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Key Points while filing ITR

By gkkedia Dt. June 21st, 2019

1. ITR-1 (Sahaj)

  • Individual Income Tax Return
  • Not Applicable in case of Non-Residents and not ordinarily resident
  • Not for an individual who is either Director in a company or has invested in unlisted equity shares
  • Income From Salary or Pension
  • Salary is mentioned after deduction of all Allowances, perquisites. No Column for Income exempt u/s 10
  • Full details as per Form 16 to be disclosed i.e, Salary ,Allowances, Perquisites, profit in lieu of salary & Deductions u/s 16 and Bifurcation required for Standard deduction, Entertainment allowance & Professional tax is required.
  • House Property (one house only) if no loss carry forward or brought forward
  • Other Sources (Other than income from lottery, race horses, dividend income in excess of Rs 10 Lacs or unexplained income)
  • If agriculture Income is less than Rs.5000
  • Total Income up to 50 Lacs
  • For House Property Income: House Tax paid, Standard Deduction of 30% & Interest payable to be disclosed.

2 ITR-2

  • Additional information with respect to residential status, such as, number of days of stay in India, jurisdiction of his residence and tax identification number in case he is a non-resident.
  • Details of Companies in which Directorship is held (i.e. Name of Company, PAN of Company, Whether shares of co are listed or not, DIN)
  • Details of unlisted equity shares held at any time during the previous year (i.e. Name of the Company, PAN of the Company, No. & cost of acquisition of shares held at the beginning of the year, details of sales/purchases made during the year, No. & cost of acquisition of shares held at the end of previous year).
  • Individual & HUF not having Income from Business or Profession
  • Income from Capital Gain
  • In case of Sale of Immovable Property: Details of Buyer (i.e. Name of Buyer, PAN of Buyer, Percentage share, Amount, Address of property, Pin Code, Furnish of PAN of buyer is mandatory if TDS deducted u/s 194-IA or Quoted by buyer in Registration Documents)
  • Not eligible to file ITR-1
  • A resident Assessee having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India
  • Income referred to in section 56(2)(x) to be disclosed in schedule OS.
  • Deduction u/s 54/54B/54EC/54F/54GB to disclosed separately in detail.
  • Salary is mentioned after deduction of all Allowances, perquisites. Specific Column to mention Income exempt u/s 10.
  • Schedule FA & Schedule AL to be taken care of.

3 ITR-3

  • Same amendments as mentioned in ITR-2 (Bold & Underlined).
  • For Individual/HUF having income from Business or Profession (i.e. Propertiorship, Partnership etc)
  • Schedule GST to be filed (i.e. GSTN No. & Annual value of outward supplies as per the GST return(s) filed)
  • Profit & Loss Account is bifurcated into 3 parts i.e. Manufacturing Account, Trading Account and P & L Account.

4. ITR-4 (Sugam)

  • Not for an individual who is either Director in a company or has invested in unlisted equity shares
  • Presumptive Business Income Tax return u/s 44AD, 44ADA& 44AE
  • For 44AD (Income of 8% for Cash Sales & 6% from amount received through Bank)
  • GSTR No. & turnover as per GSTR Return Filed
  • If Books of Accounts not maintained, then additional details required i.e, Capital, Loans & advances taken, other liabilities, Fixed Assets, Bank Balance, Cash Loans & Advances given & other Assets
  • Income from one house only if no loss carry forward or brought forward
  • Income computed shall be presumed to have computed after giving full effect of every loss, allowance, depreciation or deduction under Income Tax Act
  • Income from Salary or Pension
  • This form Cannot be used for
    • Agriculture income more than 5000
    • More than one house property
    • Capital gain
    • Speculative Income
    • Income from agency business or income from commission or brokerage
    • Claiming relief u/s 90,90A,91
    • Having Assets abroad
    • Dividend Income exceeding Rs. 10 Lacs.

5. ITR-5

  • For person Other than individual, HUF, Company and Person filing ITR Form 7 (AOP/BOI)
  • Schedule GST to be filed (i.e. GSTN No. & Annual value of outward supplies as per the GST return(s) filed)
  • Profit & Loss Account is bifurcated into 3 parts i.e. Manufacturing Account, Trading Account and P & L Account.

6. ITR-6

  • For Companies , other than companies claiming exemption u/s 11
  • Schedule AL-1 Assets and liabilities as at the end of the year (mandatorily required to be filled up by an unlisted company) (other than a start-up for which Schedule AL-2 is to be filled up)
  • Details to be filed in Schedule AL 1 i.e. Details of Land & Building, Details of Listed Shares, Details of Unlisted Shares.
  • Schedule GST Deleted for Break-up of total expenditure with entities registered or not registered under the GST (To to be filled up by the assessee who is not liable to get accounts audited u/s 44AB), But new Schedule GST to be filed (i.e. GSTN No. & Annual value of outward supplies as per the GST return(s) filed)
  • Separate format for financials for companies on which INDAS is applicable
  • Information has been asked for total turnover/ gross receipts in the previous year 2016-17 exceed Rs. 250 Crore rupees or not.

7. ITR-7

  • For persons including companies who are required to furnish return u/s 139(4A)/(4B)/(4C)/(4D)/(4E)/(4F)(Trusts)
  • Schedule SH to be filed, in case of Unlisted Company i. e. Details of shareholding at the end of the previous year, Details of equity share application money pending allotment, Details of shareholders who is not a shareholder at the end of the previous year but was a shareholder at any time during the previous year

1. Standard Deduction of Rs. 40,000 is allowed (As per Interim Budget, 2019 it is increased to Rs. 50,000)

2. In case of Long Term Capital Gain (Sec – 112A) arise from the transfer of a long-term capital asset being an equity share in a company or a unit of an equity oriented fund or a unit of a business trust, LTCG is exempt only if Capital Gain is upto Rs. 1 Lacs, otherwise it is taxable @ 10%. (i.e. if LTCG is Rs. 1,00,500, then tax will be levied on Rs. 500@10%)

3. Cost of acquisition if shares purchased before 01.02.2018 (Sec -55(2)(ac)) will be Higher of:

(i) the cost of acquisition of such asset; and
(ii) lower of—
(A) the fair market value of such asset; and
(B) the full value of consideration received or accruing as a result of the transfer of the capital asset.

4. In all above ITR’s separate column for Fee u/s 234F has been included

Applicable for Current Financial Year
Tax Bracket

Below the age of 60 Years (i.e. 59 years)

  • Upto 2,50,000 → NIL
  • 2,50,001 – 5,00,000 → 5%
  • 5,00,001 – 10,00,000 → 20%
  • Above 10,00,001 → 30%

60 Years old or more but less than 80 years (i.e. 79 years)

  • Upto 3,00,000 → NIL
  • 3,00,001 – 5,00,000 → 5%
  • 5,00,001 – 10,00,000 → 20%
  • Above 10,00,001 → 30%

80 Years or more

  • Upto 5,00,000 → NIL
  • 5,00,001-10,00,000 → 20%
  • Above 10,00,001 → 30%

For Companies:

  • Where Total turnover/ gross receipts in the previous year 2016-17 does not exceeds 250 cr.: Rate25%
  • Royalties received from GOI and Fees for rendering Technical Services other than domestic Company: Rate 50%

Surcharge

  • Surcharge is 10% of Income tax if net income exceeds Rs.50Lacs up to 1 Crore (Individual /AOP /BOI /HUF)
  • Surcharge is 15% of Income tax if net income exceeds Rs. 1 Crore (Individual/AOP/BOI/HUF)
  • Surcharge is 12% of Income tax if net income exceeds Rs. 1 Crore (Partnership Firm/Local Authority/Co-operative Society)
  • Surcharge is 7% of Income tax if net income of the domestic company is greater than Rs. 1 Crore but less than Rs. 10 crore
  • Surcharge is 12% of Income tax if net income of the domestic company exceeds Rs. 10 crore
  • Surcharge is 2% of Income tax if net income of the international company is greater than Rs. 1 Crore but less than Rs. 10 crore
  • Surcharge is 5% of Income tax if net income of the international company exceeds Rs. 10 crore

Cess

  • Health & Education Cess of 4%

 

87A – 2,500 tax rebate → Where Total Income or Taxable Income of a resident person does not exceed Rs.3,50,000 (As per Interim Budget 2019, rebate increased to Rs. 12,500 if Total Income is upto Rs. 5,00,000)

80C Exemption → Rs. 1,50,000 :

  • Insurance of Individual, Spouse and any child. Member of HUF.
  • Subscription to unit of mutual fund.
  • Tuition Fee
  • Payment of installment for Loan of House
  • Stamp duty, registration fee etc
  • FD with Bank- 5 Years
  • PF/ GPF/ PPF
  • Sukanya Samriddhi Account Scheme

80CCC

  • Annuity Plan of LIC or any other insurer for receiving
  • pension from pension fund 150000/-

80CCD(1)

  • Contribution 10% of Basic Salary + DA for salaried employees & 10% of Gross Income for Self-Employed persons in NPS Scheme

80CCD(1b)

(Total of 80C + 80CCC +80CCD(1) should not exceed Rs. 1,50,000)

  • Upto Rs. 50,000 can be claimed if excess has been contributed.

80CCG : Rajiv Gandhi Equity Saving Scheme

  • If assessee is a new retail investor
  • If his gross total income does not exceed Rs. 12 lakhs
  • Deduction is 50 percent of amount invested or Rs. 25,000.00 whichever is less.

80 D : Medical Insurance Premia

  • Parents included
  • For Assessee & Family (Family means spouse & dependent children)
  • Rs. 25,000
  • HUF also
  • Rs.50,000 for senior citizen
  • Preventive Health Checkup of Rs. 5000

80DD : Maintenance & medical treatment of a handicapped dependent who is a person with disability

  • 75,000
  • 1,25,000 in case of severe disability
  • Irrespective of amount incurred

80DDB : Medical treatment of self or dependent parent child etc.

  • 40,000 or actual amount paid whichever is lower
  • 1,00,000 or actual amount paid whichever is lower for senior citizen or very senior citizen (Earlier 60,000 for senior citizen or actual amount paid whichever is lower 80,000 for very senior citizen or actual amount paid whichever is lower)

80E : Interest on loan taken for higher education(Applicable to NRI’s)

  • Full Interest
  • Till 8 Years

Whichever is earlier

80G :

  • 100% deduction for Prime Minister’s National Relief fund
  • 50% deduction Prime Minister’s Drought Relief Fund

(No Benefit under Income Tax Act for investment in Pradhan Mantri Vaya Vandana Yojana (PMVVY)

80TTA : 10,000 on Savings Bank Account Interest ( In case of Senior Citizen, if Deduction u/s 80TTB is availed, then no deduction u/s 80TTA will be allowed)

80TTB : 50,000 on Interest on Deposits for Senior Citizens (Age exceeds 60 years or more)

80U : Person with disability

  • self
  • 75,000
  • 1,25,000 in case of Severe disability
  • Irrespective of amount incurred

 

54 Exemption :

  • Only when residential house is sold
  • -1/+2/+3 ( one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed)
  • Cost of New House directly reduced for the purpose of Capital Gain

 

54F : Any Long term Capital Asset Sold

  • Only in India
  • Only one (As per Interim Budget 2019, two has been substituted for one) residential home at the time of purchase of new asset
  • Amount Exempt= Amount Invested/Net Sale Consideration

 

Capital Gain Account Scheme (Both 54 & 54F):

  • Amount should be deposited before filing of return u/s 139
  • Amount should be utilized within 2 yrs in case of purchase of New House
  • Amount should be utilized within 3 yrs in case of Construction of New House

 

54EC : Rs.50 Lakhs on investment (Within 6 months of transfer) in certain bonds redeemable after 3 years*

  • Restricted to one F.Y. only
  • *By NHAI or REC or notified by CG (From AY 2018-19)
  • By FA, 2018 redemption time changed to 5 Years

 

54EE : Invest up to Rs. 50 Lakhs within 6 months of transfer in Specified asset (Units of funds notified by CG (Basically for Start – ups)

Interest on Housing Loan :

  • Interest of Rs. 2,00,000 in case of self occupied (If loan
  • taken for Reconstruction etc., then 30,000 is allowed)/In
  • case of rented property entire interest can be claimed
  • Standard Deduction 30%
  • Pre Construction period interest in 5 equal installments from the previous year in which house is constructed / acquired. Will be allowed in the year in which construction is completed.

(Further, Maximum of Rs. 2,00,000 loss of House property is allowed to set off in a previous year and balance can be carried to next year)

  • Period of holding Long term capital gain of immovable property is 24 Months instead of 36 Months
  • Base year for Cost Inflation Index shifted to FY 2001-02 with CII 100. For FY 2018-19 CII is 280.
  • Limit of cash donation 2000.
  • No need to sent ITR-V to CPC, e-verify your return through: Net Banking, Bank ATM, Aadhaar OTP, Bank Account Number, DEMAT Account Number.
  • Standard deduction of Rs. 40,000 is allowed & Transport allowance of Rs.19,200 and Medical Allowance of Rs. 15,000 will not be allowed. (As per Interim Budget 2019, Standard Deduction increased to Rs. 50,000)
  • Form26AS: Details in respect to incomes on which TDS has been deducted during the year.
  • Form 16: Issued by employer for details regarding Salary and TDS deducted
  • Form 16A: Issued for other than salary on which Salary deducted
  • If Rent paid is more than Rs. 1,00,000 in a F. Y, then there is mandatory requirement to provide PAN of Tenant.
  • As per Section 194IB: Individual is required to deduct TDS for rent exceeding 50,000 for a month @ 5%. Further, there is no requirement of taking TAN.
  • If Total Income of assesse exceeds Rs. 50,00,000 then there is requirement to provide details of following in Schedule AL(Assets & liabilities):Land, Building, Cash in Hand, Jewellery Bullion etc., Vehicles etc.)
  • In Interim Budget 2019: TDS u/s 194I threshold for rent increased from Rs 1.8 lakh to 2.4 lakh.
  • In Interim Budget 2019: TDS u/s 194A threshold for Interest increased from Rs 10.000 to 40,000. (As per FA 2018 (AY 2019-20), for senior Citizen the limit for deduction of TDS is Rs. 50,000)
  • In Interim Budget 2019: No tax on notional rent on second house: Assessee can choose two self occupied property, hence no tax on second house property also.
  • In Interim Budget 2019: Benefit of rollover of capital tax gains to be increased from investment in one residential house to that in two residential houses, for a taxpayer having capital gains up to Rs 2 crore, can be exercised once in a lifetime

Websites:

  • Incometaxindia.gov.in: for Income Tax Laws/updates/ circulars/notifications etc.
  • Incometaxindiaefiling.gov.in: For login to income tax portal/downloading 26AS/filing income tax & other returns etc.

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