ITR Filings
What is the meaning of income tax? Taxes are of two types, namely, ‘Direct Tax’ and ‘Indirect Tax’. Taxes that are directly levied on the income is known as ‘Direct Tax’ For e.g. ‘Income Tax’. The income earned is divided into the following ‘Heads of Income’- 1. Income from Salary, 2. Income from House Property, 3. Income from Business and Profession, 4. Income from Capital Gain, and 5. Income from Other Sources. How is income tax calculated? The Income Tax is calculated based on the ‘income tax slab rates’ as applicable during the respective Financial Year. Income tax slab rates (both old and new tax regime) as applicable for the Financial Year 2020-2021 (i.e., the Assessment Year 2021-2022) is briefed hereunder- OLD TAX REGIME- Tax slab for individuals- Individual (resident or non-resident) Resident senior citizen(i.e., age group 60 years or more but less than 80 years) Resident super senior citizen(i.e., age group above 80 years) Net Income Tax Rates Net Income Tax Rates Net Income Tax Rates Up to INR 2,50,000 NIL Up to INR 3,00,000 NIL Up to INR 5,00,000 Nil INR 2,50,001 – INR 5,00,000 5% INR 3,00,001 – INR 5,00,000 5% INR 5,00,001 – INR 10,00,000 20% INR 5,00,001 – INR 10,00,000 20% INR 5,00,001 – INR 10,00,000 20% Above INR 10,00,000 30% Above INR 10,00,000 30% Above INR 10,00,000 30% – – Tax slab for HUF, AOP and BOI or any other artificial juridical person- Net Income Tax Rates Up to INR 2,50,000 NIL INR 2,50,001 – INR 5,00,000 5% INR 5,00,001 – INR 10,00,000 20% Above INR 10,00,000 30% NEW TAX REGIME- Tax slab for individual and HUF- Total Income Tax Rates Up to INR 2,50,000 NIL INR 2,50,001 – INR 5,00,000 5% INR 5,00,001 – INR 7,50,000 10% INR 7,50,001 – INR 10,00,000 15% INR 10,00,001 – INR 12,50,000 20% INR 12,50,001 – INR 15,00,000 25% Above INR 15,00,000 30% OTHER INCOME TAX SLABS- Partnership firm (including LLP) and the local authority are taxed at the rate of 30%. Domestic company- Normal Rate Special Rate Particulars Tax Rates Particulars Tax Rates Turnover or gross receipts up to INR 400 Crores in the Financial Year 2019-2020 25% As per section 115BA 25% Others 30% As per section 115BAA 22% – – As per section 115BAB 15% Co-operative society- Income Tax Rates Up to INR 10,000 10% INR 10,001 – INR 20,000 20% Above INR 20,000 30% It is important to note that ‘Surcharge’ and ‘Health and Education Cess’ is applicable over and above the tax rates mentioned above. What are the Income Tax Returns (ITRs) in India? Income Tax Returns- A Form has to be filed as a statement of income earned. It is arranged in such a way that calculating tax liability, scheduling tax payments, or requesting refunds for the overpayment of taxes has been made convenient for the taxpayers. They must, first, determine the type of Income Tax Return (ITR) Form they need to fill before actually filing their Returns. Which Form is to be filled, depends on the income that the taxpayer earns. Its purpose is to report our income and taxes paid thereon to the government. Basically, income tax returns (IT returns) is a form through which the annual income of the taxpayer is reported. Based on the income assessment group, the taxpayer will have to submit one of the following ITR forms- ITR forms Applicable to ITR 1 Resident individual-Having income from ‘salary’, ‘one house property’, ‘other sources’; andHaving total income up to INR 50 Lakhs and agricultural income up to INR 5,000. ITR 2 Individual and HUFs not having any income from profits and gains of business or profession ITR 3 Individual and HUFs having income from profits and gains of business or profession ITR 4 Resident individual, HUFs and Firms (not LLP)-Having total income up to INR 50 Lakhs; andHaving income from the business and profession computed under section 44AD, section 44ADA or section 44AE. ITR 5 Any person other than-Individual,HUF,Company, andPerson filing return in ITR-7. ITR 6 Companies (other than companies claiming exemption under section 11) ITR 7 Any person (including company) who are required to furnish return under section 139(4A); or section 139(4B); or section 139(4C); or section 139(4D). What is the last date for filing ITR for AY 2021-22? As per the latest issued circular no. 17/2021 dated 9th September 2021, the due dates for filing the ITR for the Financial Year 2020-2021 is extended. Original due date and extended due dates are tabulated hereunder- Particulars Original due date Extended due date ITR filing by the taxpayers not covered under tax audit 31st July 2021 31st December 2021 ITR filing by the taxpayers covered under tax audit 31st October 2021 15th February 2022 ITR filing by the taxpayers required to furnish report referred in section 92E 30th November 2021 28th February 2022 E-filing process F.Y. 2020-2021- Recently, on 7th June 2021, the Central Board of Direct Taxes launched the new e-filing portal www.incometax.gov.in.Despite many initial technical challenges, the new portal has certainly tried to make the ITR filing much easier. ITR filing is possible in both online and offline modes. The basic steps to be followed for filing the ITR is summarized hereunder- STEP 1 – Visit site https://www.incometax.gov.in/iec/foportal. STEP 2 – Click the ‘Login’ icon available on the right-hand side. STEP 3 – Enter ‘User ID’ and click Continue. STEP 4 – Enter ‘Password’ and click Continue. STEP 5 – Click ‘File Now’. STEP 6 – Select Assessment Year 2021-2022 from the drop-down list. STEP 7 – Select the mode of filing i.e. Online or Offline. STEP 8 – Click Continue. STEP 9 – Based on the mode of filing selected, fill up the required details and submit the return. Advantages of tax filing Processing of Loans & Visa: If you apply for any loans such as a home loan, car loan, etc., the eligibility and quantum of loan would depend on your income. This can be established through filed ITRs. ITR will help your lender to assess your repayment capacity. If you