Income Tax

Tax Rebates are Higher this Year

Tax Rebates are Higher this Year

Last Updated : Feb. 28, 2024, 5:43 p.m.

Get ready for a refund as tax rebates reach new heights this year! In the old income tax regimes, the rebate under Section 87A for 2022-23 and 2023-24 remains consistent, offering eligible Indian residents (income up to ₹5 Lakh) a valuable tax rebate. Meanwhile, the new income tax regime brings even more benefits, providing a ₹25,000 rebate for taxable income up to ₹7 Lakh.

Calculate Your Savings: Tax Rebates this Year

Understanding how to calculate tax rebates is essential for taxpayers aiming to optimize their best tax saving schemes . Here’s a step-by-step guide to help you navigate through the process:

  1. Begin by determining your taxable income for the relevant financial year. This includes income from various sources, such as salary, business profits, and investments. Ensure that you have a clear picture of your total taxable income before proceeding.
  2. Verify whether you meet the eligibility criteria for claiming a tax rebate. For traditional income tax regimes, individuals with income up to ₹5 Lakh are eligible for the rebate under Section 87A. In the new income tax regime, those with taxable income up to ₹7 Lakh can avail a rebate of ₹25,000.
  3. Calculate your tax liability based on the applicable income tax slabs. Take into account deductions and exemptions that apply to your specific situation. The income tax slabs may vary depending on your age and other factors, so refer to the latest tax slabs for accurate calculations.
  4. If you qualify for a tax rebate, deduct the eligible rebate amount from your calculated tax liability. For example, in the new income tax regime, individuals with taxable income up to ₹7 Lakh can subtract ₹25,000 from their tax liability.
  5. Ensure that you have the necessary documentation to support your claim for the tax rebate. Keep records of your income, deductions, and any other relevant financial information.
  6. When filing your tax return, accurately report your income, deductions, and claim the applicable tax rebate. Use the appropriate forms and adhere to the guidelines provided by the tax authorities.

If you find the process complex or have specific financial situations, consider seeking advice from tax professionals or financial advisors. They can provide personalized guidance based on your individual circumstances.

How to File for Tax Rebate?

Filing for a tax rebate in India involves a systematic process.

  1. Confirm if you meet the eligibility criteria for a tax rebate. Rebates are often available based on factors like income level, investments, and specific deductions.
  2. Gather all relevant documents, including your PAN card, Form 16 from your employer, details of investments, and any other documents related to deductions or exemptions.
  3. Calculate your total taxable income for the financial year. Consider income from all sources, including salary, business, and investments.
  4. Understand the sections under which you are eligible for a rebate. Common sections include Section 87A, which provides a rebate for individuals with income up to a certain limit.
  5. If you haven’t already, file your Income Tax Return (ITR) using the appropriate ITR form. Online filing is common and can be done on the official Income Tax Department website or through other authorized platforms.
  6. In the ITR form, there is usually a section where you can claim a rebate. Fill in the necessary details and provide accurate information about your income, deductions, and exemptions.
  7. Verify the details provided in your ITR form. Ensure that all information is accurate and matches the supporting documents.
  8. Submit your ITR form electronically. After submission, you will receive an acknowledgment with a unique acknowledgment number.
  9. Verify your ITR. This can be done electronically through methods such as Aadhar OTP or by sending a signed physical copy to the Centralized Processing Center (CPC) in Bengaluru.

If you are eligible for a tax rebate, the Income Tax Department will process your return. If there is any excess tax paid, you will receive a refund. Alternatively, if there are pending taxes, you will need to pay the balance amount. Regularly check the status of your tax refund on the Income Tax Department’s official website using your acknowledgment number.

Check Refund Status

When it comes to checking the status of your Income Tax refund through the E-Filing website, the process is streamlined for your convenience. Unlike the older portal, the new portal does not have a separate tab for refund status. Instead, simply navigate to the “e-file” tab and click on “View Filed Returns.” By selecting “View Details,” you gain access to the status of both your current and previous filed returns.

For those opting to check their refund status through the TIN NSDL website, the procedure is equally straightforward. Begin by entering your PAN number and selecting the relevant assessment year. Navigate through the TIN NSDL website to access the necessary details.

In conclusion, the news of higher tax rebates in the current fiscal year brings a welcome and optimistic shift for taxpayers. Whether benefiting from unchanged rebates under Section 87A in traditional income tax regimes or embracing the enhanced rebates in the new income tax regime, individuals now have an extended opportunity to optimize their financial strategies. These increased rebates not only signify a potential boost in savings but also reflect the evolving nature of tax regulations aimed at providing relief and encouraging responsible financial planning. As taxpayers navigate the complexities of the tax landscape, the higher rebates offer a silver lining, emphasizing the importance of staying informed and adapting to the changing financial environment for a more secure and rewarding fiscal future.

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