Income Tax Return filing
Below are the import points concerning the Income Tax return filing.
Who has to file Income Tax return?
Every citizen of the country is required to
pay the tax on income earned or accrued above the stipulated threshold limit.
Subsequently, the disclosure of the details of income and the tax paid or
payable to the tax authorities at the central government are mandated for those
fulfilling certain criteria.
The Income Tax Act 1961 classifies the tax
payers into three categories, namely:-
·
Resident Indian –
o
An Indian who resides in India for
at-least 120 days in the previous year whose source of income in India exceeds
Rs. 15 lakhs.
o
An Indian citizen who is not taxed in
any other country by the reason of his domicile or residence or any other
criteria of similar nature with the source of income in India exceeds Rs. 15 lakhs.
o
All individuals stayed in India for
182 days or more.
o
All individuals stayed in India for
the immediately 4 preceding years is 365 days or more and
60 days or more in the relevant financial year.
o
A citizen of India or a Person of
Indian origin who leaves India for employment outside India during the year
will be a resident and ordinarily resident if he stays in India for an
aggregate period of 182 days or more. This condition will apply only if his
total income (other than foreign sources) exceeds Rs. 15 lakhs.
·
Resident but not ordinary resident
An individual
will be considered as resident and ordinary resident if he fulfills the below
two conditions.
1. Resident
of India in at least 2 out of 10 years immediately previous years, and
2. Stayed
in India for at least 730 days in 7 immediately preceding years
o If
an individual fails to meet either or both of the above mentioned conditions,
he/she will be considered as Resident but not ordinary resident.
·
Non resident
Indian (NRI)
o An
individual satisfying neither of the conditions as above would be a Non
Resident for the year.
Taxability
o Resident: A
resident will be charged to tax in India on his global income i.e. income
earned in India as well as income earned outside India.
o NR
and RNOR: Their tax liability in India is restricted to the income they
earn in India. They need not pay any tax in India on their foreign income.
o Also
note that in a case of double taxation of income where the same income is
getting taxed in India as well as abroad, one may resort to the Double Taxation
Avoidance Agreement (DTAA) that India would have entered into with the other
country in order to eliminate the possibility of paying taxes twice.
TAX RATES FOR THE A.Y. 2020-21
In case of Super Senior citizen
|
Total Income Range |
Rates of Income Tax |
|
Up
to Rs. 5,00,000 |
NIL |
|
Rs.
5,00,001 to Rs. 10,00,000 |
20%
of (Total income - Rs. 5,00,000) |
|
Rs.
10,00,001 and above |
Rs.
1,00,000 + 30% of (Total income - Rs. 10,00,000) |
Super Senior Citizen means an individual who is resident in India
and is of at least 80 years of age at any time during the relevant previous
year.
In case of Senior citizen
|
Total Income Range |
Rates of Income Tax |
|
Up
to Rs. 3,00,000 |
NIL |
|
Rs.
3,00,001 to Rs. 5,00,000 |
5%
of (Total Income - Rs. 3,00,000) |
|
Rs.
5,00,001 to Rs. 10,00,000 |
Rs.
10,000 + 20% of (Total income - Rs. 5,00,000) |
|
Rs.
10,00,001 and above |
Rs.
1,10,000 + 30% of (Total income - Rs. 10,00,000) |
Senior Citizen means an individual who is resident in India and is
of at least 60 years of age at any time during the relevant previous year.
In case of other Individuals/HUF/Association of Persons/Body of
Individuals/Artificial Juridical Person
|
Total Income Range |
Rates of Income Tax |
|
Up
to Rs. 2,50,000 |
NIL |
|
Rs.
2,50,001 to Rs. 5,00,000 |
5%
of (Total Income - Rs. 2,50,000) |
|
Rs.
5,00,001 to Rs. 10,00,000 |
Rs.
12,500 + 20% of (Total income - Rs. 5,00,000) |
|
Rs.
10,00,001 and above |
Rs.
1,12,500 + 30% of (Total income - Rs. 10,00,000) |
Rebate
u/s 87A
Applicable
to: Resident Individual
Conditions
to be satisfied: Total income of the assessee does not exceed Rs. 5,00,000.
Quantum
of Rebate: 100% of tax liability as computed above,
subject to the maximum of Rs. 12,500/-.
Surcharge on tax after rebate u/s 87A
|
Total
Income |
Rate
of Surcharge |
|
Total
income does not exceed Rs. 50 lacs |
NIL |
|
Total
income exceeds Rs. 50 lacs but does not exceed Rs.
1 crore |
10%
of tax |
|
Total
income exceeds Rs. 1 crorebut does not exceed Rs. 2
crores |
15%
of tax |
|
Total
income exceeds Rs. 2 crores but does not exceed Rs.
5 crores |
25%
of tax* |
|
Total
income exceeds Rs. 5 crores |
37%
of tax* |
*
Where the total income includes any income chargeable u/s 111A and 112A, the
surcharge on the amount of income-tax computed on that part of income shall not
exceed 15%. In other words, surcharge higher than 15% is applicable only on tax
on income other than income covered u/s 111A and 112A.
Health
& Education Cess
Applicable
on: All assessee
Rate
of cess: 4% of Tax
liability after Surcharge
Firm
or Limited Liability Partnership (LLP)
A
partnership firm (including limited liability partnership) is taxable at the
rate of 30%
Surcharge:12%
of income-tax (if total income exceeds Rs. 1 crore
otherwise NIL)
Marginal
Relief: Available
Health
& Education Cess: 4%
of tax liability after surcharge
In case of Company
|
Company |
Rate |
|
In
the case of a domestic company |
|
|
-
Where its total turnover or gross receipts during the previous year 2017-18
does not exceed Rs. 400 crore |
25% |
|
-
In any other case |
30% |
|
In
the case of a foreign company |
40% |
Surcharge (for companies)
|
Total Income |
Domestic Company |
Foreign Company |
|
If
total income exceeds Rs. 10 crore |
12% |
5% |
|
If
income exceeds Rs. 1 crore but does not exceed Rs.
10 crore |
7% |
2% |
|
If
income does not exceed Rs. 1 crore |
NIL |
NIL |
Marginal Relief: Available at both
points (i.e., income exceeds Rs. 1,00,00,000 or Rs.
10,00,00,000)
Health & Education Cess: 4%
of tax liability after surcharge
In few cases and
subject to certain conditions, companies are liable to be taxed at different
rate.
18.5 FORMS – RETURN OF INCOME
Rule
12 provides following Form for filing return of income for different assessee:
|
ITR
- 1(Sahaj) |
For
Individuals having Income from Salaries, one house property (does not have
any brought forward loss), other sources [Interest (does not have any loss
under the head) etc. but
except winnings from lottery or income from race horses] and having total
income upto Rs. 50 lakh |
|
ITR
- 2 |
For
Individuals and HUFs not carrying out business or profession under any
proprietorship |
|
ITR
- 3 |
For
individuals and HUFs having income from a proprietary business or profession |
|
ITR
- 4 (Sugam) |
For
presumptive income from Business & Profession |
|
ITR
- 5 |
For
person other than (i) Individual; (ii) HUF; (iii)
Company; & (iv) Person filing Form ITR-7 |
|
ITR
- 6 |
For
Companies other than companies claiming exemption u/s 11 |
|
ITR
- 7 |
For
persons including companies required to furnish return u/s 139(4A) or 139(4B)
or 139(4C) or 139(4D) or 139(4F) |
|
ITR
- V |
Income
Tax Return Verification Form [Where the data of the aforesaid Return of
Income has transmitted electronically without digital signature] |
TIME LIMIT FOR FILING RETURN OF INCOME
|
Assessee |
Due date |
|
Where
the assessee is required to furnish a report in
Form 3CEB u/s 92E pertaining to international transaction(s) |
30th
November |
|
Where
the assessee is a company not having international
transaction(s) |
30th
September |
|
Any other assessee |
|
|
-
Where accounts of the assessee are required to be
audited under any law |
30th
September |
|
-Where
the assessee is a working partner In a firm and the
accounts of the firm are required to be audited under any law |
30th
September |
|
In any other case |
31st
July |
FEE FOR DEFAULT IN FURNISHING RETURN OF INCOME [SEC. 234F]
Where a person required to furnish
a return of income u/s 139, fails to do so within the due date, he shall pay
fee of:
|
Case |
Fee |
|
Total
income does not exceed Rs. 5 lakh |
Rs. 1,000 |
|
Total
income exceeds Rs. 5 laks |
|
|
-
If the return is furnished on or before 31st December of the assessment year |
Rs. 5,000 |
|
-
In any other case |
Rs. 10,000 |