FAQ'S

Income tax return is the form in which assess files information about his/her income and tax thereon to Income Tax Department. Various forms are ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7. When you file a belated return, you are not allowed to carry forward certain losses.

ITR-1 can be filed by a Resident Individual whose:

  • Total income does not exceed ₹ 50 lakh during the FY

  •  Income is from salary, one house property, family pension income, agricultural income (up to ₹5000/-), and other sources, which include:

    1. Interest from Savings Accounts
    2. Interest from Deposits (Bank / Post Office / Cooperative Society)
    3. Interest from Income Tax Refund
    4.  Interest received on Enhanced Compensation
    5. Any other Interest Income
    6. Family Pension

  • Income of Spouse (other than those covered under Portuguese Civil Code) or Minor is clubbed (only if the source of income is within the specified limits as mentioned above).

ITR-2 can be filed by individuals or HUFs who:

  • Do not have income from profit and gains of business or profession and also do not have income from profits and gains of business or profession in the nature of:

    1. Interest

    2. Salary

    3. Bonus

  • commission or remuneration, by whatever name called, due to, or received by him from a partnership firm

  • Have the income of another person like spouse, minor child, etc., to be clubbed with their income – if income to be clubbed falls in any of the above categories.

Carrying on a business or profession (both tax audit and non-audit cases)

The return may include income from house property, salary/pension, capital gains and income from other sources.

ITR-4 can be filed by a Resident Individual / HUF / Firm (other than LLP) who has:

  • Income not exceeding ₹50 Lakh during the FY  Income from Business and Profession which is computed on a presumptive basis u/s 44AD, 44ADA or 44AE

  • Income from Salary/Pension, one House Property, Agricultural Income (up to ₹ 5000/-)

  • Other sources which include (excluding winning from Lottery and Income from Race Horses):

    1. Interest from Savings Account

    2. Interest from Deposit (Bank / Post Office / Cooperative Society)

    3. Interest from Income Tax Refund

    4. Family Pension

    5. Interest received on enhanced compensation

    6. Any other Interest Income (e.g., Interest Income from unsecured loan)

Form 26AS is a statement that provides details of any amount deducted as TDS or TCS from various sources of income of a taxpayer. It also reflects details of advance tax/self-assessment tax paid, and high-value transactions entered into by the taxpayer.

Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head Capital Gains.

Any capital asset held for a period of more than 36 months immediately preceding the date of its transfer will be treated as Long-Term Capital Asset. However, in respect of certain assets like shares (equity or preference) which are listed in a recognized stock exchange in India, units of equity-oriented mutual funds, listed securities like Debentures and Government Securities, Units of UTI and Zero-Coupon Bonds, the period of holding to be considered is 12 months instead of 36 months.

In case of unlisted shares in a company, the period of holding to be considered is 24 months instead of 36 months.

With effect from AY 2018-19, the period of holding of immovable property (being land or building or both) shall be considered as 24 months instead of 36 months

Annual Information Statement (AIS) is comprehensive view of information for a taxpayer displayed in Form 26AS. Taxpayer can provide feedback on information displayed in AIS. AIS shows both reported value and modified value (i.e. value after considering taxpayer feedback) under each section (i.e. TDS, SFT, Other information).

Sec 192 is for Payment of Salary and the TDS rate is normal slab rate

Sec 192A is for Premature withdrawal from EPF and the rate is 10% or withdrawals without a PAN number is now 20%

Sec 193 is for Interest on securities with threshold Limit Debentures- 5,000/Other securities- No limit and rate are 10%

Sec 194 is for Payment of any dividend with threshold Limit 5,000 and rate is 10%

Sec 194A is for Interest from other than interest from securities (from deposits with banks/post office/co-operative society) with threshold Limit Senior Citizens- 50,000 Others- 40,000 and rate is 10%

Sec 194B is for Income from lottery winnings, card games, crossword puzzles, and other games of any type if the Aggregate income from lottery winnings, card games, crossword puzzles etc- 10,000 then rate will be 30%

Sec 194BA is for Income from online games and rate will be 30%

Sec 194BB is for Income from horse race winnings 10,000 aggregate winnings during a financial year not single transaction then the rate will be 30%

Sec 194C is for Payment to contractor/sub-contractor with threshold Limit single transaction- 30,000 aggregate transactions- 1,00,000 and rate for Individuals/HUF is 1% and Other than Individuals/HU 2%

Sec 194D is for Insurance commission to: a) Domestic Companies b) Other than companies with threshold Limit 15,000 and rate for Domestic Companies is 10% and Other than companies 5%

Sec 194DA is for Income for the insurance pay-out, while payment of any sum in respect of a life insurance policy with threshold limit 1,00,000 and rate will be 5%

Sec 194F is for Payment for the repurchase of the unit-by-Unit Trust of India (UTI) or a Mutual Fund and rate will be 20%

Sec 194G is for Payments, commission, etc., on the sale of lottery tickets with threshold limit of 15,000 and rate will be 5%

Sec 194H is for Commission or brokerage with threshold limit of 15,000 and rate will be 5%

Sec 194-I is for Rent: 194-I(a) Rent on plant and machinery with threshold limit of 2,40,000 and rate will be 2% and 194-I(b) Rent on land/building/furniture/fitting with threshold limit of 2,40,000 and rate will be 10%

Sec 194-IA is for Payment in consideration of transfer of certain immovable property other than agricultural land with threshold limit of 50,00,000 and rate will be 1% (only for resident)

Sec 194-IB is for Rent payment by an individual or HUF not covered u/s. 194-I with threshold limit 50,000 per month and rate will be 5%

Sec 194J is for any sum paid by way of fee for professional services, remuneration/fee/commission to a director, technical services with threshold limit 30,000 and rate will be 10%. Also, if any sum paid as fees for technical services, but the payee is engaged in the business of operation of the call center with threshold limit 30,000 and rate will be 2%

Sec 194K is for Payment of any income for units of a mutual fund, for example, dividend and rate is 10%

Sec 194N is for Cash withdrawal exceeding a certain amount Co-operative society: 3 Crore Others: 1 crore and rate will be 2%. If Cash withdrawal in case person not filing ITR for last three years and the original ITR filing due date expired threshold limit – 20 lakh to 1 crore rate will be 2% and -Above 1 crore rate will be 5% *If cash is withdrawn by a co-operative society the limit shall be Rs 3 Crore instead of Rs 1 Crore.

Sec 194O is apply when Payment for the sale of goods or provision of services by the e-commerce operator through its digital or electronic facility or platform with threshold limit 5,00,000 and rate will be 1% and 5% in case PAN is not furnished.

Sec 194Q is when Payments for the purchase of goods exceeds 50,00,000 rates will be 0.10%

Sec 195 is for income on investments made by NRI citizen and rate is 20%.

A short-term gain is a profit realized from the sale of personal or investment property, a capital asset, that has been held for one year or less.

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