Individuals must file their ITR (Income Tax Return) every year in the circumstance of them having taxable incomes of a range greater than that of Rs. 2.5 Lacs. The rate of income tax slab for the AY 2019 - 20 or the FY 2018 -19 for the salaried individuals has been decided by the Department of Income Tax by the Government of India as follows.

For your information, the financial year begins from the 1st of April and ends on the 31st of March. For example, the financial year 2018 –19 would be 1st April 2018 to 31st March 2019. As for Assessment year, it is the year which immediately follows the financial year, and assesses the income of that financial year. Therefore, for the assessment year 2019 – 20, the income tax that will be counted will range from the 1st of April 2018 to the 31st of March 2019.

So in order to let you in on what you have to pay for your current ITR, this following section will explain to you the new tax brackets for the Assessment Year 2019 - 20 and Financial Year 2018 - 19.

For individuals who are less than sixty years of age, and have taxable income of up to Rs. 2,50,000, tax rate is nil. For those, who are less than sixty years of age, and have a taxable income of a range between Rs. 2,50,000 to Rs. 5,00,000, the rate of taxation is 5%. For those, who are less than sixty years of age, and have a taxable income of a range between Rs. 5,00,000 to Rs. 10,00,000, the rate of taxation is 20%. For those, who are less than sixty years of age, and have a taxable income of a range above Rs. 10,00,000, have a taxation rate of 30%.

For individuals who are aged between sixty years and eighty years, those which have a taxable income of up to Rs. 3,00,000, the rate of taxation will be nil. For those of them having a taxable income ranging between Rs. 3,00,000 to Rs. 5,00,000, would have a taxation rate of 5%. For those having a taxable income ranging between Rs. 5,00,000 to Rs. 10,00,000, would have a taxation rate of 20%. For those of them having a taxable income above Rs. 10,00,000, the rate of taxation will be 30%.

For individuals who are aged above eighty years, those which have a taxable income of up to Rs. 5,00,000, the rate of taxation will be nil. For those of them having a taxable income ranging between Rs. 5,00,000 – Rs. 10,00,000, the rate of taxation will be 20%. For those of them having a taxable income above Rs. 10,00,000, the rate of taxation will be 30%.

Additionally, along with the calculated Income Tax amount, based on the taxation slabs mentioned above, individuals need to pay both Cess and Surcharge.

The surcharge is 10% of the total income tax, whereas total income must exceed Rs.50 Lacs up to Rs.1 Crore.

In the case of the total income exceeding the limit of Rs.1 Cr, the surcharge becomes 15% of the total income tax.

The Health & Education Cess has been newly introduced through the 2018 Budget and accounts for 4% of the Income Tax.

There is a legal penalty for not filing the income tax return in due time. In case you have not filed your income tax return, it would result in you receiving a legal notice from the Department of Income Tax. You will also not be able to obtain the refund regarding the excess TDS that has been deducted.

There will be a penalty interest of 1% for each month, which will get charged until the day the taxes are paid. For income tax returns of the Fiscal Year 2017-18 and onwards, a penalty of Rs. 5,000/- will get charged for the returns that have been filed after the due date but before the time limit of 31st December. If the returns are not filed within the 31st of December, a penalty worth Rs. 10,000/- shall be levied. However, this penalty will be Rs. 1,000/- for those that have incomes up to Rs. 5 Lacs.

Losses that are incurred other than that of house property loss, will not be allowed to be carried forward to subsequent years, to be set off against the future gains.

The due date for the filing of Income Tax Returns for a salaried individual, is on 31st July.

Salaried individuals need to choose between either form ITR-1 or the form ITR-2 based on the specific criteria as detailed in the following section.

Form ITR-1:

When to be used:
This form is to be used when the income source is solely limited to that of salary or pension, one house property and some other sources, with the exclusion of winning from lotteries and race horses.

When not to be used:

The form must not be used for income that exceeds the limit of Rs. 50 Lakhs, if the assessee possesses capital gains from sources that are taxable.

If the assessee has income from any of the sources below, they cannot use this form.
1. Income hailing from a foreign property,
2. Agricultural income which exceeds Rs. 5000
3. Incomes deriving from business or such profession.
4. Incomes deriving from multiple house properties.

Form ITR-2:

Form ITR-2 is to be filed by the individuals who are ineligible for form ITR-1, due to the following reasons :

1. Income that exceeds Rs. 50 Lacs
2. Being in possession of foreign assets and income.
3. Possessing agricultural income of an amount more than Rs. 5,000/-
4. Having capital gains from taxable sources
5. Incomes deriving from business or such profession
6. Incomes deriving from multiple house properties.

Form ITR-2 must not be filed by individuals having income that comes under the head of either Business or that of Profession related proprietorship. ITR-2 forms also cannot be filed in by any company or LLP or any other kinds of legal entities.