Connect with us “The hardest thing in the world to understand is the income tax.” – Albert Einstein.
Personal tax is the tax you pay on the income you earn and the returns you make from investments. This includes salary from your employer, profits from your business, earnings from rental properties, and gains from investments. It’s a keyway to contribute to public services and government functions, ensuring that your financial contributions are in line with your earnings. Understanding how personal tax works helps you manage your finances more effectively and ensures you’re meeting your obligations.
Understanding personal taxes can be complex, but with the right guidance, it can also be straightforward and manageable. At Mercurius, we are dedicated to helping you understand and meet your tax obligations with ease. Our experienced professionals provide personalized tax services tailored to your unique financial situation. Whether you’re planning for the future, managing your investments, or simply ensuring compliance, we’re here to assist you every step of the way. Let us take the stress out of tax season and help you make informed decisions to optimize your financial health.
Due Dates of ITR
Tax Return Filing Deadline: Returns for income earned from April 1 to March 31 must be filed by July 31 of the following year.
Filing your taxes on time is essential to avoid penalties and interest charges. Our experts at Mercurius provide a comprehensive calendar of important tax deadlines, including dates for filing returns, making tax payments, and submitting any required documents. Our tax consultation services ensure you receive timely reminders and notifications, helping you stay compliant with tax laws and maintain peace of mind.
Applicability of ITR
The deciding factor in the amount of tax to be charged on your income is determined by the tax slabs. Tax advisors wisely suggest knowing how much tax you owe and how to optimize your tax liability within the legal framework, whether you fall under the introductory slab rates or benefit from special exemptions. Tax consultants at Mercurius can guide you through the intricacies of tax calculations.
Old Tax Regime v/s New Tax Regime
The tax slabs and rates in the old and new tax regimes are different. The old regime allows various deductions and exemptions. The new regime offers lower rates of taxes but permits limited deductions and exemptions.
Under the Old Tax Regime Slab Rates:
| Income Slab | Tax Rate |
|---|---|
| Up to Rs. 2,50,000 | Nil |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Under New Tax Regime Slab Rates:
| Income Slab | Tax Rate |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to Rs. 7,00,000 | 5% |
| Rs. 7,00,001 to Rs. 10,00,000 | 10% |
| Rs. 10,00,001 to Rs. 12,00,000 | 15% |
| Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs. 15,00,000 | 30% |
Advance Tax
As per the Indian Income Tax Act, 1961, Advance tax, also known as “pay-as-you-earn” tax, is a system in which taxpayers are required to pay their tax liability in installments rather than in a lump sum at the end of the fiscal year. Many countries, including India, follow this system.
Here’s a brief overview of advance tax under personal tax in India:
Applicability
Advance tax is applicable to individuals, Hindu Undivided Families (HUFs), including salaried employees, self-employed professionals, freelancers, and businesses, whose tax liability after deducting TDS (Tax Deducted at Source) exceeds Rs. 10,000 in a financial year.
Due Dates
Advance tax is calculated based on income earned from April to March and is paid in four installments throughout the financial year. The payments are typically due on specific dates, spread across the year. Failure to meet these deadlines may result in interest charges and penalties.
Calculation
Professional tax consultation is required to estimate the total income for the financial year and calculate the tax liability. Income tax services ensure timely payment of advance tax in installments as per the prescribed schedule.
Installments
Advance tax is paid in four installments as follows:
- On or before June 15: 15% of the total advance tax liability.
- On or before September 15: 45% of the total advance tax liability less the amount paid in the first installment.
- On or before December 15: 75% of the total advance tax liability less the amount paid in the first and second installments.
- On or before March 15: 100% of the total advance tax liability less the amounts paid in the earlier installments.
Payment Modes
Advance tax can be paid online, such as through debit cards for selected banks, internet banking, or at designated bank branches. Our online tax consultants can provide professional guidance for all payment modes of advance tax.
Penalties
Failure to pay advance tax or underestimating the advance tax liability can attract interest under Section 234B and Section 234C of the Income Tax Act, 1961.
Heads of Income
Income is classified into different heads for tax purposes, each subject to specific rules and provisions. We will discuss the various heads of income, including salary, house property, business or profession, capital gains, and other sources. Our detailed explanations will help you understand how to categorize your income correctly and report it accurately in your tax return. Whether you’re a salaried employee, a self-employed individual, or a business owner, we will provide guidance tailored to your unique income sources and circumstances.
| Head of Income | Description |
|---|---|
| Income from Salary | Earnings from employment, including salary, wages, bonus, commissions, and allowances. |
| Income from House Property | Income generated from renting out property, such as residential, commercial buildings. |
| Business/Profession | Profits derived from self-employment, business or professional activities, including services or goods sold. |
| Capital Gains | Profits or losses from the sale or transfer of capital assets, such as stocks, real estate, or bonds or any other investments. |
| Other sources(Income) | Additional income sources like dividends, interest, gifts, lottery winnings, or any other earnings. |
Tax Exemptions and Deductions
Strategic tax planning is key to minimizing your tax burden and maximizing your savings. Consulting tax services at Mercurius will help you identify eligible exemptions, deductions, and credits available under the tax laws to reduce your taxable income. From investments in tax-saving instruments to claiming expenses and allowances, tax advisory services will enable you to explore various avenues for legally optimizing your tax liability.
Our personalized tax planning strategies consider your financial goals, risk tolerance, and future tax implications, ensuring you make informed decisions that align with your objectives.
ITR Litigations
We are Income tax consultants in India, experts in handling complex tax disputes and litigations. Our team of tax advisors will keep you informed about potential tax issues and disagreements, helping you navigate through audits, assessments, and appeals effectively. We will discuss common areas of contention, such as interpretation of tax laws, transfer pricing, and international tax matters. With our guidance, you will be equipped to address tax disputes proactively and protect your financial interests.
Why Choose Mercurius for Personal Tax Services?
Expertise
Mercurius's tax consultants are experienced tax professionals who are well-versed in the latest tax laws and regulations. Clients can depend on us for accurate, precise, and up-to-date advice to ensure compliance and optimize their taxes.
Personalized Service
We understand that every individual’s financial requirements are unique. Our services are tailored to match your specific needs and objectives.
Proactive Approach
With tax consulting services at Mercurius, you stay a step ahead of changes in tax legislation, and we proactively advise you on how to manage your tax affairs.
Comprehensive Support
We provide a full range of personal tax services, such as filing tax returns, preparation for tax planning, and dispute resolution.
Client-Centric Focus
Your satisfaction is our priority. We are committed to providing exceptional service and building long-term relationships with our clients.
Maximize Returns. Minimize Hassles – File Your ITR with Experts!
Mercurius combines deep expertise with personalized support to simplify your tax journey.
Book a call – and let’s get your returns done right.
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FAQs
A tax rebate is a reduction in the actual tax payable, not the taxable income. It helps individuals lower their final tax liability.
Tax rebates in India are outlined in Section 87A, which allows residents with an income below ₹7,00,000 to enjoy zero tax liability under the new tax regime. However, for FY25-26, this limit is exceeded to ₹12,00,000.
While others, benefitting the senior citizen's interest income by availing benefits through Section 80 TTB, and eligible startups have a specified exemption in the form of Section 80-IAC under the old tax regime.
Basic exemption limit, according to the Income-tax Act, is the maximum amount of income for which no tax needs to be paid.
For an individual who has not crossed the age of 60 years under the old tax regime, the basic exemption limit is Rs 2.5 lakh. Under the same tax regime, the basic exemption limit for senior citizens (60-80 years) is Rs 3 lakh, and for super senior citizens (80 years and above), it is Rs 5 lakh.
The new tax regime is now independent of age. The basic exemption limit stands at Rs 3 lakh, irrespective of age.
Not all individuals in India are required to file income tax returns (ITR). The obligation depends on several factors, including whether your income surpasses the basic exemption limit, your age, and the source of your income, such as income from virtual digital asset sales. You may also opt to file an ITR voluntarily to receive a refund of TDS.
If the assessment year has already passed, you can still file a return under Section 139(8A) using the updated return option.
- You can file it within 24 months from the end of the relevant assessment year.
- Can be filed even if you didn’t file any return earlier.
- Allowed only once per assessment year.
- You cannot claim a refund or declare a lower income using this return.
The new tax regime allows for employer contributions to the NPS under Section 80CCD (2), a standard deduction of ₹75,000 for salaried individuals, and family pension deductions of ₹15,000. All other deductions under Chapter VI-A are disallowed.
While filing your ITR, you can switch back to the old tax regime by selecting it in the ITR form under the “Tax Regime” section.
The taxpayer who has opted for the old tax regime is required to file Form 10-IEA, which is meant for individuals earning income from a profession or business and typically file ITR-3 or ITR-4.
Under the old tax regime, several allowances are eligible for tax exemption, subject to conditions specified in the Income Tax Act. These include:
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Conveyance Allowance
- Children’s Education Allowance – up to ₹100/month per child (max. 2 children)
- Hostel Expenditure Allowance – up to ₹300/month per child
Our tax consultants at Mercurius can help you maximize your eligible exemptions while ensuring compliance.
A person who is not an Indian citizen is considered a foreign national. The taxation of individuals, including foreign nationals, depends on the source of their income and their residential status, regardless of citizenship. Residential status is assessed based on the number of days spent in India during the previous financial year (April 1 to March 31), regardless of the reason for the stay.
A tax refund is the money given back by the government to an individual when they have paid more taxes than required for a particular financial year.
This happens when your total tax liability is less than the amount you have paid through:
- Tax Deducted at Source (TDS)
- Advance Tax Payments
- Self-assessment Tax Payments
- Tax savings from credits or deductions that lower your liability under the old tax regime (e.g., Section 80C, 80D, etc.)
Certain types of income are excluded when calculating personal income for tax purposes. These may include:
- Tax-exempt government benefits (like soe social welfare schemes)
- Certain types of agricultural income (as per Indian tax laws)
- Specific investment income that qualifies for exemption
- Business income not classified as personal (e.g., if routed through a company or LLP)
If an individual fails to file their income tax return before the due date, they may face the following:
- Late Filing Penalties: A penalty based on a percentage of unpaid tax, plus interest.
- Delayed Refunds: Refunds may be delayed or forfeited
- Legal Consequences: Risk of audits, tax liens, or even criminal charges in severe cases
- Loss of Benefits: Ineligibility for certain tax credits or deductions
- Inability to Carry Forward Losses: Missing out on tax loss carry-forwards or set-offs
Tax Planning is a legitimate and proactive approach where businesses and individuals structure their finances to maximize tax benefits within the framework of the law.
This includes strategies like claiming eligible deductions, exemptions, and rebates.
Tax Avoidance involves exploiting legal loopholes or grey areas in tax laws to reduce tax liability. While technically legal, it is often viewed as unethical and may attract scrutiny from tax authorities.
Tax Evasion is illegal and punishable under the law. It includes deliberate actions such as concealing income, inflating expenses, or falsifying documents to avoid paying due taxes.
At Mercurius, we specialize in ethical and
strategic tax planning that ensures full compliance with Indian and international tax laws.
Yes, tax evasion can be prevented through several measures:
- Strict Enforcement: Strengthening laws and regulations, along with thorough audits, can deter evasion
- Transparency: Encouraging transparency in financial transactions and requiring detailed reporting can reduce opportunities for concealment
- Awareness and Education: Educating taxpayers on the consequences of tax evasion and the benefits of compliance
- Use of Technology: Implementing advanced technology, such as data analytics and AI, to detect inconsistencies and suspicious activities
- International Cooperation: Collaborating with other countries to prevent cross-border tax evasion, such as through information exchange agreements.
Yes, tax evasion in India carries severe penalties, including huge fines, interest on unpaid taxes, and criminal prosecutions. The severity of the penalty depends on the nature and extent of the evasion.
