Partner With Us

All about Income Tax in India: Basics, tax slabs and e-filing process

It can be safely said that income tax is a concept that most of us are aware of. But before we delve into the topic in detail, it is important to understand what all comes under the ambit of the word INCOME.

Section 14 of the Income Tax Act, 1961, lists the five heads of income for the calculation of an individual's tax liability. The five heads of income are:

  • Income from salary
  • Income from house property
  • Profits and gains of business or profession
  • Capital gains Income from other sources

The income under any of these heads is subject to Income Tax at the specified rates. In this article, we try and explain the basics of Income Tax in India, the various tax slabs applicable to taxpayers belonging to different income groups and the e-filing process. Read on to find out more.

What is Income Tax?

The taxes we pay can be divided into two broad categories: Direct Tax and Indirect Tax. Indirect Tax comprises the taxes we pay to the government every time we purchase any goods or services. Say, you go to your nearby mom-and-pop store and pick up a packet of chips or a chocolate. Of the price that you pay for the item, a certain portion is paid to the government in indirect taxes. Again, when you dine at a restaurant, the service tax you pay is a form of indirect tax.

Direct Tax, on the other hand, is that which the government imposes on our income. Our earnings from various sources are subject to taxation, and we pay this amount directly to the government. The Income Tax Act, 1961, is the central piece of legislation that contains the provisions pertaining to income tax in India.

Who all are supposed to pay Income Tax?

As per the Act, individuals, Hindu Undivided Families (HUFs), companies, firms, association of persons, body of individuals and local authorities are required to pay taxes. There are tax slabs outlined according to the different income categories. Those people with an income below Rs. 2.5 lakh are not required to pay Income Tax. Beyond this basic exemption limit, people are taxed as per their total taxable incomes. Again, there are several tax deductions and exemptions one can avail of to further bring down their taxable income.

Different Tax Slabs

From the financial year 2020-21 onward, taxpayers have to choose between the old or existing tax regime and the new one (as introduced in Budget 2020). The old tax regime continues to have three tax slabs with the option to avail of tax deductions and exemptions under sections of the Income Tax Act. Meanwhile, the new tax regime has six tax slabs and lower rates, but taxpayers have to forego most of the tax benefits available under the old regime.

Here are the tax slabs for FY 2021-22 under the two Income Tax regimes.

Tax slabs under old and new regime (for individual taxpayers under the age of 60 years, NRIs and HUFs):

Total income (in Rs)

Tax rates under old regime

Tax rates under new regime

Up to Rs 2.5 lakh



Rs 2.5 lakh to Rs 5 lakh



Rs 5 lakh to Rs 7.5 lakh



Rs 7.5 lakh to Rs 10 lakh



Rs 10 lakh to Rs 12.5 lakh



Rs 12.5 lakh to Rs 15 lakh



Above Rs 15 lakh 



E-filing process

Nowadays, you can file your income tax returns (ITR) online, using the tax department's e-filing portal. This makes the tax filing process quicker, simpler and more convenient. You can enter the relevant data directly on the e-filing portal and submit it to complete your ITR filing process. To file your ITR online, you need to be registered on the I-T Department's e-filing portal. Here is a step-by-step guide on how to proceed with the ITR e-filing process.

  • Visit the Income Tax Department's e-Filing portal (www.incometaxindiaefiling.gov.in).
  • If you are a first-time user, make sure you register on the portal. Once registered, login to the e-filing portal by using your user ID (PAN) and password.
  • Enter the captcha code and log in.
  • Select the 'e-file' tab and click on the 'Income Tax Return' link.


On the Income Tax Return Page:

  • PAN will be auto-populated.
  • Select 'Assessment Year'.
  • Select 'ITR Form Number'.
  • Select 'Filing Type' as 'Original/Revised Return'.
  • Select 'Submission Mode' as 'Prepare and Submit Online'.
  • Click on 'Continue'.
  • Go through the instructions carefully and fill all the applicable and mandatory fields of the online ITR form.
  • Choose the appropriate verification option in the 'Taxes Paid and Verification' tab.
  • Click on the 'Preview and Submit' button and verify all the data entered in the ITR.
  • 'Submit' the ITR.
  • Once the ITR is submitted, e-verification has to be completed by entering EVC/OTP. This can be done using Aadhaar OTP, pre-validated bank or demat account.
  • The EVC/OTP should be entered within 60 seconds else, the Income Tax Return (ITR) will be auto-submitted. The submitted ITR should be verified later by using 'My Account > e-verify Return' option.

Disclaimer :ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. Please note, filing of tax related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. The content is solely for informational and educational purpose. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

Most Popular

  • 27 Sep 2021
  • ICICI Securities

The Five Rules of Investing in Equities

Investment in equity should be made by following certain rules. There are five rules of equity investments. They arise from an understanding of the stock market and mitigate the chances of making mistakes and incurring losses.

  • 27 Sep 2021
  • ICICI Securities

Investment Rules: 5 Thumb Rules of Investing in Market

While you work for money, suitable investments make your money work for you. How you take control of your finances determines the growth of your wealth and additional income streams. Click here to read about the five golden rules you can follow while investing.

  • 15 Sep 2021
  • ICICI Securities

5 Most Popular Reasons for Switching Bank

In the beginning, you would hear from them quite often. But of late, you're noticing more and more signs that it's no longer working. We are referring to your relationship with your bank. Click here to read how to recognize the red flags in your banking relationship and why it might be a good time to end the bond.

  • 15 Sep 2021
  • ICICI Securities

How Intraday Trading Works? Detailed Ideas

Intraday trading in India has been gaining momentum of late. It is no longer the option of only trade pundits.

  • 15 Sep 2021
  • ICICI Securities

What is Intraday trading? A Beginner's Guide

With the advancement of technology and increased knowledge about the stock market, trading is no more a domain dominated by stock pundits.

  • 05 Sep 2021
  • ICICI Securities

Is it Good To Invest in Cyclical Stocks?

Akin to how the pedals of a cycle go up and down as it moves forward, the share price of certain stocks goes up and down in accordance with the economic cycles a country goes through. 

  • 05 Sep 2021
  • ICICI Securities

A primer on Fixed Maturity Plans

If you happen to have some surplus funds which you don’t need for a specific period, but you don’t want to take the risk of investing this money in the stock market, you can very well put this money in a Fixed Maturity Plan or FMP. 

  • 05 Sep 2021
  • ICICI Securities

How to Choose the Best Equity Mutual Fund

You must have heard a lot about investing in mutual funds. But before jumping on this trend you need to assess a mutual fund scheme according to your goals, investment horizon, risk profile, liquidity needs and many other factors to find a suitable match. 

  • 05 Sep 2021
  • ICICI Securities

A Beginner’s Guide to Monetary Policy Tools

The Reserve Bank of India has the incredibly crucial responsibility to formulate the monetary policy. The main objective of monetary policy is to control inflation and provide a conducive environment for the country's economic growth. 

  • 05 Sep 2021
  • ICICI Securities

Buying Penny Stocks and its Risks

There is a specific category of stocks whose prices are very low and they seem to yield exponential returns. But do you know that investment in such stocks could be risky? 

Open an Account

Sign Up for Free


Please use the mobile no registered with Aadhaar.

OTP sent to +91 1234567890

Didn’t received OTP? Resend



Get Research Backed Recommendations.

Download The app now

or Scan below QR Code To download app