Income Tax

Understanding Form 16 – Tax on Income: Form 16 is like a certificate that is issued by the employer, and this Form contains all the information that one needs for preparing and filing his/her tax return. Employers must issue this Form every year on or before 15th June of the next year, which is immediately after the financial year in which the tax got deducted. Form 16 has two distinct parts which are Part A and Part B. In case a person loses his/her form 16, then he/she can apply for a duplicate one from his/her employer. Form 16 is meant for dealing with the tax on taxable salary and tax deducted at source.

Understanding Form 16 – Tax on Income Overview

Form 16 contains information that is related to the employer and employee. Information such as name and address of the employer, PAN/TAN of the deductor, name and designation of the employee and PAN information of the employee. People have to disclose their assessment year, period of employment, address of CIT (TDS) and a summary of tax deducted at source in a detailed manner in Form 16. The summary includes quarter-wise information of receipt numbers of quarterly TDS returns in Form No 24Q, amount of tax deducted, and amount of tax deposited or remitted.

Form 16 is meant to show the employee’s gross salary along with the perquisites and profit instead of salary. In the section ‘Income under Head Salaries’, the employee can report his/her income from other sources. Under section 192(2B) and Rule 26B of the Income Tax Act, when an employee is having any other income despite his/her salary (not being a loss) in the same financial year, which is chargeable under any head such as income from capital gain or income from other sources, the employee must give a statement of such income and any tax deducted thereon to the employer so that he/she can take it into consideration while deducting tax from the employee’s salary.

When other incomes are added to the income under head salaries, one can get the gross salary of the employee. Gross salary is the total salary an employee gets after adding all the allowances and benefits but before charging the taxes. This is explained in detail in form 16 – part 1.

Calculating Tax

After calculating the employee’s taxable income, the ones whose income exceeds the amount that is exempted under Income Tax Act is known as assessee. On the income of the assessee, tax is charged at a rate fixed under the finance act for the relevant assessment year. Income tax also depends on the type of assessee. There are different types of assessee such as Individual, Hindu Undivided Family (HUF), Firm, Trust etc. In the case of an individual, the tax calculation depends on:

• Gender
• Age
• Residential status

For the income that is earned between 1st April 2011 and 31st March 2012, the financial year is considered as 2011-2012, and the assessment year is considered as 2012-2013.

For a resident Indian for the assessment year 2012-2013, the income tax slab is as follows:

Tax	Men	Women	Senior Citizen (60 years – 80 years)	Very Senior Citizens (More than 80 years)
Basic Exemption	180000	190000	250000	500000
10% tax	180000 – 500000	190001 – 500000	250001 – 500000
20% tax	500001 – 800000	500001 – 800000	500001 – 800000	500001 – 800000
30% tax	Above 800000	Above 800000	Above 800000	Above 800000
Surcharge	No surcharge is charged in the case of an individual, Hindu undivided family, Association of persons and body of individuals
Education Cess	3% on the income tax

Tax Computation for Males

Tax computation for males in India is as follows:-

Level of Income	Tax
When the total income of the employee does not exceed Rs 1,80,000	Nil
When the total income of the employee exceeds Rs 1,80,000 but does not exceed Rs 5,00,000	10 percent of the amount that exceeds the income  Rs. 1,80,000/-
When the total income of the employee exceeds Rs 5,00,000  but does not exceed Rs 8,00,000	Rs. 32,000/- plus 20 percent of the amount that exceeds the income  Rs. 5,00,000
When the total income of the employee exceeds Rs 8,00,000	Rs. 92,000/- plus 30 percent of the amount that exceeds the income  Rs. 8,00,000

After the tax is calculated, surcharge and education cess is added to it. Let’s discuss these terms in brief:

Surcharge

The surcharge is meant to be an additional charge or payment that is charged on the taxable income of an employee. It acts like an extra fee that is added to another fee or charge. For example:

• The fuel surcharge is meant for representing additions due to jet fuel prices.
• Sea freight charges are meant for representing additions due to oil prices.
• The surcharge is charged when payments are made through cheque, credit or debit card.

Education Cess

It is considered to be a contribution that is made towards the Secondary and Higher Education development in the country’s economy. All taxes that are levied in India are subject to an education cess, which is fixed at 3% of the total tax payable. Please note the 3% is not charged on the income tax but on the income tax payable.

Annexure A or Annexure B

An employee also gets Annexure A or Annexure B along with Form 16 depending on the type of the employer; they are also called the Deductor type because they are the ones who deduct tax from the salary of the employee. Annexure is something which informs about the details of the tax deducted and deposited in the Central Bank account with the help of a challan.

• Annexure A is used if the employer or deductor type is Government.
• Annexure B is used if the employer or deductor type is others.

Relief Under Section 89

Relief under Section 89 under the Income Tax Act is considered to be one of the most important tax rebates that are offered to the employees by the Government. It deals with the taxation of the salary when the salary is believed to be paid in arrears or in advance. Government employees are the ones who get higher salaries because of these arrears.

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.

Understanding Form 16 Chapter VI-A Deductions: In the article Understanding Form 16 Chapter VI-A Deductions, we have presented the structure of salary paid and how the gross salary is calculated. In this part of the article, we have elucidated the first part of Form-16- Chapter VI A Deductions regarding deductions that fall under the Chapter VI-A of the Income-tax Act. It also presents how they appear in Form 16. Through this article, you will acquire more about the Income Tax Act of 1961 and chapter VI-A, various subsections.

Income Tax Act 1961 and Chapter VI-A

The Income Tax Act, 196, became effective on April 1, 1962, and this Act applies to the whole of India, including Jammu and Kashmir. The Income Tax Act is a comprehensive piece of legislation and comprises 23 Chapters, 298 Sections, 14 schedules, and various subsections about the subject.

Since 1962, The Act has been subjected to numerous amendments undertaken by the Finance Act each year. This change leads to coping with the changing scenario of the country and its growing economy.

In its Income Tax Act, 1961, the Government of India has presented a provision where individuals can save the income tax through investment in certain products inclusive of expenditures like an educational loan,  medical premiums, etc. This enactment encourages certain savings types, mostly long terms, expenses like education loans, medical premiums, and more.

The Tax deductions detailed in chapter VI-A of the Income Tax Act remain eminent from the exemptions provided in Section 10 of the Income Tax Act, 1961. The reductions that fall under the Section 10 of the Act are reduced from the overall gross income total. Chapter VI-A deductions do not lower as a part of the income. Chapter VI-A deductions are to encourage the long-term savings and specific expenditure undertaken by individuals.

Chapter VI-A of the Income Tax Act, 1961, deals with the deductions that are to be made in computing the total income acquired. The chapter specifies the sections starting from 80A to 80U under which the required reductions are allowed. These deductions are made from the assessee’s gross total income. Multiple segments apply to different kinds of assesses, and if you look at ITR -1 or Sahaj form, you will see thirteen deductions, while the ITR-2 form encompasses fourteen abatements.

Income Tax Act Deductions in Detail

A few sections tabulated below talks about the Income Tax Act Deductions in Detail:

Code	Maximum Limit	Schemes
80C	1.5 lakh	Principal repayment of housing loans Public Provident Fund provides 8.6 percent return compounded annually, life insurance premium payments, and investment in pension plans. Equity Linked Savings schemes of mutual funds Post office investments National Savings Certificates Tuition fees for up to two children Tax saving Fixed Deposits provided by banks. This is for a tenure of five years and with an interest that is also taxable. The Finance Act, 2005, introduced the 80C section of the Act.
80CCC	1.5 lakh	The premium for annuity plan of LIC payment or any other insurer. The Finance Act, 2006, has also enhanced the deduction limitation under Section 80CCC of the Act from Rs.10,000 to Rs.1,00,000.
80CCD	10% of his salary.	Deposit that is made by an employee in his or her respective pension account
80CCF	Rs. 20,000.	Long-term subscription to infrastructure bonds for the financial year 2010 to 2011 and 2011 to 2012. However, this exemption does no longer falls under the financial year 2012 to 2013.
80D	Rs 35,000.00 classified as follows-15,000.00 inclusive of premium payments towards policies for spouse, self, and children. 15,000 is divided for non-senior citizen dependent parents. 20,000.00 towards senior citizen dependent	Premium in health insurance to the individual, spouse, children or dependent parents
80G	A 100 percent donation amount for special funds About 50 percent of the donation amount comes inclusive of all other donations.	Donation to specific funds, charitable institutions etc

Deductions that are Based on Declarations Given by the Employee

The deductions that fall under Form 16 are based on the employee declaration submitted to the Finance department of the employee’s organisation. Employees are allowed to make the statement twice at the beginning of the financial year and the end of the year, usually in February.

Declarations made at the beginning of the Financial year:

The declaration is made at the beginning of the financial year, where the salaried need to fill up the respective declaration form and present them to their respective companies. The declaration form for the first financial year submits the print of all the necessary investments. It proposes all the undertakings a salaried person should take during that period.

Based on this statement, the company calculates the tax liability for the first term of the financial year and deducts the appropriate amount every month from the employee’s salary. You must note that the Provident Fund remains a part of deductions available under Section 80C of the Income Tax Act, 1972. Supposedly, a person’s Provident Fund contribution each year amounts to Rs 30,000. The employee will only need to make other investments worth Rs 70,000 only to exhaust the 80C section of the Act available.

Declaration made at the end of the Financial year:

The declaration that is made towards the end of the financial year, usually in February, is undertaken by the company’s finance department. The department sends an Actual Investment Declaration Form to all its employees to fill in the actual investment details and supportive documents for their investments.

Any difference between the declarations made at the beginning of the year and the end of the year will be calculated by the Finance department, where the employee’s tax liability is based on the “Actual investment Declaration form”. Upon this, the employee’s tax is deducted accordingly.

The employees are asked to submit the actual declarations at the beginning of February and not in March. This provides enough time for the employees to make investments if not made and for the company to make calculations and adjust tax liability. Companies tend to deduct more tax from the employee’s salary in both February and March.

An employee may or may not have reported all deductions to the employer, which creates no problem as they can still claim them while filing for the Income Tax Return(ITR). In general, it remains a reasonable idea to report tax deductions to the employer such that the TDS remains minimised.

It is to be noted that irrespective of the investments made for an amount that falls to be greater than the maximum allowable limit, only a maximum limit is deducted.

Upon the deductions allowed under Chapter VI-A from Gross Salary, the taxable salary arrives on which the tax is calculated.

Changing Jobs and Tax, Form 12B: Nowadays, people seem to change their jobs frequently for jobs which pay better than the previous one. In the past, our parents used to do one job till their retirement and never think of switching companies, but things are different now. Changing jobs gives rise to a situation where the one changing the job gets tax exemption twice from the old employer as well as the new employer. Exemptions and tax liability form is considered to be an important consideration which is required during switching of jobs. When a person decides to switch jobs in the middle of the year, he/she must make sure that the deductions and exemptions regarding the tax liability are made only once. In this article, we will try to explain certain aspects related to changing jobs, and we will also make a detailed overview of the tax exemption rules when a person changes his/her job.

Calculation of Tax Liability by Both the Employers on Switching Job

Most employers seem to evaluate their employee’s tax liability after taking into consideration the basic exemption limit and also the exemption that is availed under section 80 c of the Income Tax Act. The basic exemption limit is considered to be an amount up to which an individual is not liable to pay any tax for a single financial year. For example, in the financial year, 2013-2014 or assessment year 2014-3015, the basic exemption limit for employees who are in their 60s was Rs 2 lakh. This exemption process gets executed smoothly when there is one employer, but when a person decides to switch jobs, there might be some chances of the employee to get tax exemptions twice from the old employer as well as the new employer in a financial year.

To give a person a more detailed idea of the above explanation, let’s discuss an example that will make things more clear:

Let’s say Anshuman is a working employee in a particular company whose annual income is around 6 lakhs. He informed his company that he is planning to invest Rs 50000 in order to save taxes. But he worked till October 2013. So, in this case, his first employer will evaluate the tax liability of Anshuman by deducting the basic exemption limit as directed by the government and Anshuman’s tax savings from his taxable income.

Particulars	Amount (Rs)
Income acquired from the job in a year	6,00,000
Fewer Investments done by the employee under section 80 c	50,000
Taxable income	5,50,000
Less Tax-free exemption	2,00,000
Income on which the tax is calculated	3,50,000
Tax for the financial year	41,200
Monthly tax	3433.33 (41,200 / 12)
TDS paid by the company (Till October)	21,200 (41,200 / 12 * 6)

Anshuman decides to change his job after six months for a better annual package of Rs 8 Lakh. Here, the tax is calculated by the second employer for a period of six months on an annual salary of Rs 8 Lakh. He seems to include the income that he has acquired from the first year. He again plans to take care of investments under section 80c and basic exemptions.

Particulars	Amount (Rs)
Income from the second job ( for six months )	4,00,000 (8,00,000 / 2)
Less Investments made under section 80c	50,000
Taxable income	3,50,000
Less Income which can be exempted	2,00,000
Income on which tax is calculated	1,50,000
Tax for the whole year	15,000
Monthly tax	1,250 (15,000 / 12)
TDS paid by the second company (From Nov)	7,500 (15,000 / 12 * 6)

So Ansuman has paid total of Rs 28,600 (21,100 + 7500) as tax on his income of Rs 7 Lakh (3 Lakh + 4 Lakh)

The correct way for calculating the tax liability of an employee who decides to switch jobs is as follows; this method uses the basic exemption only once in the whole process.

Particulars	Amount (Rs)
Income received from the first job	3,00,000
Income received from the second job	4,00,000
Investments under section 80c	50,000
Tax-free exemption	2,00,000
Taxable income	6,50,000
Tax liability	60,000
Total (before charging cess or surcharge)	10,000

• So instead of paying Rs 60,000 as TDS on Anshuman’s salary, only Rs 28,600 was paid.
• The other thing that motivated Anshuman to switch his job was the tax home pay shot up, but it seems to be short-lived happiness. In the month of May, his salary for April was less than what he received for March. Because in May his salary was calculated on the income he has received on the whole year hence TDS on the income increases, therefore his take home decreases.
• When Anshuman files his income tax return for the financial year 2013-2014, he is obliged to pay the TDS for the financial year and also the interest on the tax that was due from last year as he is liable to pay tax in advance.

Form 12B

When a person joins a company as a new employee, he/she is required to provide the particulars of his/her income from the job he was doing earlier by filing Form 12B. The Form 12B has the following details:

• Details of the previous employer such as the PAN number, TAN number and number of years the person switching jobs worked with him/her.
• Break up of the salary like Basic salary + DA + perquisites, House Rent Allowance, Leave Encashment, Leave Travel Allowance, etc. These are given in a detailed form for better understanding.
• Deductions that will be done on the salary for the purpose of provident fund and particulars for the value of perquisites such as rent-free accommodation.
• Deductions, if any, must be applied under section 80c, Section 80G, Section 80E, Section 80D, Section 24.
• TDS that was deducted from the salary by the previous employer.
• Professional Tax (If any) that is paid by the employer.

Understanding Income Tax: Tax is a form of financial charge or fee charged by the Government from its citizens for providing better public infrastructure and carry out public welfare services. Tax can be of two types, i.e., direct tax and indirect tax. Indirect tax is collected from the citizens on the consumption or usage of goods and services. At the same time, a direct tax is a tax collected directly from individuals or organizations based on their incomes.

Income tax is a form of direct tax levied by the government on the incomes of its citizens. Income tax forms a large part of the revenue for the Government. As the Income-tax is collected based upon the incomes of the individuals, so more the income more the tax.

For an Individual, filing an income tax return is no less than achieving a huge milestone. However, without proper knowledge and understanding of filing and computation of tax, it can become hectic for a first-timer. To help you understand the basics of income tax, its implications and computation, we present this article. In this article, we will discuss income tax, types of incomes, computation of tax, TDS, and other tax-related terms.

Basics of Income Tax

Income Tax, as we know, is a direct form of tax levied by the government on the income of its citizens. For an individual, it is mandatory to file a return on his/her income. The income on which income tax is computed is known as taxable income. Income as per the Income-tax act is segregated into five heads: salary income, income from house property, income from business and profession, Income from capital gains, and income from other sources. Similarly, the income tax act divides taxpayers into different categories: Individuals, Hindu Undivided Family, Association of Persons, Body of Individuals, Firms, and Companies.

Types Or Sources of Income

In the paragraph mentioned above, we learned that income is divided into five heads as per the Income Tax Act. Now, let’s discuss each head of income in detail:

• Salaried Income: According to the Income Tax Act, an income can be considered salary only if an employer and employee relationship exist between the payer and the payee. The Income-tax act defined salary as a form of monetary compensation, which can be in the form of wage, gratuity, allowances, commission, or leaves encashment. An income can only be considered under the head salary if the money received by the taxpayer is a result of an employment agreement.
• Income From House Property: It is another head of income under the income tax act. Under this head of income, any commercial or residential property held by the taxpayer is taxed. Income received from the property will be considered a source of income and taxed under the act. According to income under house property, even if your property is not let out, it is considered to be generating rent and is taxed.
• Income From Business and Profession: According to the income tax act, any income from a business or profession is considered under the head Income from Business and Profession. According to the tax laws, any proceeds of the business or profession shall be taxed accordingly. Taxable income under the head income from business and profession is calculated by subtracting the expenses of the business or profession from its income.
• Income From Capital Gains: It is the fourth head of Income under the Income-tax act. Here, the income received from the sale of capital assets, either movable or immovable, is deemed to be taxed. The capital gains can be from selling stocks, bonds, gold, land and property, or any other asset. The Income from capital gains is divided into two heads depending on the time period of the asset: Long term capital gains and short-term capital gains.
• Income From Other Sources: It is the fifth and last head of income under the tax law. Under this head, the income derived from any other sources other than the four sources mentioned above are considered for tax purpose. Some incomes considered under Income from other sources are income from lottery, interest from bank deposits, senior citizens saving schemes, etc.

Income Tax Slabs

According to the Income Tax Act, there are different tax slabs under which the amount of income tax is computed of a taxpayer. The following table describes the tax slabs for individuals below the age of 60:

Income Tax Slab	Income Tax Slab Rates
When Income is less than 2.5 lakhs	NIL
When Income is more than 2.5 lakhs but less than 3.00 lakhs	5% of the Income
When Income is more than 3.00 lakhs but less than 5.00 lakhs	5% of the Income
When Income is more than 5.00 lakhs but less than 7.5 lakhs	10% of the Income
When Income is more than 7.5 lakhs but less than 10.00 lakhs	15% of the income
When Income is more than 10.00 lakhs but less than 12.50 lakhs	20% of the income
When Income is more than 12.50 lakhs but less than 15.00 Lakhs	25% of the Income
When Income exceeds 15.00 Lakhs	30% of the Income

Important Dates for Taxpayers

In the above paragraphs, we learned about some of the basics of Income-tax. Now, the essential information for a taxpayer is the dates of filing income tax. Every taxpayer needs to be aware of the dates to avoid any future disputes and also late fees. But, before knowing the dates, one needs to know the periods of income tax return filing. So, there the two periods. One is termed as the previous year, and the other is termed as the Assessment Year. Let’s discuss both in details:

• Previous Year: In terms of tax calculation or computation, the Previous Year is the year in which an individual derives the income to be computed. It is also known as the financial year or tax year. It basically a 12 month period which starts from 1st April and ends on 31st March of the following year. A financial year or previous year is always mentioned by combining two subsequent years, such as 2020-21. Here, the year starts from 1st April 2020 and ends on 31st March 2021.
• Assessment Year: It is one of the most important terms related to tax computation. Assessment year is the year in which the income of an individual is assessed, or in simple words, it is the year in which an individual pays income tax on the income he derived in the previous year. The assessment year is the year that is immediately after the financial year. For example, for the financial year 2020-21, the assessment year will be 2021-22.

The taxpayer should keep in mind that the last date of filing an ITR is 31st July of the ongoing assessment year. It should be noted that the last date of filing ITR is 30th September for taxpayers whose return statement are subject to audit. One should also keep in mind that the last filing date may be changed as per the situation prevailing in the country.

Tax Deducted At Source And Form 26AS

TDS is the abbreviated form of Tax Deducted At Source. In simple words, TDS is the tax deducted by the person making the payment. TDS is generally related to salaried income. The employer deducts a certain amount of money from the salary of the employee. The percentage of the amount to be deducted as TDS is prescribed by the Income-tax department.

In some cases where a person earns interest on bank deposits, the bank also deducts TDS. But in the case of a bank, the TDS percentage is 10% of the interest. Here are some of the key points relating to TDS:

• TDS is deducted by employers on salary payments and by banks on interest payments. A person may also deduct TDS when he/she buys property or pays rents exceeding ₹50,000.
• A person can file a self-declaration in form 15H or 15G to avoid TDS if his total income does not exceed the taxable income.
• After deducting TDS, the employer or the bank issues form 16 or 16 A, which acts as proof of such deduction.
• TDS is also updated in form 26AS, and one can claim TDS while filing the return.

Form 16

In the earlier paragraphs, we discussed TDS. Now let’s discuss form 16, an essential part of TDS. Form 16 is an essential certificate issued to an employee by his/her employer as proof of the Tax deducted at the source. Form 16 demonstrates the salary paid to the employee and the Tax amount deducted by the employer. It acts as evidence that the tax amount has been deposited with the government on behalf of the employee.

Form 16 has two parts, 16 A and 16 B, the 16 A of the form provides details of the quarterly TDS deducted and deposited by the employer. It also displays the PAN number, TAN number and other information of the employer.

In contrast, 16 B of form 16 is to be prepared by the employer for each employee. 16 B describes the proper break up of salary paid to the employee and the deductions under chapter VI A.

Details Required for Filing Form 16

following are the details that are required for filing form 16:

• Allowances paid to the employee that is exempted under section 10.
• Break up of salary paid to the employee under section 16.
• The taxable salary.
• Income from house property reported by the employee for TDS.
• Income under the head other sources reported by the employee.
• Break up of deductions under section 80C.
• The aggregate of deductions under section 80C.
• Net tax payable or tax refund.

How to Pay Property Tax in Bangalore?: Property tax, often known as home tax, is a local tax paid by municipal governments to fund the upkeep of essential civic services in your community. The city has been divided into A, B, C, D, E, and F zones for 2016-17. Bangalore property taxes are due on April 1, 2021, and must be paid by April 30, 2021. If you pay before April 30, 2021, you will receive a 5% discount. This article summarizes Bangalore’s property tax, as well as information on how to pay property tax in Bangalore online for the fiscal year 2021-22, and frequently asked questions about Bangalore’s property tax.

If you pay your whole property tax bill before May 30 each year, you are entitled to a 5% discount. If you choose to pay in two installments, you will not be charged interest on the first installment if paid by May 30 and the second installment if paid by November 30 of each year.

Check to see whether the system has updated your information and if there are any outstanding balances on your account. If there are any mistakes, have them fixed right away.

Calculation of tax: For the 2015-16 fiscal year, a property with a total built-up size of 4,680 sq ft paid property tax of Rs 76,047, which was increased to Rs 1,22,825 for 2016-17 fiscal year, a tremendous 61.51 percent increase. However, because of the 5% rebate and the BBMP’s decision to limit hikes to 20% and 25%, the property owner will only have to pay 95,059, saving him Rs 27,766.

How to Online Pay Property Tax?

The easiest way to pay your property tax is to do it online at the BBMP website, using a credit or debit card, or through internet banking. (https://bbmptax.karnataka.gov.in/)

• Your property information can be retrieved using your Base Application Number or Property Identifiers (PID). If you have already paid your property tax using your Sas Base Application or PID NUMBER, you might make a payment online for your property tax.
• A one-time password (OTP) is received. Fill in the blanks.
• Select ‘Retrieve’ from the drop-down menu. After you’ve done that, the property’s owner’s name appears on the screen.
• Select ‘Confirm’ from the drop-down menu.
• Check the information attentively before proceeding to the payment.
• Choose the method of payment that you want to use.
• Click ‘Downloads’ on the BBMP Property Tax portal. From the drop-down menu, choose your selection. This page allows you to print the receipt, Challan, or application. To access the document you wish to print or save, you must first input the assessment year and application ID.

What To Do If You Get Form V Instead of Form IV?

Is it possible that you’re getting the form V rather than the form iv? This is happening to a lot of folks. The suggested remedy is to go to Form 5, replace Form 5 with Form 4 in the displayed URL text, and then make the payment as described below.

Form V: All applications that generate Show Cause Notices, Demand Notices, or Demand Notices for Zonal Classification Mismatches are redirected to submit returns using Form-V for later payments for appropriate modifications.

1. Retrieve your account information from https://bbmptax.karnataka.gov.in/.
2. A one-time password (OTP) is received. fill it in
3. Form 5 is opened in the third step. Look for the word “5New” in the URL and replace it with “4NEW.”
4. Form 4 is displayed.
5. If you follow the steps in the correct order, it should work.

Property Tax in Bangalore

• The fiscal year 2021-22 begins on April 1, 2021, and ends on March 31, 2022.
• If you have already paid your property tax at least once, you can submit a payment using your SAS APPLICATION NUMBER or PID NUMBER for the year 2008-09 or later. Please be patient if you are paying your property tax for the first time. Ward numbers, street IDs, and new plot numbers allocated to various properties are contained in PIDs or Property Identification Numbers.
• Property taxes can be paid online or at specified bank branches, which can be found on the BBMP Tax website. If the structure of the property changes, the application must be updated with the required additions or deletions. You can generate a challan once all of the entries are complete. The Challan, along with the return, must be used for paying the property taxes at any Canara Bank branch around the jurisdictional area.
• At BBMP help centers and zonal offices, no payments will be accepted.
• Property tax can be paid in two installments: the first installment is interest-free if paid by May 30, 2021, and the second installment is interest-free if paid by November 29, 2021.
• If the total BBMP Property Taxes for the current year are paid before April 30, 2021, a 5% rebate is available.
• If the property tax (for the first half-year) is not paid before May 31, 2021, a monthly interest rate of 2% will be levied.
• Based on the Department of Stamps and Registration’s stated guide value, the BBMP’s jurisdiction has been divided into six value zones. The city has been divided into zones A, B, C, D, E, and F.
• If the previous year’s property tax return has not been filed, the current year’s property tax must be accompanied by the previous year’s return and dues, if applicable. If you’re paying for previous years (arrears payment), you’ll need to generate a challan for each preceding year first.
• If you default on a payment, the system calculates interest at a rate of 2% per month for the defaulted period automatically.
• If you pay by DD or CASH, you will receive a receipt immediately. However, a receipt can be generated for cheque payments only once the cheque amount has been realized.

Calculation of Property Tax in Bangalore

The Unit Area Value technique is used to compute property tax in Bangalore. The Annual Rateable Value (ARV) system was replaced by the Unit Area Value (UAV) scheme.

Unlike the ARV, based on the property’s expected rent, the Unit Area Value is based on the property’s projected returns, which vary depending on its location and use. This technique of property assessment is known as the “Unit Area Value” approach because the unit of computation is based on each square foot per month (UNIT) and for a specific location, street (AREA), and multiplied by a rate (VALUE).

The BBMP plans to create a property tax system based on the Capital Value System. Owners will be taxed depending on the property’s capital worth.

The following is the formula for calculating property tax:

Property Tax {K} = (G – I) * 20%

Here, G = X + Y + Z; and I = G * H/100

• G = the value of a gross unit area.
• X = Property’s leased area * Property’s per sq ft rate * 10 months
• Y = Property’s self-occupied area * Property’s per sq ft rate * 10 months
• Z = Vehicle parking area * Vehicle parking area per sq ft rate * 10 months
• H = Depreciation rate in percent (depends upon the age of the property).

PID Number

The PID (Property Identification Number) is a number that identifies that Each BBMP property was issued a new GIS-based PID number in 2012. The PID Number is made up of three numbers: Ward, Street, and Plot. Each street has been assigned a unique street number, and each property has been allocated a property number.

Go to the BBMP’s official website and click on “Citizen Services.” You will be taken to a new page to select the ‘GIS-Enabled Property Tax Information System’ option. Register using your first and last names, as well as your phone number. The property associated with your phone number will be displayed on the map. If your mobile number is not listed there, you can enter your old payment Application ID, and your new PID number will appear.

Ward number, new street ID, and newly assigned property number will all be included in the PID. Please follow the steps in the video to discover your PID number. PID or Khata number, SAS 2008-2009 and 2011-2012 application numbers, receipt, and date are necessary to complete the form.

Zones for Property Tax in Bangalore

The city has been divided into zones A, B, C, D, E, and F. Zone-A would have a guideline value of Rs 7000 per sqft or more, while Zone-F would have a guideline value of Rs 1,000 per sqft or less. Roads are classified by zone, subdivision, and ward on this website. Below is an excerpt from the book. By selecting Residential or Non-residential, you will be taken to a pdf file that contains information about Wards and Streets, as seen below.

l. No.	Zone	Sub-Division	Ward Number & Name	Zonal Classification
1	West	Chickpet	109 – Chickpea 120 – Cottonpet 121 – Binnypet	Residential	Non- Residential
2	West	Gandhinagar	77 – Dattatreya Temple 94 – Gandhinagar 95 – Subhash Nagar 96 – Okalipuram	Residential	Non- Resident

A portion of the Residential Zonal Classification Document is reproduced here. So, Zone B includes Outer Ring Road Bellundar, which has a guidance value of Rs 5001 to 7000, and Zone C includes Ambalipura Village, which has a guidance value of Rs 3501 to 5000.

FAQ’s on Bangalore’s Property Tax

Question 1.
Should the super built-up space or the carpeted space of an apartment be considered?

Answer:
The measurement specified in the schedule to the sale deed must be taken to maintain the measurement aim, as this is incontrovertible proof. Carpet areas are always a source of misunderstanding between taxpayers and the BBMP and should be avoided. The measurement specified in the schedule of the sale deed must be taken to maintain the measuring aim, as this is incontrovertible proof. The overall size must not, however, be less than the area specified in the occupancy certificate.

Question 2.
Has Bangalore’s property tax increase in the fiscal year 2016-17?

Answer:
The last time property tax rates were changed was in 2008 when they were based on 2007 guideline value values. Since then, advisory values have been updated three times, but tax rates have not, according to the BBMP. According to the Karnataka Municipal Corporation Act, property taxes in Karnataka can be increased once every three years. However, it has not been updated since 2008. After six months of debate at various levels, it was finally decided to raise the tax on residential properties by 20% and non-residential buildings by 25%, taking effect from April 1, 2016.

As a result, it is usual for the tax to increase throughout revision. According to current rates for tenanted residential properties, the Unit Area Value (UAV) for Zone E is Rs 2.40 per sqft per month. In Zone A, the proposed UAV for similar categories is Rs 6. This would result in a 150 percent increase in the tax for a residential property moving from Zone E to A.

The jump in zonal classification has been limited to the next higher zone to ensure that the taxpayer is not harmed by more than one jump.

Question 3.
What are some complaint helplines to help the residents get their issues resolved?

Answer:
Yeshwanthpur (080 22660000) has a central control room with ten open lines from 8 a.m. to 8 p.m. There are also revenue officers from all of the city’s zones working in two shifts to assist individuals by providing the appropriate solutions to their problems.

Problems can be reported to the BBMP at:

• Email-Id = contactusbbmp@gmail.com
• Deputy Commissioner, Revenue BBMP = 080-2297-5555
• Phone = 080-2266-0000
• WhatsApp = 94806-85700

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.