY 2026-27

Income tax is a direct tax levied by the Central Government on your annual income. Whether you’re salaried, a freelancer, or a business owner — understanding how it works helps you file correctly, claim every deduction you deserve, and avoid costly penalties. Updated for FY 2026-27 (AY 2027-28).

▶ What is Income Tax? Basics & Applicability

Income tax is levied under the Income-tax Act, 1961 (and the new Income-tax Act, 2025 applicable from AY 2026-27). It applies to all persons — individuals, HUFs, firms, companies, and trusts — who earn income above the basic exemption limit in India.

• 5 Heads of Income: Salaries | House Property | Business & Profession | Capital Gains | Other Sources
• Residential Status matters: Resident & Ordinarily Resident (ROR) — taxed on global income; NRI — taxed only on India-sourced income
• PAN mandatory: Required for all taxpayers; Aadhaar-PAN linking compulsory for filing returns
• Source: incometax.gov.in — official portal for filing, refunds, and notices

🔷 New vs Old Tax Regime — FY 2026-27

🔷 Key Deductions under Chapter VI-A (Old Regime)

• 📋 Section 80C (up to ₹1.5L): PPF, ELSS mutual funds, EPF, NSC, 5-year FD, life insurance premium, tuition fees, home loan principal
• 📋 Section 80CCD(1B) (₹50,000 extra): NPS (National Pension System) — additional deduction over 80C limit
• 📋 Section 80D: Medical insurance premium — ₹25,000 (self+family); ₹50,000 if parents are senior citizens
• 📋 Section 80G: Donations to approved funds — 50% or 100% deduction (check PM CARES, CM Relief, NGOs)
• 📋 Section 80TTA/TTB: Interest from savings account — ₹10,000 (individuals <60 yrs); ₹50,000 (senior citizens on all interest)
• 📋 Section 24(b): Home loan interest — up to ₹2L on self-occupied property; unlimited for let-out property
• 📋 Section 80E: Education loan interest — 8 years deduction, unlimited amount

🔷 How to File ITR Online — Step by Step

• 1️⃣ Login: Go to incometax.gov.in → Login with PAN + password → e-File → Income Tax Returns → File ITR
• 2️⃣ Choose ITR Form: ITR-1 (Sahaj) — salaried with income up to ₹50L; ITR-2 — capital gains; ITR-3 — business income; ITR-4 — presumptive
• 3️⃣ Pre-filled data: Portal auto-fills salary (from Form 16), TDS (from Form 26AS), interest (from AIS) — verify everything carefully
• 4️⃣ Select Regime: Choose New or Old regime — the portal shows your tax under both to help you decide
• 5️⃣ Enter deductions: Add 80C investments, 80D insurance, home loan interest etc. (old regime only)
• 6️⃣ Compute tax: Portal calculates automatically — pay any balance tax using Challan 280 before filing
• 7️⃣ E-Verify: Verify via Aadhaar OTP, net banking, or DSC — mandatory within 30 days of filing
• 📅 Due Date: 31st July for individuals (non-audit); 31st October for audit cases

✅ End: Income Tax Refund — Status & Timeline

• Refund = TDS deducted − Final tax liability: If employer deducted more TDS than your actual tax, you get a refund
• Timeline: Usually within 7–30 days of e-verification for ITR-1/ITR-4; 30–90 days for complex returns
• Track Status: incometax.gov.in → My Account → Refund/Demand Status OR NSDL TIN NSDL website
• Refund Banker: SBI disburses all IT refunds — ensure your bank account (pre-validated) is linked to PAN
• Interest on Refund: If refund is delayed beyond due date, you earn interest @ 6% p.a. under Section 244A
• Refund Failure: If bank account not validated or IFSC incorrect, refund is returned — update details on portal and re-request