Form ITR-1 is for ordinary residents having total income up to Rs 50 lakh from salaries, a single house property and any other sources (interest etc.), and agricultural income up to Rs 5,000.
For NRI investors, 20% plus surcharge and cess is withheld. However, tax will be assessed on the basis of documents submitted to avail tax treaty benefit under DTAA.
Pranav Dwivedi's salary structure is not very tax-friendly. His salary includes many allowances which are fully taxable in his hands and leads to higher tax outgo. ET Wealth tells readers how they can optimise their tax by rejigging their income and investments.
The government recently amended the Form 26AS which will show high-value transactions that are conducted by you in the financial year. However, there are other ways in which the tax department can track your financial transactions. Given below are the list of those ways.
Even though the deadline to file an income tax return for FY 2019-20 has been extended by four months, it is always a good practice to collect all the required documents well before the deadline to make it easier to file the tax return.
The income tax return forms have been notified by the Central Board of Direct Taxes (CBDT). It is important to file your tax return using the correct ITR form. If the tax return is filed not using the correct form, then the ITR will be termed as 'defective return' and you will be asked to file the ITR again.
At the time of withdrawal, the PF authorities will deduct tax at 10% on entire PF proceeds (assuming you have furnished your PAN to the PF authorities), including the interest. PF proceeds comprise employee’s and employer’s contributions, and the interest earned thereon.
The government has extended various income tax-related deadlines in the wake of novel coronavirus pandemic and the fiancial stress caused by it. Here are five of those tax-related deadlines.
As work-from-home becomes the new normal across the country, salaried taxpayers are seeing their tax shoot up. Many of the allowances in the pay package, including the commonly used reimbursement of fuel or conveyance expenses, have become taxable due to the travel restrictions imposed by Covid.
A State Bank of India (SBI) customer can get the interest certificate and TDS certificates either by visiting his/her bank branch or by downloading the same from the Net banking facility. Having these documents handy makes it easier to file the income tax return.
An individual cannot claim rebate under section 87-A of the Income-tax Act on the tax payable on the long-term capital gains on the sale of the listed securities.
Pune-based IT professional Girish Agarwal utilises most of the income tax deductions available to him and his salary structure is also quite tax-friendly Due to this, there is not much of a scope to further reduce his income tax liability.
There are two things to be figured out: the cost of acquisition of units in the segregated portfolio and the holding period of the units in the segregated portfolio. Any amount recovered from the segregated portfolio will be considered as capital gain for income tax purposes.
The amount of principal repaid can be claimed as tax deduction u/s 80C subject to maximum of Rs 1.5 lakh. But if the house is sold within five years of possession, the amount claimed as deduction will be considered as income in the year in which property is sold.
Taxspanner estimates that Rao can reduce her tax to nil if her pay structure is rejigged to include some tax-free allowances, her company offers her the NPS benefit and she pays rent to her mother to claim HRA exemption.
The Budget 2020, has further expanded the scope of section 194N of the Income-tax Act, 1961 to provide different tax rates for two different class of persons and two threshold limits to deduct tax on withdrawal of cash from any savings or current account.
You can certainly claim the rent paid to your wife as an expense for the part of the premises used for your business or profession but generally, it is more onerous to prove a commercial relationship between husband and wife.
According to a press release issued by the Central Board of Direct Taxes on June 24, 2020, no extension has been granted to individuals having self-assessment tax liability of over Rs 1 lakh for FY 2019-20. Further, delayed tax-payment would attract penal interest.
"Understanding the current times that we are in, we have further extended deadlines. Now, furnishing of TDS/TCS statements for FY 19-20 extended to July 31, 2020," said the Income Tax Department.
The extension will reduce hardship of taxpayers on one hand and will also give some more breathing time to tax officers, said experts, amid challenges faced in meeting the statutory and regulatory compliance requirements due to the outbreak of Covid-19.
The government via a notification dated May 28, 2020, has made changes to the Form 26AS. These changes have come into effect from June 1, 2020. Here are the four new changes in Form 26AS that will appear from now onwards.
Despite the tax on the interest, EPF continues to have the highest returns among small saving schemes. So it makes sense to make small periodic withdrawals to ensure that the account does not become inoperative.
The Cost Inflation Index (CII) for FY 2020-21 will come into force with effect from April 1, 2021, and will accordingly apply to the assessment year 2021-22 and subsequent years. Take a look at all the CII numbers since 2001-02 till 2020-21.
"The law states that any amount withdrawn from a recognised provident fund is exempt in the hands of the employee if the employee renders continuous service for 5 years or more."
A new schedule (column) has been added in the I-T return forms to report investments made between April 1 up to June 30, 2020, for which deductions can be claimed in financial year 2019-20.
Taxpayers including individuals, Hindu undivided family, professionals and businesses, will be able to avail benefits of savings or investments made between April 1 and June 30, following the extension timelines provided by the finance ministry owing to Covid 19 pandemic.
Form 26AS is an annual consolidated tax statement that can be accessed from the income-tax website by taxpayers using their Permanent Account Number (PAN). The revamped Form 26AS will now come into effect from June 1, the Central Board of Direct Taxes (CBDT) said.
The reduction in contribution will lead to an increase in your takehome pay which, in turn, will be taxed at your income-tax slab rate. This reduction has to be undertaken by all companies falling within the ambit of EPF.
Investment in Tier-I account of NPS via your employer allows you to claim a deduction from your gross total income under the Income-tax Act even under the new lower tax regime. Here's all you need to know about it.
The finance minister also announced that the due date of all income tax (I-T) returns for assessment year 2020-21 will be extended to November 30, 2020. Tax experts said the move to reduce TDS and TCS will help increase liquidity in the system.
The new TDS rates have come into effect from May 14, 2020, and will remain effective till March 31, 2021, i.e., till the end of the financial year 2020-21, the Finance Minister Nirmala Sitharaman said in her press briefing.
As per the government announcement via a press conference, "Due date for all income-tax return for FY 2019-20 will be extended from July 31, 2020, and October 31, 2020, to November 30, 2020, and tax audit from September 30, 2020 to 31st October 2020."
Income tax is a tax levied directly by the central government on the incomes earned by the individuals and other non-individual entities such as Hindu Undivided Family (HUF), partnership firm and so on during a financial year. These various sources of income include salary, pension, capital gains, sale of financial investments, interest income, other incomes and so on.
Unlike the Goods and Services Tax (GST) Council where the Union Finance Minister and State Finance Ministers decide the rates, the income tax rates are announced by the Finance Minister during the year’s Union Budget.
The rate at which your total income earned during the year will be taxed depends on the slab in which your income falls. Over and above the income tax, a cess and surcharge is levied. The cess is payable by all taxpayers. For those earning more than Rs 50 lakh a year, a surcharge is levied between 10 percent and 37 percent.
The total income earned by a taxpayer during a financial year has to be reported to the government in the assessment year by filing income tax return (ITR filing).
Financial year is the year in which income is earned by a taxpayer; a financial year is between April 1 and March 31. Assessment year is the year immediately following the financial year for which the return is to be filed.
Income earned from various sources such as salary, pension, interest from fixed deposits (FDs), savings account, capital gains from sale of house, equity mutual funds, debt mutual funds and so on have to be reported in ITR.
1. What is the basic exemption limit for individuals aged below 60 years? According to income tax laws, it is mandatory to file ITR if your income exceeds the basic exemption level. The basic exemption level depends on the age of the individual during the financial year.
Currently, for individuals below 60 years of age, the maximum income exempt from tax is Rs 2.5 lakh in a financial year. This can change depending on the announcements made in the Union Budget.
2. What are the tax rates at which income is charged? The income tax slab rates are 5 percent, 20 percent, and 30 percent.
Also Read:Latest income tax slabs
3. How to file income tax return An individual can file income tax return by registering himself on the incometaxindiaefiling.gov.in or via private e-filing websites.
4. What is the difference between gross total income and net total income? Gross total income refers to the total income earned by the taxpayer. Income tax laws allow an individual to claim certain tax-exemptions (such as house rent allowance) and deductions under various sections such as section 80C for investments made in Public Provident Fund, equity mutual funds etc. of up to Rs 1.5 lakh.
Gross total income minus tax-exemptions and deductions would result in net total income. The tax liability of the person will be calculated on the net total income.
5. What is the last date to file income tax return? The last date to file income tax return for individuals is July 31, unless extended by the government.
