The commencement date for filing Income Tax Returns (ITR) for Assessment Year 2023-24, based on the financial year 2022-23, is anticipated to begin soon.
How is it slightly different for salaried individuals?
Ideally, the ITR filing process should begin on April 1. It is essential to observe that salaried taxpayers usually file their tax returns based on the Tax Deducted at Source (TDS) certificate, also known as Form 16, received from their employers. The employers generally issue Form 16 during the first half of June. Consequently, salaried workers may start filing their ITR from mid-June 2023 onwards until the deadline of July 31, 2023. After obtaining this TDS certificate, salaried taxpayers must verify the details and file their returns accordingly.
Is it possible to switch to a different tax regime during the process of filing the Income Tax Return (ITR)?
Indeed, salaried workers have the option to modify their tax regime while filing their Income Tax Return (ITR). However, presently, they need to inform their employers about the tax regime they intend to choose for FY 2023-24. This step is significant, as per the Central Board of Direct Taxes (CBDT) and tax professionals, since it will enable the employers to deduct Tax Deducted at Source (TDS) on salary according to the tax regime selected by the employee.
Salaried workers can switch between the old and new tax regimes annually, but they must notify their employers about their preferred tax regime at the start of the fiscal year. If they fail to do so, Tax Deducted at Source (TDS) will be deducted under section 192 of the Income Tax (IT) Act based on the default tax regime, i.e., the new tax regime under section 115BAC of the IT Act. However, the final decision on the tax regime can get made while submitting the tax return under section 139(1) of the IT Act.
Under the old tax regime, there are no limitations on claiming tax deductions and exemptions. This means that a taxpayer who invests in tax-saving instruments pays premiums on life or medical insurance policies, and school fees for their children, and repays home loan principal can claim the benefits of deductions for house rent allowance, leave travel allowance, etc.
Taxation on the freelance income
Income earned in India through the utilization of intellectual or manual skills is classified as professional income and is subject to taxation under the category of “Profits and Gains from Business or Profession”.
The Income Tax Return (ITR) form to be used by freelancers depends on their income and profession. If they fall under the professions listed in Section 44ADA of the Income Tax Law, and have business income under Section 44AD or 44AE, salary, pension, or any other income exceeding Rs. 50 lakhs, they must file their taxes using ITR-4. This form is specifically designed for individuals who opt for presumptive income schemes under Sections 44AD and 44AE of the Income Tax Law.
Taxpayers should file their returns as soon as possible to avoid any additional interest charges. You can alleviate your worries about ITR filing by taking advantage of online platforms that offer easy, customized processes at affordable prices.