Author name: Lipsa Bhut

The Strengths of Completing ITR within the pre-defined Time Frame

Submitting your ITR on time makes you feel responsible and comfortable for yourself, but the advantages don’t stop there. Filing your ITR on time will help you in a variety of ways, including:

Simple Loan Approval Registering

The Income Tax return will essentially support clients when requesting a car loan (2-wheeler or 4-wheeler), a home mortgage and so on.

Request a Tax Refund

If you are subject to reimbursement from the Income Tax Department, you can download your Income Tax Return as soon as feasible to get your reimbursement as quickly as practicable.

Income and Address Confirmation

An income tax return could be regarded as concrete evidence of your income and address used when applying for a loan or visa.

Prompt Visa Approval

At the hour of passport application, most embassies worldwide ask you to outfit copies of your financial records for the past couple of years.

Retain the Losses Forward

On the off chance that you release an income tax return on time, you will be permitted to carry forward losses to the coming years. This cause could very well apply this to eliminate taxes in the next few years.

Avoiding Punishment and Litigation

If you do not document your ITR, the income tax officer will recommend proceedings for prosecution for a period of 3 months to 2 years, and therefore a levy.

In case you end up owing more than Rs. Twenty-five lakhs in taxes, authorities can stretch the term to 7 years. The IT department will not launch the proceedings mentioned above if the net money liability is only about Rs. 3000.

The Cutoff Time for Filing The Individual Tax Returns

The government of India gives citizens several exemptions to document their ITR, but we’re all individual human beings, and we sometimes are not able to file on time. The timeline for filing ITR for the financial year 2020-2021 was January 10, 2021.

Individuals predominantly have until July 31 to complete their tax statements for any particular year.

Regrettably, considering the recent influx of COVID-19 and its implications on every major enterprise, the GoI agreed to extend the due date for filing tax returns for 2020-2021 to November 30, which itself was eventually replaced to December 31.

Negative Repercussions of Late Registration of ITR

The following are recorded underneath:

Interest according to Section 234A of the Income Tax Act of 1961:

Section 234A enforces an interest payment for missing to file income tax returns where any tax is owed.

Failure to file an ITR can draw in the interest of 1% monthly and partly before the return is filed on the neglected outstanding tax sum.

Then, if you have a remaining tax payable of Rs. 8,000 and failed to file your ITR by the given deadline of July 31, and you file your financial records on October 15, you will then have to pay an interest penalty of 1% per month x 3 months on the remaining tax aggregate amount of Rs 8,000, i.e., Rs 240.

Losses cannot be carried forward

Losses will not be permitted to be carried forward if the income tax return is filed well beyond the closing date. Nevertheless, even though the refund of gain/loss is filed after the due date, the loss under the heading “Income from house property” will indeed be brought forward.

Demand for Tax Reimbursement

Interest on refund under section 244A can be overlooked if the gap in Filing is liable to you for the time in which you lodged a late return. Section 244 A provides that an applicant is subject to interest on the sum of income tax refund received on their income tax return.

Where an applicant has filed their income tax return, and the estimated taxes payable outweigh the assessee’s financial obligations, and the assessee claims the surplus taxes paid as a refund and the same is found to be expected to him, the income tax scheme enables for the interest payment on the total of income-tax refund to the

Fine under Section 234F

If a person declines to file a tax return by the given deadline, the assessing officer can enforce the accompanying charge:

The deadline of Filing	Payments That Can Be Levied
If the return is submitted past the closing date but on or before December 31	Rs 5000
Any other event	Rs 10000

Make note that, If the individual’s taxable profit doesn’t relatively equal to or exceed five lakh rupees, the fee incurred under this clause is confined to one thousand rupees only.

Lawsuit for Failing to Supply Return of Income:

If the return of income is not reported by the given deadline, you can consider obtaining a letter of prosecution under Section 276CC.

What Technically is a Belated Return?

A belated return is a return that is not filed on or before the due date as mentioned in the Income Tax Act.

Section 139 of the corresponding act specifies that any citizen who has not yet completed their income tax returns are entitled to several types of returns from the IT department, prompting them to do it anyway. The late return is lodged following Clause 139(4) of the Act.

Thus, according to Section 139(4) of the Income Tax Act:

• If an applicant or an individual is incompetent to file income tax returns before the specified deadline enumerated in Article 139(1), then
• The applicant or agency might very well further register late or belated income tax returns within that year since the end of the relevant taxation year or before the termination or conclusion of the assessment as per Section 144, whichever happens, earlier.
• Taxpayers or individuals who file income tax returns late may suffer Rs 5,000 fines under Section 271F of the Act.

But even so, the IT department would implement no tax on income returns that were not expected to be automatically paid as per the conditions outlined in Section 139(1), even though the returns were reported after the year’s end.

In addition, an individual can focus on providing a belated return if he delays filing a return within the period specified in a notice under the provisions of Section 142. (1).

The taxpayer should file belated ITRs before the end of the relevant analysis year or after the end of the assessment year.

It is vital to recognize that filing a belated return is the same as filing an income tax return before the actual due date.

Will a Corporation Be Obligated To File Income Tax Returns Even If It Was Not In A Commercial Enterprise During The Financial Year?

A corporation or organization that did not perform any sales or activities during the relevant fiscal year has the luxury of considering to choose whether or not to register its income tax returns.

What is the procedure for filing an ITR?

Any taxpayer can file an Income Tax Return in two distinct ways:

• Offline
• Online

Offline Protocol With Detailed Step-By-Step Instructions

To document an income tax return in the offline format, the user will have to do the following steps:

Step 1: At first, the concerned applicant must visit the official Income Tax e-Filing portal, i.e., https://www.incometaxindiaefiling.gov.in/

Step 2: Next, they must select the “IT Return Preparation Software” option from the tab “Download”. Then, they will have to mention the appropriate “Assessment Year” and download the proper ITR form either in JAVA or Excel format as desired.

Step 3: Then, the applicant will have the Fill the ITR form with valid credentials.

(To save time, the client can likewise download the Pre-filled XML for pre-filling the individual and different subtleties. To download client is needed to Login into the e-Filing entry and snap on “Download Pre-Filled XML” under the menu “My Account”)

Step 4: The applicant will have to Confirm all the sheets of the ITR form and consequently Calculate the gross Tax payable.

Step 5: They must then Generate and Save the XML for future records.

Step 6: After Login in to the e-Filing portal successfully, they must choose the Income Tax Return option from under the e-File menu tab.

Step 7: PAN will be auto-populated, and hence, they will have to Select Assessment Year, ITR Form Number and mention the Filing Type as “Original/Revised Return” and Submission Mode as “Upload XML.”

Step 8: Then, they will be required to choose any one of the following options to check the Income Tax Return:

• Digital Signature Certificate (DSC)
• AADHAAR OTP sent to the linked phone number
• Then generate EVC through the “Generate EVC” option available in “My Account.”
• I would like to e-verify later. Please remind me. Then click on the “Continue” tab.
• I would not want to e-verify this Income Tax Return and would also like to mail a signed ITR-V to “Centralized Processing Center, Income Tax Department, Bengaluru-560 500.”

Step 9: Subsequently, they will have to Add the ITR XML File and click on the “Submit” option available in a box at the end of the screen

Step 10

• In case the “DSC” option is clicked by the applicant in “Step 8”, then they will have to Attach the Digital Signature
• On the off chance that “AADHAAR OTP” is chosen in “Step 8”, then they must Enter the AADHAAR OTP received in the mobile number registered with UIDAI
• If “EVC” is selected from in “Step 8”, they will be required to Enter the EVC received in the registered mobile number.
• If the “E-verify later” option is chosen in “Step 8”, then the portal will submit ITR only, but the process of ITR filing is not complete until it is verified.
• If the “I don’t want to e-verify” option is chosen in “Step 8”, then, you can either e-verify the same by clicking on the “e-verify return” option under the menu “My Account” or send the signed ITR-V to CPC, Bengaluru.

Step 11: Finally, the applicant can Submit the ITR.

Online Protocol with detailed Step-by-Step Instructions

This mode is only likely to apply to ITR-1 and ITR-4. To file an ITR online, the applicant must take the measures outlined herein. As a result, people with Salary income and/or income from other sources or house assets will only file returns in this format.

Step 1: To start, the claimant must go to the official Income Tax e-Filing website, which is located at https://www.incometaxindiaefiling.gov.in/.

Step 2: After Login into e-Filing, they must pick the Income Tax Return under the E-file Menu tab.

Step 3: PAN will be auto-populated on the website against the pre-entered credentials. Therefore, the applicant must Select Assessment Year, Select ITR Form Number, Mention the Filing Type as “Original/Revised Return” and Submission Mode as “Prepare and Submit Online.”

Step 4: Then, they will have to Fill the relevant and mandatory fields of the ITR form with appropriate particulars.

(It is advised that you always click “Save Draft” to prevent data loss.)

Step 5: In the next step, the applicant will have to click on the appropriate verification option in the tab “Taxes Paid and Verification.”

• I would like to e-Verify (To use this alternative, you must have a legitimate Aadhar/PrevalidatedDemat Account/Digital Signature certificate recorded in e-Filing against your PAN.)
• I would like to e-Verify later within 120 days from the date of Filing.
• I don’t want to e-Verify and would like to send signed ITR-V through normal or speed post to “Centralized Processing Center, Income Tax Department, Bengaluru-560 500” within 120 days from the date of Filing.

Step 6: Until uploading the document, ensure that the applicant double-checks all of the data by clicking the “Preview and Apply” button to review all ITR data.

Step 7: Then, they must Submit the ITR by clicking on the button available at the bottom of the screen.

Step 8: Steps to be followed for e-Verification of ITR:

• On the off chance that the “I’d like to e-verify” alternative is clicked in “Step 5,” then the applicant must enter the AADHAAR OTP received in the mobile number identified with UIDAI, followed by the EVC received in the enlisted mobile number.
• If the “E-verify later” alternative is selected in “Phase 5”, the portal will submit the ITR. Still, the portal will not complete the procedure of ITR filing until it is validated.
• In the event that the “I don’t want to e-verify” option is selected in “Step 5”, you could always e-verify the same by deciding on the “e-verify return” option under the “My Account” menu or else submit the signed ITR-V to CPC, Bengaluru.

Step 9: The claimant must enter the EVC/OTP within 60 seconds, or else the ITR will be auto-submitted and must be e-verified later by clicking on the “e-verify return” option under the “My Account” menu.

Form 12BB for Claiming Income Tax Deductions by Employees: Section 192 of the relevant Income Tax Act states that anyone who is liable for paying every salary shall be charged “Under the Head Salary” must exempt TDS.

As a consequence, section 192 applies only if the three specifications mentioned below are met.
There are two types of people present in the scenario: employers and employees.

• The employer’s contribution to the employee comes in the form of a paycheck.
• The benefit chargeable under the head wage is in excess of the estimated sum not considered for taxation. (In accordance with the relevant Income Tax Slab)

 

TDS is expected to be accumulated by all companies. The employer’s legal standing (e.g., HUF, business corporation, etc.) is inconsequential under the act. Besides this, the number of workers used by the employer when measuring and deducting TDS is similarly of no use and does not play any role.

What is TDS?

Citizens, but even more so compensated individuals, who are expected to pay tax ahead of time, also widely recognized as tax deducted at source (TDS), are compelled by their business owners to apply investment declarations at the beginning of each new budgetary year.

• Such tax-deductible expenditure statements will reduce the tax burden because TDS is withdrawn from your estimated income statement.
• Tax Deducted at Source or the popularly referred to as TDS is a nominal sum that is withdrawn anytime a specific payment is made, such as a paycheck, commission, rent, interest, professional fees, and so on.
• The person who contributes deducts tax at the source and collects the payment/income is obligated to pay tax.
• It reduces tax-dodging since tax is paid at the exact hour of the payment made.
• You have to make an initial estimate of the funds you aim to introduce at the beginning of the monetary year.
• Legitimate documents are not deemed necessary until the end of the following economic year. You have the alternative of investing less or more than the amount mentioned earlier. The ultimate investment decisions often will not have to be essentially precisely as said.
• You are not necessary to request evidence of investment as part of this declaration. However, documentation of investment is asked for at a later point in time; that’s exactly where Form 12BB comes into the equation.

 

What Exactly is Form-12 BB?

Form 12BB is a clear statement of an individual employee’s eligibility for tax deductions.

Form 12BB is the form that you fill out with the appropriate credentials and send to the employer – and most importantly, not the Income Tax Department – because then your employer can determine the total how much income tax to exempt from your monthly income.

Fundamentally, it includes information on tax-deductible investments and savings that you will generate during the current budget season.

You can exclude qualifying tangible assets or expenditures for which a tax refund is issued.

Each and every tax-paying individual should never forget that Form 12BB must be filed alongside factual evidence of assets or expenditures on which state subsidies are being tried to claim, and it applies to all employed tax-paying citizens.

There really was no uniform format for declaring the tax-deductible spending and contributions formerly. With impact from June 1st, 2016, the Income Tax Department has incorporated a standardized framework for Form 12BB.

12BB Format

Form 12BB is now in a regular format owing to the Income Tax Department. The taxpayer must prepare it in accordance with Income Tax Rule 26C.

You can get the form 12BB online in pdf or word template, download it, fill it out, and consequently email it to your boss along with the required proof documents.

Additionally, you can fill out Form 12BB electronically and mail it to your HR team, or you can print, sign, and email it to your boss along with the appropriate certificates.

Is It Necessary To Submit Form 12BB?

With force from June 1st, 2016, each and every employed individual is supposed to declare Form 12BB with his employer in exchange for receiving tax benefits on such savings and expenditures.

And therefore, it is likewise necessary to submit proper supporting documentation along with Form 12BB.

What Do You Do Well Before Figuring Out Form 12BB?

Examine the CTC structure closely to determine if HRA or LTA are included with your kit.

• You can only assert these allowances if the company clearly and explicitly has them in the CTC arrangement.
• Go to the bank or download your interest certificate, loan repayment plan, and bank account balance online.
• Organize and keep in hand’s reach all of your receipts for all of your tax-exempt income costs and deposits, such as rent receipts, LIC rate receipts, tuition fees receipts, gift receipts, so on and so forth.

 

Which Statements Am I Required To Produce on Form 12BB?

When filing Form 12BB, you can report the following tax-deductible income elements, along with relevant verification certificates (where applicable):

Allowance for Housing Rent or the HRA

You will seek the tax exclusion for Housing Rent Allowance in the very first section of Form 12BB (HRA). To assert HRA, you would have to have the necessary statement and information:

1. Payment slips with the homeowner’s name and address, as well as the,
2. landlord’s PAN (in case the annual rent charged exceeds Rs.1 lakh)

Points to consider when requesting the HRA tax exemption:

• One can only guarantee HRA tax exemption if and only if HRA is part of one CTC.
• If your HRA is not included in your CTC and you reside in a rental home, you can obtain a tax break under Section 80GG.
• Rent invoices are only requested if the monthly rent surpasses Rs. 3,000.
• In case you live in your very own residence, you cannot demand HRA.
• If you pay your parents’ rent, remind them to include it as profits as they file their income tax return.
• Never email altered rent receipts; doing so might land you in hot water with the IRS.

Regardless of when the boss would not request a tenancy lease, it is smart to have one written on Rs. 500 stamp paper or at the rate of your state for documentation for future reference.

Allowance for Leave Travel or the LTA

The employee may also identify LTA for accounting purposes.

Section 10 (5), according to the Income Tax Act of 1961, provides tax-advantaged treatment for an employee’s LTA.

However, one should always acknowledge that the taxpayers can only seek tax incentives on LTA for domestic travel and only up to two times in a four-year period.

Points to bear in mind while asking for LTA tax exemption:

1. One can only confirm LTA tax exemption if and only if LTA is part of one CTC.
2. Clients must attach travel documents such as boarding passes, airline fares, travel agency invoices, boarding passes, and so on to their employers in order to receive LTA.

You may invoke LTA on behalf of yourself, your partner, your children, your dependent parents, and your responsible sibling.

1. It can be asserted twice in a four-year span.
2. Under a situation where you only claimed one LTA in the previous four-year phase, you will continue and use the second LTA, but you should really do so in the first year of the current four-year frame.
3. It is only permitted for domestic travel, not overseas travel.

Home Loan Interest

When completing form 12BB, the employee will claim tax deductions on the home loan under sections 80C (principal repaid) and 24 (home loan interest payment).

You may also subtract filing fees, excise duty, and brokerage fees for tax purposes in different provisions.

The applicant should always fill out the following details on Form 12BB:

During the fiscal year, interest payable/paid to the debtor

• The name and the corresponding residential address of the lender from which the loan is obtained
• PAN of the lender: Financial Institutions/Employers/Others, from which the loan is obtained

 

The following documents are eligible to demand a deduction under Section 24B for home loan interest payments:

A statement or certificate specifying the overall EMI owed, but also the interest and primary elements.

• Authorization certificate of possession/completion of a building
• Employee self-declaration about whether the house is owned or rented.

 

Details one should keep in mind when seeking the Interest on Home Loan Tax Exemption:

1. In case you happen to take a home loan on a partnership basis, you will claim the interest deduction percentage-wise.
2. If you obtained a home mortgage from a lender except for a bank, such as associates, family, or a moneylender, the cost of borrowing would be deducted under section 24 only while you issue a certificate of interest from the source to whom your interest accrues.

The reimbursement of principal on loan purchased by associates, family, or another moneylender, except maybe a trust, is not taxable under section 80C.

Parts 80C, 80CCC, 80CCD, 80D, and 80E Deduction

One may assert a variety of deductions under section 80C and its provisions when filing form 12BB.

Chapter VI-A mentions income tax deductions under different sections such as 80C, 80D (Medical insurance), and 80G (Donation). Scientific proof of spending or expense sustained is necessary to obtain a deduction.

After deducting the claimed income tax exemptions, the remaining gross income will be charged at the individual’s income tax slab rates. The following are the benefits permissible under different provisions of Chapter VIA of the Income Tax Act.

1. Section 80C: Life insurance premiums or investments in PPF, ELSS, NPS, PPF, kid’s tuition fees, etc., with a gross cap of Rs. 1.5 lakh.
2. Section 80CCC: Reimbursement for annuity contract premiums charged
3. Section 80CCD: Additional NPS interventions
4. Section 80D: Health care premiums charged
5. Section 80E: School or any other education filed related loan interest
6. Section 80G: Donations to designated charities
7. Section 80TTA: Interest as gained on a savings account

What Happens In The Event If You Fail To Attach Your Form 12bb To Your Employer?

In case you fail to apply form 12BB to the employer within the specified timeframe specified, the employer will be unable to provide you with the benefits of deductions and other tax exemptions. As a direct consequence, any overpayment of TDS will be withdrawn from your monthly wage.

You may, furthermore, seek a refund of such excess TDS when filing your income tax return.

What Is The Objective Of A Declaration Of Investment?

Workers must file a report detailing the deductions and privileges they choose to assert. Based on these declarations, the contractor will withhold TDS from the employee’s wages.

In many of these circumstances, the concerned taxpayer must make these contributions through the employer’s HR portal.

Income Considered for Taxation Under The Header “House Property”: Property value from home, whether a dwelling or land appurtenant to it, of which the taxpayer is the landlord, is assessed under the category “Income from house property.”

A property estate may be your apartment, an office, a store, a building, or any land attached to a building, such as a parking lot. The Income Tax Act makes no clear distinction between industrial and residential properties.

In the income tax return, all forms of assets are assessed under the header’ income from house land.’

When land is used for a particular trade or some profession that draws in revenue or for freelance work, it is accounted for under the ‘income from business and profession’ label. Replacement and maintenance expenditures are covered under business and corporate expenses.

As a whole, profits are taxable under this heading “Income from House Property” if the following three conditions have been met competently:

• The property should have any buildings or lands that are attached to it.
• The applicant must necessarily be the property’s primary stakeholder.
• The property also shouldn’t be utilized by the landlord for any business or occupation taken on by them, the revenues of which are considered for taxation under the corresponding Income Tax Act.

How Many Categories Of House Property Are Eligible Under This Taxation System?

1. Possession of a Self-Occupied House: A self-occupied house is one that is only used for residential uses. This may be populated by the taxpayer’s relatives (parents, spouse, and children). For Accounting Purposes, an empty apartment property is termed as self-occupied.
2. Rent Out the House Estate: For tax reasons, a house property that is rented for the whole or a portion of the fiscal year is called a let-out house estate.
3. Passed Down Property: Based on its use, an inherited house, i.e., one passed down by family, grandparents, and so forth, maybe either self-occupied or let out.

Portions of Sections 22 to 27

Sections 22 to 27 of the corresponding Income Tax Act deal with the taxation of revenue from residential real estate.

The portions are summarized in the following points –

• Section 22 – Whose Revenue from House Property Is Subject to taxation?
• Section 23 – Annual Value Estimation
• Section 24 – Authorized Exemptions for Household Income
• Section 25 – Income from House Property Aspects or Sums Not Liable to any deduction
• Section 25AA – Unquantifiable rent found after 1.4.2001
• Section 25B – Rent arrears obtained
• Section 26 – Estate shared by co-owners.
• Section 27 – Classified ownership circumstances for income liable for taxation on residential property

What is the Annual Value of Property?

The annual valuation of real estate is the sum of funding that it will theoretically or potentially earn in any given accounting period year or financial year.

Based on the current Income Tax Act, the Annual Value of the property is the property’s underlying potential to gain income and is taxable to the owner. The revenue considered for taxation may be the Gross Annual Value (GAV), Net Annual Value (NAV), or Annual Value, as deemed suitable for the situation.

The estate’s gross annual Value will be the greater of

• rent paid or receivable
• fair book value
• Municipal assessment

The Net Annual Value would be the Gross Annual Value minus the local taxes charged by the resident.

Annual Value, as mentioned, is the Net Annual Value subtracted Section 24 Concessions?

According to Section 24, the following exemptions for income from house property should be deemed necessary while making calculations:

• Section 24(a) Deduction mentions a 30 percent deduction on the Net Annual Value.
• Equity interest lent to purchase, construct, fix, renew, or reconstitute estate is exempt under Section 24(b).

How to Estimate House Property Income?

Given below is a complete step by step guide as to how to figure out how much money you can generate from a house:

1. At first, assess the property’s Gross Annual Value (GAV): It needs to be noted that A self-occupied house has no gross annual valuation. It is equivalent to the rent received for a house on rent for a let-out home.
2. Lower Property Taxes: While assessed, property taxes are excluded from the GAV of the estate.
3. Following, one needs to Estimate the Net Annual Value (NAV), which equals the Gross Annual Value minus the Property Tax.
4. Subtract 30% of NAV as an average tax reduction: Section 24 of the Income Tax Act lays down a provision for 30% deductions from NAV. Such costs, such as painting and maintenance, cannot be listed as tax deductions in violation of the 30% cap under this provision.
5. Evaluate your benefit from residential properties: The amount that results is your revenue from house property. This is assessed at the applicable slab rate deemed fit for your purpose.
6. The risk from house property: If you purchase a self-occupied house with a zero GAV, demanding the home loan interest exemption would lead to the loss of house property. This deficit will be compensated by revenue from other sources.

Income from a Property Is Exempt From Taxation

Income from a property is exempt from taxation in the following contexts:

Although that accounting of revenue from house estate comprises any conceivable building or house that may exist, there are very few exceptions. The following property assets are not included in the revenue computation:

• Property used by the occupant for the benefit of his or her own residential purpose
• Property rights in a single property, but the property is not used as a dwelling commodity because the occupant lives somewhere else due to employment obligations.
• Farmhouses boosting agricultural production and income
• Anyone property that can be deemed as a palace used by an ex-ruler
• A municipal government’s domain
• Any licensed trade union’s land
• Property financed by a Scheduled Tribe member
• Any agency Established by law or an organization or group sponsored by the state to further the needs of Scheduled Castes, Scheduled Tribes, or maybe both.
• Such a government-created corporation that promotes the rights of members of a minority community.
• Any cooperative organization founded to further the preferences of Scheduled Castes or Scheduled Tribes members or perhaps both.
• Property revenue from the renting of repositories for the storing, distribution, or facilitation of commodity marketing by an authority established under some policy for commodity marketing
• Any institution contributing to the advancement of ‘Khadi and Village Industries
• An individual’s house property which is occupied by them and that has not been available for rent in the preceding year
• Household lands kept for voluntary interests of some kind which might include charity
• Any political party’s owned property

Which Income Tax return Form Should Be Used To Record Income From A House?

A person who pays tax and receives income from a single house property must file ITR 1 or ITR 4. Consequently, by claiming earnings from home, a taxpayer may classify the house as ‘self-occupied or ‘let out for the financial year.

In the current ITR 1 and 4, a new alternative ‘deemed let out’ is provided under the classification of ‘kind of house.’ The three possible options for ‘kind of house’ are now available:

1. Self-Occupied
2. Let-out
3. Deemed let-out

For the case of a residential property that has not been reported as self-occupied by the taxpayer, the alternative of ‘deemed let out’ must permanently be opted.

The concerned taxpayer should use ITR 1 and 4 only and only for income from a single resident home. A taxpayer could choose the proclaimed let-out alternative in scarce circumstances.

For a House Property Loan, Submit An ITR-1

Particulars must be recorded in the personal information column to register ITR-1 with house property. In the revenue streams column, input the total taxable annual earnings. Track down the taxable profits in Form 16 and enter your company’s particulars, including the TDS figure.

• The first stage in reporting your ITR-1 for a home loan is submitting your identifying information in the first tab titled ‘Personal Data.’ This section allows the user to access your first, middle, and last names and your sex, residential address, and birthdate.
• After entering your individual identifying information, you will have to go to the following page, named ‘Income Sources.’ There are five other tabs under the main heading: Salary, Other Income, House Property, Capital Gain, and Business and Profession.
• Firstly, you must upload documents about your salary money by downloading your Form 16 or individually entering your taxable earnings and allowances.
• Following that, you must make a rough estimate of your sum considered for taxation in Form 16, after which you must enter the Salary TDS figure, including the particulars of your company. In case you switched jobs within a year and should include the payments from all employers in the section deemed relevant for this purpose.
• Having followed that, you will be required to enter details about your other revenues, such as gifts, fixed deposits, bank balances, and so on, before specifying any excluding earnings, such as interest from PPF schemes, ULIPs, mutual funds, agricultural income, so on and so forth.
• If you’ve had a home mortgage on a house that you inhabit, the concerned taxpayer must report the interest on the mortgage. The value of the property address, and also any co-owners, should have been included.
• To follow that, you must declare the entire tax deductions you are entitled to under Section 80C, including mutual funds, LICs, and the like. The taxpayer also must mention any other appropriate assumptions under the ‘More Deductions’ heading. Be absolutely sure that you enter all deductions correctly, as discrepancies will lead to complications later on without any room for any doubt.
• Once you’ve finished the preceding steps, submit the form and save the pdf and acknowledgement for reference in the future.

Section 80EE

Section 80EE of the relevant Income Tax Act helps first-time mortgage holders to exclude loan interest charges.

Even though the IT department initially implemented this deduction only for the budget year 2013-14, it has again been prefaced with effect from the financial year 2016-17 onward.

Individuals that are first-time homeowners are the only ones that may invoke the exemption under Section 80EE. If a HUF, business, or partnership firm takes out a loan to purchase a property, they cannot request a deduction. The taxpayer must have noted that One can only obtain 80EE deductions on the interest element of a home loan, not the principal sum repayment.

Important Note

• Section 80EE applies on a per-person basis rather than a per-property basis.
• Property acquired in a joint venture would also be liable for deductions of up to Rs.1 lakh per shareholder.
• You are not compelled to reside in the acquired estate.
• Borrowers who live in a rental apartment will exclude expenses for taxation under Sections 80EE, 80C, and 24.
• Taxpayers can essentially seek 80EE deductions in addition to the Rs.1.5 lakh exemption as applicable for self-owned assets.
• This clause allows you to demand a maximum deduction of Rs.50,000.
• A mortgage finance corporation or a financial institution should approve the loan.
• You should not own any land in your name on the same day the loan is authorized.

Section 80EE-Applicable ITR Form

If most of the provisions mentioned above are met, the taxpayer may request exemptions under Section 80EE while submitting his or her ITR. Individual people and HUFs will say 80EE on all ITR levels, including ITR 1, ITR 2, ITR 3, and ITR 4, focusing on their revenue sources.

If the tax audit is not appropriate, the threshold for filing ITR is July 31st of the following monetary year.

Aside from the primary and standard documentation such as Form 16, PAN, and so on, the only required paperwork to demand this deduction is the document endorsing and verifying the Interest on Housing Loan for First House.

Claiming Exemptions Under Sections 80EE and 80GG at the Same Time

This will be possible only if the assessee:

1. lives in rented housing and pays the rent for that.
2. He enjoys no House Rent Allowance (HRA).
3. He sought a loan to buy his first residential home.
4. The applicant should not live in an estate. To calculate income from house land, a residence project can be considered as let out.

Filing Individual ITR Form: This article will provide details for an individual to fill fields A1-A22 in Income Tax Return Form (ITR) form, which constitutes personal information for the financial year 2012-13. It’s immaterial whether one wants to file returns physically or electronically file the information that necessitates being filled remain the same.

ITR Form

For Income Tax e-filing returns for different types of tax-payers and the nature of income, different forms are prescribed. From the Income-tax website, forms for the financial year 2012-13 can be downloaded.

Every field in the New Return Forms For The Assessment Year 2012-13 form has a tag; for example, Tag for FIRST NAME is A1, PINCODE falls under A13. These tags are often referred to help to find the appropriate field fast.

Personal Information Comes Under A1 to A16

From A1 to A16, the information asked to be filled are personal information such as First Name, Date of Birth, Email Address which are self-explanatory fields except for the A7 Income Tax Ward or Circle.

The section A-1 to A-6 requires details like the First Name, Middle Name, Last Name, Date of Birth that need to be filled as per the PAN Card. A date has to be filled in the format of DD/MM/YYYY. So, for an individual born on June 10 1984, the Date of birth will be 10/06/1984.

In the address field, it is mandatory to fill Pincode. Residential Phone number in STD Code (first five digits) format, Email Address, Phone number ( 8 digits), and for faster communication from/with the Income Tax Department Mobile number.

A7 Income Tax Ward or Circle

One can know all about the Jurisdictional AO by visiting the incometaxindiaefiling.gov.in and enter their PAN number. Details such As Taxpayer Name, Area Code, etc., will be shown under this section (Name and PAN number has been masked in the example below, but one would see it for PAN number entered). One has to enter the value of the Jurisdiction field.

While filing the tax return, e-filing software does not force a person to enter the Jurisdiction field. The ward number indicates which officer will process their claim for a refund and assess the individual’s income.

Shade Properly

Fields A17-A20 need to be shaded.

The precise way to do this is to fill the circle.

A17 or Employer Category

In the case of an individual, for the “employer category”,

1. State Governments employees/Central Government is included under the government category.
2.  Public sector companies of State Government and Central Government are included under the PSU category.
3. All others who are not State Governments/Central Government employee or work for public sector companies of State Government and Central Government are included under others category.
4. Nature of tax returns or A18: The category is primarily based on total payable tax and total prepaid tax and interest. These are in Part D of the ITR Form: TAX STATUS and TAX COMPUTATION. For ITR 1, D12: Total prepaid taxes are the fields and D8: total tax and interest to be considered as:
5. If total interest and tax < total prepaid tax, then fill tax refundable
6. If the total tax payable > total prepaid tax, then fill tax payable.
7. If the total tax payable = total prepaid tax, then fill nil tax balance.

Note: Our recommendation is: Unless one has paid more tax and are asking for a refund, you should pay your tax liability and file under “nil tax balance” at least when you are filing for the first time before the due date 31-Jul-2012 under section 139(1).

Residential Status Under A19

There are three classes of Residency defined under the Income Tax Act: Resident, NRI or Non-resident Indian, Resident but not ordinarily resident. To determine which category one falls into for Assessment Year 2012-13, apply the following tests to the number of days the individual was in India in the Financial Year from April 1, 2011, to March 31, 2012.

Resident: A Resident is one who comes into either of these two divisions:

• Living in India for 182 days in the year or more, OR
• The person was in India for 365 days or more in the preceding four years and is in India for a total of 60 days or more in the current tax year.

This two condition applies to citizens of any nationality. However, the period of 60 days mentioned in the second clause above will be extended to 182 days for those who fall into either of these two categories:

• an Indian citizen who for employment outside India left India in any year, or
• an Indian citizen or a foreign citizen of Indian origin (NRI), who lives outside India, comes on a visit to India.

Non-Resident: A tax assessee is non-resident if the individual is not a Resident as per the section above.

Resident but Not an Ordinarily Resident: A Resident is considered “not Ordinarily Resident” if the individual fulfils one of these two conditions:

• During the 7 preceding years, the person has been in India for a total of 729 days or less, OR
• The person has been a Non-Resident in India for 4 out of 5 preceding years.

Nature of Filing Returns Under A20-A22

• The individual needs to shade the box “Before due date-139(1)” if the person is filing returns before the deadline, July 31, 2012.
• An individual needs to fill in “After due date:139(4)”, but if you are late.
• However, if the person is filing their returns for the same year for the second time, then they need to choose “Revised return-139(5)”. Typically, a person can file a return a second time when they commit a mistake or miss some information while filing their original returns. The box underneath will also need to state the receipt number and the filed date of their original return.
• Additionally, the income tax authority may also ask the individual to file their returns again under three sections for distinct. Section 142(1) is meant for non-submission of return, or late, section 148 is for reassessment, and section153A/153C is for requisition and search.

The rule for shading remains the same as explained earlier, so the relevant section only.

The other different sections of the Income Tax Act 1961, which covers the details about filing of income tax returns, come under Section 139(1), 139(5), 142(1), 153A/153C, etc.

What Is A Fixed Deposit?

A fixed deposit (FD) is a type of financial instrument provided by Non-Banking Financial Company (NBFC) or banks that provide the investors with a higher rate of return than an ordinary savings account. It matures after a fixed date. A separate account may not be required for creating a fixed deposit.

The tenure of fixed deposits can vary from 7 days to 1.5 years and can be a maximum of 10 years. There are additional offers that some banks offer, like loans against fixed deposit certificates.

The investments made in fixed deposits are considered to be much safer than Post Office schemes as it is backed up by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Tax Advantages On Fixed Deposit

• Income from interest earned on the fixed deposit is taxable, and tax is charged from the depositor according to his/her income tax slab. If a person earns income above ₹10 lakhs, then a tax liability of 30% will be charged (Education cess and surcharge will be charged extra) while people below exemption will not pay any tax.
• TDS at the rate of 20% is deducted if PAN is not submitted.
• If a person earns a total interest of more than ₹5,000 in a financial year from all of his/her fixed deposit held in a branch, that person becomes liable for TDS filing.
• Interest earned from fixed deposits comes under the head of Income from Other Sources. There are heads of income such as Income From Salary, Income from Business and Profession, Income from House Property, and Income from Capital Gain.
• Under Section 80TTBof the Income Tax Act, senior citizens earning interest from fixed deposits qualify for a deduction of up to ₹50,000 in a financial year. This particular section is made available to senior citizens from April 1, 2018. The benefits of section 80TTA that allows a deduction of up to ₹10,000 from interest earned from a savings account is not available to senior citizens.
• Interest earned or accrued on fixed deposits at the end of the financial year qualifies for TDS deduction. Suppose an individual opts for a cumulative option in a fixed deposit that pays interest at the maturity date, and the individual falls under any of the tax slabs. In that case, TDS will be deducted because the interest is accrued on such fixed deposits.
• In Form 16A, a TDS Certificate is issued in April following the financial year for TDS deducted in the previous financial year.
• Form 26AS, linked with an individual’s PAN number, should show TDS deducted in a financial year. Details in Form 26AS should match the details in Form 16A provided by the bank to the individual.
• The tax liability on interest earned from the fixed deposit is calculated in the first or primary applicant’s name. The second or joint holder is not liable for any tax liability.
• Fixed deposits held by minors, as the first account holder, is also liable for TDS deduction. In such cases, the interest income earned by the minor will be clubbedwith the income of the person with whom the minor’s income is included.
• If the housewife or non-working wife holds the fixed depositas the first or primary account holder from her husband’s money, then income from interest will be merged with that of the husband’s income.
• If the parents hold the fixed deposit as first account holderfrom the money provided by his/her adult children, then income from interest will come under the parent’s income. But if the adult child holds the fixed deposit, then the income from interest will come under the income head of the adult child and not of the parents.
• If an individual acknowledges that his/her total income from interest will not come under the overall taxable limits for the financial year, then he/she should notify the Bank not to deduct TDS on interest on deposits by filing Form 15G or 15H. Sometimes the bank charges TDS despite filing Form 15G or 15H, and therefore the Government has mandated the banks to provide acknowledgment for submission of Forms 15G or 15H.

Declaration Of Interest From Fixed Deposit In Income Tax Return

Interest income from fixed deposits should be disclosed every year. It should be shown on the accrual basis, i.e., interest earned but not yet received (also known as the mercantile basis of accounting).

Form 26AS shows the TDS amount and whether TDS is deducted or not. The TDS is used by the Income Tax Department to verify an individual’s income tax return.

Information To Be Declared for Income From Fixed Deposit In Income Tax Return

Interest earned from fixed deposit should be shown under the head of Interest portion of Income from other sources. For example, if an individual has earned an income of ₹20,000 (without TDS deduction) and TDS to be deducted is ₹2,000 (10% of ₹20,000), then ₹20,000 should be declared under Income from Other Sources, and ₹2,000 should be claimed in TDS.

If deducted on the income from interest, TDS should be claimed by the individual in the Income Tax return and should be shown in the TDS section. The filing information is shown below:

• Unique TDS Certificate Number: A certificate number is a six-digit number that appears on the top right-hand corner of the TDS certificates that the individual generates through the Tax Information Network (TIN) Central System.
• Total Tax deducted: The tax deduction details are to be entered from Form 16A, and the amount of tax should be rounded off to the nearest rupee.
• Deducted Year: The financial year should be mentioned in this column.
• Amount claimed for this year. Generally, this amount will be the same as the amount of tax deducted. This amount cannot exceed the amount of tax deducted, and the amount should be rounded off to the nearest rupee. Details of tax deducted are shown in Form 26AS.

Steps To Calculate Tax Liability For Interest On Fixed Deposit In Income Tax Return

Income from interest earned on fixed deposits is liable to tax in the hands of the investor/depositor as per the income tax slab of the person. If the person earns above ₹10 lakhs, he/she is liable for a 30% tax liability (Education cess and surcharge are to be charged extra). When TDS is deducted, and the person falls under the 30% tax slab category, then he/she needs to pay the remaining 20% tax.

Suppose the person has earned an income of ₹20,000 (without TDS deduction) and TDS to be deducted is ₹2,000 (10% of ₹20,000) then ₹20,000 should be declared under the head of Income from Other Sources and ₹2,000 should be claimed under TDS.

After all the other tax details are entered, the total tax liability is calculated.

For example, in ITR1 Excel, go to the tab Income Details and click on Calculate Tax option to calculate the total tax that the person is liable to pay for the earned income and the deductions that have been declared.

If the person has paid less tax, it will show the difference of tax amount in the ‘Balance Tax Payable’ row of the Income Tax Details.

In the Excel ITR Forms, the white cells with blue labels represent auto calculating fields and are not be filled by the person. The information on those cells is calculated automatically based on information provided in other cells.

If the person has paid more tax amount, then the excess tax paid will be shown in the tax refund row 18 of ‘Taxes Paid and Verification.’

If the amount tax is payable and not paid, then Pay Self-Assessment tax using Challan 280.

What To Do In Case Of Income Tax Refund?

In many cases, TDS was deducted by banks even though there was prior notification provided by filing Form 15G or Form 15H. Many a time, TDS gets deducted even though income is below the taxable limit. In such cases, the excess tax would be refunded to the individual. The individual can claim a tax refund in the following ways:

• Normally fill an income tax return form.
• Show that TDS was deducted in the TDS section.
• Mention interest earned from the fixed deposit of the following financial year as Interest Income under the head of Income from Other Sources.
• While calculating the total tax due, the excess amount will be shown in the ‘Tax refund’ row 18. Check the amount that is going to get refunded.

What To Do In Case Of TDS Mismatch?

Sometimes TDS won’t be reflected in Form 26AS, and in such cases, the individual should contact the bank from where Form 16A was issued. The individual needs to contact the bank and get the information updated in Form 26AS.

In the above-mentioned case, if the individual files a claim for TDS and the following information is absent in Form 26AS, there will be a mismatch in information, and a notice will be served to the individual from the Income Tax Department.

How to e-file Form 15G & Form 15H on Income Tax: For senior citizens and other individuals who have annual income less than the basic exemption limit or for people who only have an interest income to depend on can face some troubles with TDS or Tax Deducted at Source. During the interim budget in 2019, the basic exemption limit on interest income limit was from Rs. 10,000 to Rs. 40,000. Banks deduct the tax at their source under the provision whenever the bank pays the interest to their customers. Even if your total interest income is below the exemption limit, the bank authorities would not know about that.

The government has hence created Form 15G and Form 15H to address this problem. You can ask the bank not to reduce the TDS on your interest income, which is valid for senior citizens.

People who earn below the exemption limit can submit the form 15G and form 15H at the beginning of every financial year to notify the bank or the people responsible for paying the income and deducting the tax at source during the year. If you submit these two forms, i.e., 15G and 15H, they will not deduct your TDS.

What is Form 15G?

What is Form 15H?

Difference Between Form 15G and Form 15H

What are the Eligibility Criteria for Form 15G and Form 15H?

When can one submit Form 15G or 15H?

What Happens if one Forgets to Submit Form 15G and 15H?

How to Get a Refund on TDS?

What is Form 15G?

Form 15G applies to the people and HUF below the age of 60 and whose interest revenue is below the basic exemption limit and who don’t have any other tax liability on their annual income. The forms are a form of declaration that states that a person is not liable to pay any form of income tax and TDS according to the Income Tax Act of 1961.

What is Form 15H?

Like Form 15G, Form 15H is also a self-declaration form that applies to a senior citizen or for someone above the age of 60 years. Hence, form 15G is for people below the age of 60 years and form 15H is for people above 60 years. They can file it to request the income tax department not to charge any TDS or request a rebate for the interest income from investments (for example, fixed deposits) if their net yearly income is below the basic exemption limit.

Difference Between Form 15G and Form 15H

A few specific differences exist between Form 15G and Form 15H based on the eligibility criteria, age, limit, etc. They are as follows.

1. People below 60 years can submit form 15G, and senior citizens or people above 60 years can submit this form.
2. People who are HUF or belong to Hindu undivided families can also submit form 15G. Other taxpayers cannot submit form 15H such as HUF, firms, Pvt, Public companies, AOP, etc. Only senior citizens can submit form 15H.
3. People with zero tax liability or annual income less than the basic exemption limit can file 15G. Hence, HUF individuals can also file it. On the other hand, senior citizens who have their interest income exceeding the basic exemption limit can file Form 15H if their annual income is lower than the basic annual income.

What are the Eligibility Criteria for Form 15G and Form 15H?

Form 15G

An Indian resident or HUF with a total annual income below Rs. 2.5 lakh is eligible to submit Form 15G if they are below 60 years. The basic exemption limit is below Rs. 40,000. If these criteria are not met even by the slightest, then they can’t request the non-deduction of TDS. The requirements for Form 15G are as follows.

1. People below 60 years are applicable to submit this form.
2. If an applicant belongs to a HUF but not to any company or organization, can submit Form 15G.
3. The applicant should be an Indian resident.
4. If the applicant has a fixed deposit or a recurring deposit, the interest income generated from it must be below the basic taxable amount, i.e., Rs. 40,000.
5. The applicant’s total annual taxable income should be below the basic exemption limit.

Form 15H

An applicant between 60 to 80 years is eligible to apply for this form if they have an annual income less than Rs. 3.5 lakhs. Senior citizens above 80 years old can also apply for this form if they have an annual income below Rs. 5 Lakh. If the fundamental annual limits exceed, they cannot request not to deduct their TDS. But, if senior citizens have an interest income above Rs. 40,000, then they can submit form 15H. The criteria for Form 15H are as follows.

1. The applicant has to be a senior citizen, i.e., 60 years of age or above.
2. They should be an Indian resident.
3. Any entity other than a senior citizen such as a HUF, firm, organization, or a person below 60 years cannot fill this form.
4. The person’s total annual income should be less than the basic exemption limit.

When can one submit Form 15G or 15H?

Taxpayers can submit Form 15G or 15H at the beginning of the financial year to their banks or any other financial institutions. After they submit the form, the authorities will check them and ensure that no tax deductions occur at the source when they receive the interest for their investments.

What Happens if one Forgets to Submit Form 15G and 15H?

It can so happen that a taxpayer has forgotten to submit their forms on time. In such a case, the banks and financial institutions can deduct the tax on their interest on investments. If it happens, they can ask for a refund at the source, from the Income Tax Department directly.

How to Get a Refund on TDS?

If you want to get a rebate on the TDS, you can file your income tax return form. You cannot submit Form 15G and 15H after their due dates to banks or other financial institutions since they don’t have the authority to refund your TDS.

Financial institutions and banks can also deduct the quarterly TDS instead of the annual one. In such a case, you can submit Form 15G and 15H later so that they don’t remove the TDS for the next quarter. You can claim your refund at the end of the financial year by filing for the Income Tax Return.