Income Tax

WHAT IS INCOME TAX

INCOME

WHAT ARE THE SOURCES OF INCOME TAXED UNDER INCOME TAX?

HOW INCOME IS CALCULATED FOR INCOME TAX PURPOSE?

RETURN

WHO ARE REQUIRED TO FILE INCOME TAX RETURN?

WHAT ARE THE DUE DATEs FOR FILING INCOME TAX RETURN?

WHAT IS THE LATE FEES & INTEREST?

PAYMENT

WHAT IS THE RATE OF INCOME TAX FOR INDIVIDUALS

WHEN TAX NEED TO BE PAID?

WHAT IS INCOME TAX

Income tax is a direct tax imposed on the income of the individuals and other entities by the government. Indian residents are required to consider their income from India as well as overseas during tax filing; whereas, foreigners are taxed only on their income originating from India. Incomes of different nature and volumes of entities other than corporate bodies are stacked under different income heads and slab rates.

INCOME

WHAT ARE THE SOURCES OF INCOME TAXED UNDER INCOME TAX?

Apart from few exemptions and deductions almost all income earned during a previous year from whatever sources e.g. salary, business, profession, rental property, sale of assets, interest, etc. are subject to income tax. Following are the 5 category under which income needs to be classified.

  1. Income from salary
  2. Income from House Property
  3. Income from Business or Profession
  4. Income from Capital Gains
  5. Income from Other sources.

HOW INCOME IS CALCULATED FOR INCOME TAX PURPOSE?

To calculate taxable income one needs to take professional advice from CA or income tax consultants for taxability of various transactions and required experts to compute net income from each heads of income. Under income tax there are different provisions and scheme for computation of income for different type of assesses. Below is an overview for having a brief idea about the taxable amount computed under different heads

 

Income from

Taxable Amount

1

Salary

Net salary after deduction of few allowance and PT

2

House property

Total annual rent less Standard deduction of 30% and municipal tax paid

3

Business and Profession

Net profit from the business/profession

4

Capital gain

Gain on sale of Capital Assets

5

Other sources

All other income such as Interest income, winning from lottery, residual income, etc.

RETURN

WHO ARE REQUIRED TO FILE INCOME TAX RETURN?

Income tax return (ITR) is the form which is filled and submitted by taxpayers to declare their income earned and tax payable, with the income tax department.

Is it mandatory to file ITR by every citizen?

In any of the following situations (as per the Income Tax Act), it is mandatory for you to file an Income Tax Return in India.

  1. Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs 2.5 lakhs in FY 2019-20.
  2. You are a company or a firm irrespective of whether you have income or loss during the financial year
  3. You want to claim Refund of TDS.
  4. You want to carry forward a loss under a head of income
  5. if you are a Resident individual and have an asset or financial interest in an entity located outside of India.
  6. If you are a Resident and a signing authority in a foreign account. You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust
  7. If you are a foreign company taking treaty benefit on a transaction in India
  8. A proof of return filing may also be required at the time of applying for a loan or a visa

WHAT ARE THE DUE DATEs FOR FILING INCOME TAX RETURN?

Taxpayers

ITR Filing Date

All individuals, HUF’s, Association of persons, body of individuals who needs to file ITR return and not liable for accounts audit lies into this category

31st July of the relevant assessment year

 

All individuals, companies (sole proprietorship firms, partnership firms), persons of firms who needs to file IT returns and liable for accounts audit lies into this category

31st October of the relevant assessment year as per Finance Bill 2020 (Previously it was the 30th Day of September)

Taxpayers who required to furnish reports u/s 92E

30th November of the relevant assessment year

Deadline for filing late income tax return for all individuals & companies

31st march of the immediate next year

For FY 2018-19 : last date for filing ITR-30th Nov 2020

For FY 2019-20 : Due date for filing ITR-30th Nov 2020

WHAT IS THE LATE FEES & INTEREST?

The Late fees for not filing ITR FY 2019-20 are given in the table below –

E-filing date

Income below Rs 5,00,000

Income above Rs 5,00,000

Up to 30th Nov 2020

0

0

Between 1st Dec to 31st Dec 2020

Rs 1000

Rs 5000

Between 1st Jan 2021 to 31st Mar 2021

Rs 1000

Rs 10000

Apart from the penalty for late filing, interest under section 234A at 1% per month or part thereof will be charged till the date of payment of taxes.

PAYMENT

WHAT IS THE RATE OF INCOME TAX FOR INDIVIDUALS

Income Tax Slab FY20-21

Tax Rates As Per New Regime

Tax Rates As Per Old Regime

₹0 – ₹2,50,000

Nil

Nil

₹2,50,001 – ₹ 5,00,000

5%

5%

₹5,00,001 – ₹ 7,50,000

₹12500 + 10% of total income exceeding ₹5,00,000

₹12500 + 20% of total income exceeding ₹5,00,000

₹7,50,001 – ₹ 10,00,000

₹37500 + 15% of total income exceeding ₹7,50,000

₹62500 + 20% of total income exceeding ₹7,50,000

₹10,00,001 – ₹12,50,000

₹75000 + 20% of total income exceeding ₹10,00,000

₹112500 + 30% of total income exceeding ₹10,00,000

₹12,50,001 – ₹15,00,000

₹125000 + 25% of total income exceeding ₹12,50,000

₹187500 + 30% of total income exceeding ₹12,50,000

Above ₹ 15,00,000

₹187500 + 30% of total income exceeding ₹15,00,000

₹262500 + 30% of total income exceeding ₹15,00,000

 

WHEN TAX NEED TO BE PAID?

If a person’s total tax liability is Rs 10,000 or more in a financial year you are required to pay advance tax. Advance tax applies to all taxpayers, salaried, Self employed and businesses. Senior citizens, who are 60 years or older who do not run a business, are exempt from paying advance tax.

Due Date

Advance Tax Payable

On or before 15th June

15% of advance tax

On or before 15th September

45% of advance tax less advance tax already paid

On or before 15th December

75% of advance tax less advance tax already paid

On or before 15th March

100% of advance tax less advance tax already paid

 

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