Question 1

What is the difference between old and new tax regime?

Accepted Answer

The new tax regime offers lower tax rates but doesn't allow most deductions and exemptions. Old regime has higher rates but allows deductions under 80C, 80D, HRA, etc. New regime is default from FY 2023-24, but you can opt for old regime while filing ITR.

Question 2

What is the basic exemption limit for FY 2024-25?

Accepted Answer

For individuals below 60 years: ₹2.5 lakh (old regime) or ₹3 lakh (new regime). For senior citizens (60-80 years): ₹3 lakh. For super senior citizens (above 80): ₹5 lakh.

Question 3

How is tax calculated on my salary?

Accepted Answer

Gross salary minus standard deduction (₹50,000) and other eligible deductions gives taxable income. Tax is then calculated based on income tax slabs. TDS is deducted by employer monthly and reflected in Form 16.

Question 4

What is Form 16 and when do I get it?

Accepted Answer

Form 16 is a TDS certificate issued by your employer showing salary paid and tax deducted. Part A has TDS details, Part B has salary breakup. Employers must issue it by May 31st for the previous financial year.

Question 5

Do I need to file ITR if my income is below taxable limit?

Accepted Answer

Not mandatory if total income is below basic exemption limit and no TDS was deducted. However, it's advisable to file ITR for loan applications, visa processing, and to carry forward losses.

Question 6

What is the penalty for late filing of ITR?

Accepted Answer

If filed after July 31 but before December 31: ₹5,000 penalty (₹1,000 if income below ₹5 lakh). After December 31: ₹10,000 penalty. Interest of 1% per month on unpaid tax also applies.

Question 7

Can I revise my ITR after filing?

Accepted Answer

Yes, you can revise ITR if filed before due date. Revised return can be filed anytime before December 31 of assessment year or before completion of assessment, whichever is earlier.

Question 8

What is advance tax and who needs to pay it?

Accepted Answer

If your tax liability exceeds ₹10,000 in a year, you must pay advance tax in 4 installments during the year: 15% by June 15, 45% by Sept 15, 75% by Dec 15, 100% by March 15.

Question 9

What investments qualify for Section 80C deduction?

Accepted Answer

PPF, EPF, ELSS mutual funds, NSC, life insurance premiums, 5-year bank FDs, home loan principal, tuition fees, Sukanya Samriddhi, and NPS Tier-1 (up to ₹1.5 lakh limit under 80C).

Question 10

How much can I save under Section 80C?

Accepted Answer

Maximum ₹1.5 lakh deduction under Section 80C. This reduces your taxable income. Tax saved = ₹1.5 lakh × your tax slab rate. For 30% slab, you save ₹46,800 in taxes (including cess).

Question 11

What is the limit for health insurance deduction under 80D?

Accepted Answer

₹25,000 for self/spouse/children, plus ₹25,000 for parents (₹50,000 if parents are senior citizens). Maximum total deduction: ₹1 lakh (if both you and parents are senior citizens).

Question 12

Can I claim both 80C and 80CCD(1B)?

Accepted Answer

Yes! 80C allows ₹1.5 lakh deduction for various investments including NPS. Additionally, 80CCD(1B) allows extra ₹50,000 deduction exclusively for NPS Tier-1, totaling ₹2 lakh deduction.

Question 13

Is standard deduction available in new tax regime?

Accepted Answer

Yes, standard deduction of ₹50,000 from salary income is available in both old and new tax regimes from FY 2023-24. It's automatically deducted, no proof required.

Question 14

Can I claim home loan interest deduction?

Accepted Answer

Yes, under Section 24(b): up to ₹2 lakh for self-occupied property. Additional ₹1.5 lakh under 80EEA for first-time home buyers (loan sanctioned 2019-2022). Available only in old tax regime.

Question 15

What is Section 80E for education loan?

Accepted Answer

Interest paid on education loan for higher studies is fully deductible (no upper limit) under 80E for 8 years or until interest is fully repaid, whichever is earlier. Principal repayment not deductible.

Question 16

How is HRA exemption calculated?

Accepted Answer

HRA exemption is minimum of: (a) Actual HRA received, (b) 50% of salary for metro cities or 40% for non-metro, (c) Rent paid minus 10% of salary. Not available in new tax regime.

Question 17

Can I claim HRA if I live with my parents?

Accepted Answer

Yes, if you pay rent to parents and they report it as rental income in their ITR. Rent agreement and payment proof (bank transfer) required. Parents should own the property.

Question 18

Can I claim both HRA and home loan deduction?

Accepted Answer

Yes, if you own a house in one city but live in rented accommodation in another city for work. HRA for rented house and home loan benefits for owned property can be claimed together.

Question 19

What if I don't receive HRA but pay rent?

Accepted Answer

You can claim deduction under Section 80GG: minimum of ₹5,000/month, 25% of total income, or rent paid minus 10% of total income. Not available if you or family owns property where you live/work.

Question 20

What is ELSS and how does it work?

Accepted Answer

Equity Linked Savings Scheme - tax-saving mutual funds with 3-year lock-in. Invests in stocks, market-linked returns. Qualifies for 80C deduction up to ₹1.5 lakh. Shortest lock-in among 80C options.

Frequently Asked Questions

Income Tax

Deductions

HRA

Investments

Tax Regimes

Capital Gains

Calculators

General

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Tax Glossary

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Frequently Asked Questions

Income Tax

What is the difference between old and new tax regime?

What is the basic exemption limit for FY 2024-25?

How is tax calculated on my salary?

What is Form 16 and when do I get it?

Do I need to file ITR if my income is below taxable limit?

What is the penalty for late filing of ITR?

Can I revise my ITR after filing?

What is advance tax and who needs to pay it?

Deductions

What investments qualify for Section 80C deduction?

How much can I save under Section 80C?

What is the limit for health insurance deduction under 80D?

Can I claim both 80C and 80CCD(1B)?

Is standard deduction available in new tax regime?

Can I claim home loan interest deduction?

What is Section 80E for education loan?

HRA

How is HRA exemption calculated?

Can I claim HRA if I live with my parents?

Can I claim both HRA and home loan deduction?

What if I don't receive HRA but pay rent?

Investments

What is ELSS and how does it work?

Should I invest in PPF or NPS?

What is the difference between EPF and VPF?

How are mutual fund returns taxed?

What is SIP and how much should I invest?

Is NPS withdrawal taxable?

Tax Regimes

Which regime is better for me - old or new?

Can I switch between tax regimes every year?

What deductions are allowed in new tax regime?

Is rebate under 87A available in new regime?

Capital Gains

How are capital gains from stocks taxed?

What is indexation benefit?

How can I save tax on property sale?

Do I pay tax on selling gold/jewelry?

Calculators

How accurate is the tax calculator?

What is the SIP calculator and how to use it?

Can I save my calculations?

How do I calculate HRA exemption?

General

What documents do I need to file ITR?

What is Form 26AS?

How long does ITR refund take?

What is TDS and when is it deducted?

Do senior citizens get any tax benefits?

Can I claim deduction for donations?

What is surcharge and who needs to pay?

How to link Aadhaar with PAN?

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Tax Glossary

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