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e-filing of Income tax return
CA. D K Bholusaria
Disclaimer
This presentation has been prepared for academic use only for sharing knowledge on the subject. Though every effort has been made to avoid errors or omissions in this presentation yet any error or omission may creep in.
It is suggested that to avoid any doubt the user should cross check the correctness of text, contents and the law with the original documents and to dispel confusion should seek professional help/opinion.
2
Agenda
Today’s agenda
1• Basics terms of income tax, form 26AS, 16, 16A, 16B & challans
2• Various heads of income, income and tax computation
3• Tax Slabs for Individuals, HUFs, Firms and Cos.
4• Act and Rules related to ITRs, Due dates, Late Fees
5• Persons required to file ITR
6• Which form to choose?
7• Pre-requisite information to prepare return
8• Method and process of filing income tax return
9• Demo of income tax return filing for salaried assessee
4
Let’s start with some basic concepts…
Basics terms of IT for ITR
a. Previous year and assessment year
b. Assessee, residential status and Permanent Account Number (PAN)
c. Deductor & Tax Deduction and Collection Account Number (TAN)
d. Income Tax Ward / Jurisdiction
e. Heads of Income (Details in subsequent slides)
f. Form 26AS, Challan Identification Number (CIN), Form 16/16A/16B/27Q (TD certificates)
6
Basics terms of IT for ITR
a. Exemption and deductions
b. Set off of losses
c. Gross Total Income
d. Chapter VI-A deduction
e. Total Income or Taxable Income
f. Tax on total income
g. Income chargeable to special rates
7
Heads of income
Heads of income
Income is computed under 5 heads:
a. Salary
b. House Property / Rental Income
c. Capital Gains
d. Business or Profession
e. Other sources (residual head)
Each head has its own sets of rules, methods, exemptions, deductions and what not!
9
Tax slabs
Tax slabs for AY 2017-2018
Taxable Income* Tax Rate
First 2,50,000 Nil
Then 2,50,001 to 5,00,000 10%
Then 5,00,001 to 10,00,000 20%
On balance > 10,00,000 30%
• Plus 15% as surcharge for income exceeding 1 cr
• Plus 3% cess on income tax + SC
*Please note:
These slabs are for resident individuals of less than 60 years of
age as well as HUF.
11
SS Tax slabs for AY 2017-2018
Taxable Income Tax Rate
(60~85 yrs)
Tax Rate
(85 yrs +)
First 3,00,000 Nil Nil
Then 3,00,001 to 5,00,000 10% Nil
Then 5,00,001 to 10,00,000 20% 20%
On balance > 10,00,000 30% 30%
• Plus 15% as surcharge for income exceeding 1 cr
• Plus 3% cess on income tax + SC
Senior citizen should be Resident of India
12
Companies and Firm’s Tax slabs for AY 2017-2018
Turnover Taxable
Income
Firm’s
Tax Rate
Domestic
Companies’
Tax Rate
Upto 5 cr
in 2015-16
Any 30% 29%
More than 5 cr in
FY 2015-16
Any 30% 30%
13
Taxable Income levels Firms Companies
Upto 1 cr Nil Nil
> 1 cr ~ 10cr 12% 7%
> 10 cr 12% 12%
Surcharges:
• Plus 3% cess on income tax + SC
Income under salary
Computing taxable salary
Amount
Summation of various components of salary XXXX
Less: Exemptions under section 10 XXXX
Add: Perquisite value / Perk Value XXXX
Add: Profits in lieu of salary XXXX
Less: State professional tax* XXXX
Taxable Salary XXXX
* States like Maharashtra, Karnataka, West Bengal,
Gujarat, MP, Tamil Nadu, Andhra Pradesh and
Telangana levy professional tax
15
Some components of salary
• Basic Salary and DA
• HRA, LTA/LTC
• Various allowances
• Bonuses / Incentives
• Gratuity, Leave Encashment
• Variable pay, commission
• Advance salary, Arrears of salary
etc.
16
Some taxable perquisites
a. Rent free accommodation
b. Car
c. ESOPs
d. Concessional Educational Facility
e. Free meals
f. Interest free loan / advances
g. Gift / Meal Voucher
(this list is not exhaustive)
17
HRA exemption
Least of 3 is exempted HRA, rest taxable:
• A. Actual HRA
• B. 40% / 50% of Basic (+DA*) 50% for Delhi, Mumbai, Kolkata & Chennai
40% for other (even for Gurgaon & Noida)
• C. Actual rent paid – 10% of Basic (+DA*)
* DA to be considered, if it is provided by employer
18
Some exempted allowances
• Transport Allowance / Conveyance Allowance -Rs. 1600 per month
• Children Education Allowance – Rs. 100 per month per child. Max. 2 Children
• Leave travel allowance*
• Official tour allowance*
* Conditions apply
19
Taxable income
Computing Total Income
Amount
Income under “Salary” or Taxable Salary XXXX
± Income or Loss under “House Property” XXXX
± Income or Loss under PGBP XXXX
± Income or Loss from Capital Gain XXXX
± Income or Loss from other sources (Residual head) XXXX
(-) Set off of Brought Forward losses (XXX)
= GROSS TOTAL INCOME XXXX
(-) Chapter VI-A deduction (XXXX)
(-) Deduction u/s 10A / 10B / 10BA (XXXX)
= TOTAL INCOME / TAXABLE INCOME XXXX
21
Computing Tax PayableParticulars Amount
TOTAL INCOME / TAXABLE INCOME XXXX
Tax on Total Income (both at normal and special rates) XXXX
(-) Rebate u/s 87A (XXXX)
Tax After Rebate XXXX
(+) Surcharge and Cess XXXX
Total Tax, SC and Cess XXXX
(-) Relief u/s 89/90/90A/91 (XXXX)
(+) Interest u/s 234A / 234B /234C XXXX
Total Tax and Interest XXXX
(-) TDS / TCS (XXXX)
(-) Advance Tax / Self Asst. Tax (XXXX)
Balance Tax Payable or (REFUND DUE) XXXX
22
Law on ITR in brief
Key takeaway of section 139
139: Return
of Income
Mandates persons required to file ITR (i.e. Original return) and due dates for ITRs
Loss return
Belated Return
Revised Return
24
Who is mandatorily required to file income tax return?
Section 139(1):
a. All companies, firms, LLPs
b. Any person whose Gross Total Income > basic exemption limit
a. For Eg., Individual Rs. 2.5 / 3.0 / 5.0 lacs
c. Any RESIDENT person who has any asset or financial interest outside India, even if his income is ZERO.
d. Certain more categories of assessees are required to file return – University, Colleges, Investment fund, Business trust etc.
25
Due dates of ITR (original)
31st
July
30th
September
30th
November
Slide No. 26
All Non-Audit Cases
(including non-
business assessees)
All Audit cases +
Companies + Partners of Audited
Firms
(other than transfer pricing)
All cases where
Transfer pricing audit is required
Loss / Belated / Revised return
If there is any loss under any head (except business depreciation) for current year, such return must be filed on or before the due date of filing original return, else such loss can not be carried forward.
Loss return
u/s 139(3)
Any return filed after due date is known as Belated Return. Belated return for AY 2017-18 can be filed upto 31st March 2018.
Belated return
u/s 139(4)
If there is any error or omission in original or belated return, a revised return can be filed. Revised return for AY 2017-18 can be filed upto March 31, 2019.
Revised return
u/s 139(5)
27
ITR Forms
Types of forms
Rule 12
ITR 1 (Sahaj)
ITR 2
ITR 3
ITR 4 (Sahaj)
ITR 5
ITR 6
ITR 7
29
Main Features ITR forms
• All forms are annexure less form.
• All forms amenable for electronic filing.
• No need to attach TDS/TCS certificate with return forms.
• No need to attach any financial statements.
• All information related to these documents to be captured in return.
• If required AO, may call these documents.
Modes of filing return
1. Paper return duly signed
2. Electronic return or E-Return1. Form ITR-V*
2. EvC
3. Digital signatures
*V stands for verification
31
What is EvC?
• Electronic Verification Code or EVC is a code generated for the purpose of e-verification of the person furnishing the income tax return.
• EVC will be a unique number linked to assessee’s PAN.
• It cannot be used for filing ITR of any other PAN.
• One EVC can be used to validate one return, irrespective, of assessment year or type of return.
• EVC generated via Aadhaar Card will be valid only for 10 minutes and in any other case, it will be valid for 72 hours.
32
33
EvCs
Forms for non-business assesseeIndividuals
Category Form Mode
Salary or Family Pension
And/or
One House Property Income w/o b/f loss
And/or
Income from Other Sources w/o Lottery or Race Horse Income
And
w/o Loss under any head of income
And
Total Income < 50 Lacs capital gain is missing
Total Income > 5 Lac
1E-file
Claiming refund E-file
Total income <= 5 Lac and not claiming refund Any Mode
Form 1(Sahaj) is the simplest form but with lots of riders 34
Forms for non-business assesseesIndividual and HUFs
Category Form Mode
All Individuals
- With no business income
- Not eligible to file ITR-1
All HUFs with no business income
Total Income > 5 Lac
2E-File
Claiming refund E-file
Total income <= 5 Lac and not claiming refund Any Mode
Form 2 is a residual form for non-business income assesse,
and can be used for all situations
35
Forms for Business AssesseeIndividuals and HUFs – Non presumptive business income
Category Form Mode
Must have income/loss under the head PGBP
And Not earning any presumptive income u/s 44AD/44ADA/44AE
And/or Income/loss from any other head
Total Income > 5 Lac
3E-File
Claiming refund E-file
Total income <= 5 Lac and not claiming refund Any Mode
Section 44ADA inserted w.e.f. AY 2017-18
If such assessee’s accounts are required to be audited
u/s 44AB, then only e-filing with digital signature is
permissible
36
Forms for Business AssesseeIndividuals, HUFs and Firms (not LLP)– Only presumptive business income
Category Form Mode
Must have Income under the head PGBP
• Such business income must be computed under any presumptive income
section viz., 44AD/44ADA/44AE
• And/or Salary or Family Pension
• And/or One House Property Income
• And/or Income from Other Sources
Total Income > 5 Lac
4E-File
Claiming refund E-file
Total income <= 5 Lac and not claiming refund Any Mode
Section 44ADA inserted w.e.f. AY 2017-18 for
Professionals like CAs
37
Forms for Business AssesseeCompanies
Category Form Mode
All Companies
excluding
section 8 company on which section
139(4A~4D) applies
6E-file
With digital
signatures
only
38
Forms for Business AssesseeTrusts etc.
Category Form Mode
Trusts and organisations referred to section
139(4A) / (4C) / (4D) / (4E)/ (4F)
including section 25 company on which
section 139(4A~4D) applies
7 E-file
All Political parties - Section 139(4B)
7E-file
With digital
signatures
only
39
Forms for Business Assesseeother remaining cases
Category Audit
required
Form Mode
Firms (not covered by form 4)
All LLPs
Any AOP / BoI
Any other person not covered
specifically else where
No
5
E-file
Yes
E-file
With digital
signatures
only
40
ITR-1
41
42
Sa
mp
le IT
R
Ack
no
wle
dg
em
en
t
43
Pre-requisites
You should be ready with:a. Aadhar Number or Enrollment ID (Sec 139AA*)
b. Passport Number
c. Details of all bank accounts with IFSC Codes
d. Bank interest income details
e. Salary certificates
f. Financial statements / any document impacting
income computation
g. Complete details of deduction of Ch. VI-A
h. Form 16, 16A, 16B, Form 26AS, Tax challans
i. Details of schedule AL, if applicable.
45*Aadhar made mandatory w.e.f AY 2017-18, except for certain
categories of person
Demonetisation effect
Any cash deposited :
during 09.11.2016 to 30.12.2016
in any bank account
If aggregate (either singly in one account or all bank accounts put together) cash deposits during the period ≥ Rs.2 lakh
To be reported in AY 2017-18 ITR
46
Bank accounts requirements• Furnish All bank account numbers.
• All accounts held during previous year.
• Should be either saving or current or cash credit or overdraft.
• No requirement for FDR/PPF/Term Loan Accounts, unless covered by demonetisation cash deposit disclosure requirement
• Joint accounts to be disclosed.
• Dormant accounts excluded (Not operational for 3 years).
• Only CBS based numbers to be given.
• Even if closed during the year you need to provide one.
• If you are guardian in a minor account – disclose that one too.
47
Process of E-Filing
E-filing process (offline)
49
E-filing process (online)
50
Offline XML preparation
52
53
Utility to generate digital signature file
54
ITD Portal dashboard
55
Questions?
Thank you ! !