ITR stands for Income Tax Return. It is a form through which taxpayers in India report their income, expenses, taxes paid, and tax liability for a financial year. There are seven types of ITR, namely ITR-1 to ITR-7. The type of ITR a taxpayer needs to file differs based on her income sources, level of income and the residential status. Therefore, choosing of the right ITR form becomes crucial.The ITR due date for non-tax audit cases for FY 2024-25 (AY 2025-26) is September 16, 2025.

ITR-1 (Sahaj) is the income tax return form for resident individuals with total income up to Rs. 50 lakh from salary or pension, one house property, and other sources like interest. It can also be used when you have long-term capital gains under Section 112A up to Rs, 1.25 lakh, provided there are no brought forward or carry forward capital losses.However, ITR-1 cannot be used if you have business or professional income, more than one house property, capital gains above the specified limit, foreign assets, or total income exceeding Rs. 50 lakh. In such cases, taxpayers must file other return forms such as ITR-2, ITR-3 or ITR-4.ITR-1 (Sahaj) - Key HighlightsITR-1 is meant for resident individuals onlyTotal income should not exceed Rs.

Section 80C deductions allow taxpayers to reduce their taxable income by investing in specified instruments or making eligible payments. Under Section 80C of the Income Tax Act, individuals and HUFs can claim deductions of up to Rs. 1.5 lakh for investments such as PPF, ELSS, life insurance premiums, NSC, home loan principal repayment, and children’s tuition fees.Section 80C is one of the most widely used tax-saving provisions in India because it covers both investments and essential expenses. By strategically investing in eligible instruments, taxpayers can significantly lower their taxable income while building long-term savings.However, deductions under Section 80C are available only under the old tax regime. Taxpayers opting for the new regime cannot claim these deductions.Section 80C Deductions ListThe following investments and expenses can be claimed as Section 80C Deductions:Life insurance premium paymentsPublic Provident Fund (PPF)Employee Provident Fund (EPF) contributionsEquity Linked Savings Scheme (ELSS) mutual fundsNational Savings Certificate (NSC)Sukanya Samriddhi Yojana (SSY)5 year tax-saving fixed depositsSenior Citizen Savings Scheme (SCSS)Home loan principal repaymentStamp duty and registration charges on property purchaseTuition fees paid for up to two childrenHowever, a combined deduction of up to Rs.

Financial Year (FY) and Assessment Year (AY) are two important terms used in Income Tax, often confused among tax payers. Assessment year comes immediately after the financial year. It is the year in which tax is calculated and paid by the taxpayer. With effect from 1st April 2026, the concept of Assessment Year and Financial Year are replaced by ‘Tax Year’, as per the provisions of the Income Tax Act, 2025.This article explains in detail, the meaning of financial year and assessment year and key differences between them.What is a Financial Year?A Financial Year (FY) is the 12-month period between 1 April and 31 March – the accounting year in which you earn an income.What is the Assessment Year?The assessment year (AY) is the year that comes after the FY. Only in the assessment year, the taxes are calculated and income tax returns are filed. Both FY and AY start on 1 April and end on 31 March. For instance, for FY 2024-25, the assessment year is AY 2025-26.AY and FY for Recent YearsPeriodFinancial YearAssessment Year1 April 2025 to 31st March 20262025-262026-271 April 2024 to 31 March 20252024-252025-261 April 2023 to 31 March 20242023-242024-251 April 2022 to 31 March 20232022-232023-241 April 2021 to 31 March 20222021-222022-231 April 2020 to 31 March 20212020-212021-22What is the Difference Between AY and FY?From an income tax perspective, FY is the year in which you earn an income. AY is the year following the financial year in which you have to evaluate the previous year’s income and pay taxes on it.For instance, if your financial year is from 1 April 2024 to 31 March 2025, then it is known as FY 2024-25. The assessment year for the money earned during this period would begin after the financial year ends – that is, from 1 April 2025 to 31 March 2026.

When a resident taxpayer receives income from a foreign state, the tax will be deducted from the income of the foreign state and such taxpayer is liable for tax in the resident state. In such cases, residents can claim credit for the amount of tax deducted in the foreign state by filing Form 67 with the income tax department. Residents must submit Form 67 before the due date of Income Tax Returns (ITR) filing to claim credit for such taxes. Form 67 is also required to be furnished in case the carry backward of losses of the current year results in the refund of foreign tax for which credit has been claimed in any previous years.As per the provisions of the new Income Tax Rules 2026, Form 67 has been replaced by Form 44.What is Foreign Tax Credit (FTC)?Assume a scenario where a taxpayer is a tax resident of Country A (Residence State) and receives income from Country B (Source State). The Source State withholds a portion of taxes on the income received by the taxpayer in that country. Further, the Residence State, according to its tax laws, would tax the taxpayer on his worldwide income, which would include income from the Source State too.This would result in the taxpayer being taxed on his income twice, i.e.

In a situation where your total income includes any past dues paid in the current year, you may be worried about paying a higher tax on such arrears. However, the Income Tax Act provides relief under Section 89(1) on such salary arrears to reduce the taxpayer's burden.Relief under Section 89(1)Tax is calculated on your total income earned or received during the year. If your total income includes any past dues paid in the current year, you may be worried about paying a higher tax on such arrears.To save you from any additional tax burden due to delay in receiving income, the tax laws allow a relief under section 89(1). In simple words, you do not pay more taxes if there was a delay in payment to you and you were in a lower tax bracket for the year you received the money.An employee must meet certain conditions to claim relief under this section. To start with, Section 89 reliefs can be claimed on any of the following received during a particular year: a) Salary received in arrears or in advance b) Premature withdrawal from Provident Fund c) Gratuity d) Commuted value of pension e) Arrears of family pension f) Compensation on termination of employmentHow to Calculate Tax Relief under Section 89(1) on Salary Arrears?If in case of receipt of past salary, salary in advance or receipt of family pension in arrears, you are allowed some tax relief under section 89(1).Here’s how you can calculate the tax relief yourself –Step 1: Calculate tax payable on the total income, including additional salary – in the year it is received.

Buying a house property is one of the biggest financial commitments in one's life and the Income Tax Act provides taxpayers with a meaningful way to reduce that burden every year. Between Section 80C and Section 24(b), a homeowner under the old tax regime can reduce their taxable income by up to Rs. 3.5 lakh every year. But the actual deduction that can be claimed depends on whether the property is self-occupied or let-out, the tax regime opted for, and if the loan is an individual or a joint loan. Most of the benefits are not available under the new tax regime but with one important exception.Home Loan Tax Benefits - Key HighlightsThe maximum limits for deductions available against interest and principal paid during the financial year are presented in a table below: DeductionComponentMaximum LimitTax RegimeSection 80CPrincipalRs. 1.5 lakhOld Tax RegimeSection 24(b)InterestSelf-occupied property: Rs.

Filing Form 26Q is a crucial obligation for any payer who deducts Tax Deducted at Source (TDS) on payments other than salary. This quarterly return provides the Income Tax Department with essential information about various payments, ensuring transparency and compliance with tax regulations. Understanding how to accurately file Form 26Q is crucial to avoid penalties and interest for late filing.The total amount paid during the quarter and TDS deducted on such payments have to be reported in 26Q.As per the provisions of the new Income Tax Rules 2026, Form 24Q has been replaced by Form 140.TDS Sections Covered in 26QSectionNature Of Payment193Interest on securities194Dividend194AInterest other than Interest on Securities194BWinnings from lotteries and crossword puzzles194BBWinnings from horse race194CPayment to contractors and subcontractors194DInsurance commission194DAMaturity of life insurance policy194EEPayment in respect of deposit under National Savings Scheme194FPayments on account of repurchase of units by Mutual Funds or UTI194GCommission, prize, etc., on sale of lottery tickets194HCommission or Brokerage194I(a)Rent (for machinery or plant)194I(b)Rent (for land or building)194JFees for Professional or Technical Services194LAPayment of Compensation on acquisition of certain immovable property194LBACertain income from units of a business trust194DAPayment in respect of life insurance policy192APayment of accumulated balance due to an employee from thetrustees of the Employees’ Provident Fund Scheme, 1952194LBBIncome in respect of units of an investment fund194IAPayment on transfer of certain immovable property other thanagricultural land (where the buyer is TAN holder)194LBCIncome in respect of investment in securitization trust194NPayment of certain amounts in cash194OPayment of certain sums by e-commerce operator to e-commerce participant194QTDS on purchase of goods194RTDS on benefit or perquisite in respect of business or profession194STDS on transfer of Virtual Digital Assets197ADetails of payment where there is no deduction of tax in certain casesDetails to be Filled in 26QAs against 24Q which contains 3 annexures, Form 26Q contains only one annexure. Challan details (BSR code, date of payment, total amount etc.), details of deductor and deductees are to be mentioned. Along with this, if the deductor hasn’t either deducted TDS or deducted it at a lower rate, reasons are also to be mentioned in the form.Due Date of Filing 26QThe due date of filing form 26Q is as follows:QuarterDue DateApril to June31st JulyJuly to September31st OctOctober to December31st JanJanuary to March31st MayInterest for Late Deduction or Late DepositIf TDS is not deducted – 1% per month, from due date of deduction to actual date of deductionIf TDS is deducted but not deposited – 1.5% per month, from actual date of deduction to actual date of paymentIf TDS is not deducted or deposited, the expense will be disallowed for computing taxable income:For Payments made in India: If TDS is required but not deducted, 30% of the expense amount will be disallowed when computing taxable income.For Payments made outside Indian: The entire amount of the expense on which TDS was required but not deducted will be disallowed.Penalties for Late Filing of 26QLate Filing Fees – under section 234E, a fine of Rs.

At the time of paying salary to an employee, the employer deducts TDS under section 192 of the Income Tax Act 1961. The employer has to file salary TDS return in Form 24Q every quarter. Details of salary paid to the employees and TDS deducted on such payment are to be reported in 24Q. You can easily file your TDS returns through ClearTax software i.e. ClearTDS.24Q consists of 3 annexures – Annexure I, Annexure II and Annexure III.While Annexure I has to be submitted for all four quarters of an FY, Annexure II and Annexure III are not required to be submitted for the first three quarters. Annexure II and Annexure III have to be submitted in the last quarter (Jan – Mar) only.TDS on salary has to be deducted as per the income tax slab.

Section 194C of the Income Tax Act governs the provisions of tax deduction on payments made to contractors or subcontractors. Any person making payments to resident contractors for rendering services under a contractual agreement is required to deduct tax at source at the prescribed rate under this section.This article comprehensively covers the provisions and implications of Section 194C.Budget 2026 UpdateSince the definition of ‘work’ has been proposed to include manpower supply services, it is now classified under TDS on works contract, attracting TDS rate of 1% for individual and HUF payees, and 2% for others. This will take effect from the upcoming tax year. What is Section 194C?As per section 194C, any person making payments to a resident contractor or a sub-contractor has to deduct tax at source at the time of payment of credit of such amount, whichever is earlier. The tax has to be by any person paying any amount for services obtained under a contract. The parties of the contract can be any of the following: The Central Government or any State GovernmentAny Local AuthorityAny Statutory CorporationAny corporation established by or under a Central, State or Provisional ActAny CompanyAny Co-operative SocietyAny authority constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the needs for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for bothAny society registered under the Society Registration Act, 1980 or under any such corresponding law to the Act in any Part of IndiaAny trustAny university or deemed universityAny firmAny Government of a foreign state or foreign enterprise or any association or body established outside IndiaAny person who is an individual, HUF, AOP or BOI, who has total sales from the business or profession exceeds 1 crore or 50 lakhs during the previous Financial year respectively.What is the Meaning of ‘Work’ Under Section 194C?The expression, “work” in this section would include-AdvertisingBroadcasting and telecastingTransportation of goods and passengers, other than railwaysCateringCreating a product as per the specifications of the customer, using materials provided by customer (Similar to Job work).Note : If the products are produced according to customer's specifications, but the customer does not provide the materials for that product, then it cannot be categorized as a contract.Supply of pure-labor contracts for any of the purpose above are also covered under the ambit of this section.Are Sub-Contractors also Covered Under Section 194C?Yes, sub-contractors are also covered under section 194C. A contractor can allocate the work to be carried out by him by entering into a sub contract with another person.Under this section, sub contracts are also covered.