Individual Taxpayer

An Individual Taxpayer refers to a natural person who is liable to pay income tax on income earned during a financial year under the Income Tax Act.

This is the most common category of taxpayer and includes salaried individuals, professionals, freelancers, and business owners operating in their personal capacity.

1. Types of Individual Taxpayers

Individuals are classified based on age for tax purposes:

• Normal Individual: Below 60 years
• Senior Citizen: 60 years or above
• Super Senior Citizen: 80 years or above

Different basic exemption limits may apply under the old tax regime.

2. Residential Status

Taxability depends on residential status:

• Resident
• Resident but Not Ordinarily Resident (RNOR)
• Non-Resident (NRI)

This determines whether global income or only Indian income is taxable.

3. Sources of Income

An individual can earn income under different heads:

• Salary or pension
• House property (rent)
• Business or professional income
• Capital gains (sale of assets)
• Other sources (interest, dividends, etc.)

All income must be reported in the Income Tax Return (ITR).

4. Tax Regimes Available

Individual taxpayers can choose between:

• Old Tax Regime: Allows deductions and exemptions
• New Tax Regime: Lower rates with limited deductions

The choice should be based on overall tax impact.

5. Deductions and Benefits

Individuals can reduce taxable income through:

• Section 80C (investments, home loan principal)
• Section 80D (medical insurance)
• HRA, LTA, and other allowances
• Interest on home loan

6. Compliance Requirements

• Filing of Income Tax Return (ITR)
• Payment of advance tax (if applicable)
• Reporting of all income and high-value transactions
• Maintaining supporting documents

7. Common Mistakes

• Not reporting all sources of income
• Choosing wrong tax regime
• Ignoring AIS/Form 26AS mismatch
• Missing eligible deductions

Practical Insight

Most individuals think tax is about filing returns once a year.

It’s not.

It’s about:

• structuring income
• tracking transactions
• planning deductions throughout the year

That’s what actually reduces tax, not last-minute filing.

How N D Savla & Associates Can Help

At N D Savla & Associates, we help you:

• Plan and optimise your personal taxes
• Choose the right tax regime
• Ensure accurate and compliant ITR filing
• Handle notices and tax queries