Income Tax

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.

Tax Deduction the Best Way To Achieve A Tax Saving

Tax saving plans have been discussed at length under the domain of tax deduction, with the majority of them relating to Section 80C of the Income Tax Act.

• Section 80C
• ELSS Funds
• PPF and EPF schemes
• Sukanya Samriddhi Yojana
• Senior Citizens Savings Plan
• ULIPs
• Principal Loan Repayment of Residential Loan
• Section 80CCC
• Section 80CCD
• Section 80CCD (1)
• Section 80CCD (2)
• Section 80 TTA
• 80CCD(1B)
• Section 80E
• Section 80D
• Section 80U
• Section 24 of the Income Tax Act
• Section 80CCG
• Section 80G
• Section 80GG
• Section 80DDB
• Section 80GGC
• Section 80EEB
• Section 80JJAA

To allow citizens to focus on saving on their taxes and plan to spend, the income tax department has offered ample exemptions from taxed earnings under consideration for the taxation scheme chapter VI A deductions.

Aside from Section 80C, additional tax-saving alternatives are available to people to help them reduce their financial burden.

Various Sections of Tax Deductions Dealing With Tax-Saving Methods

A tax deduction is an exclusion that effectively reduces a person’s or organization’s overall tax financial strain by decreasing taxable profits. Deductions are traditionally taxes sustained by the taxpayer throughout the budget year and can be transferred to or rounded down from their tax liability to determine just how much more tax is legally owed.

Section 80C

Section 80C is a widely accepted and preferred section by citizens because it permits them to mitigate their tax payments by making tax-saving transactions or incur additional registered expenditures.

It provides a permissible exemption of Rs 1.5 lakh from the taxpayer’s estimated total revenue every year.

Individual people and HUFs can only benefit from this clause. This exclusion is also not readily accessible to organizations, alliance companies, or LLPs.

Keep in mind that the cap exclusion is limited to Rs 150,000; furthermore, there is no lowest possible ceiling value.

Who Qualifies as an Eligible Assessee to Secure this Most Popular Tax-Saving Scheme?

Specific individuals and HUFs are the only ones directly that can often enjoy the benefits of the deduction for tax-saving under Section 80C. This implicitly assumes that corporations, limited liability partnerships, or any other association of individuals/body of individuals cannot assert a tax deduction under this specific Provision.

In-depth explanations of the investments that are considered for this tax saving under this section

• Fixed Deposit Investments: Bank fixed deposits have five years lock-in duration and are subject to tax-saving opportunities under section 80 C. The public interest gained on those fixed deposits, though on the other hand, is not refundable. It has no risk factor associated with it.
• Payment on Insurance Policies: Life insurance, premium costs as one of today’s modern everyday needs, are one of the most apparent forms to demand savings under section 80 C.

A life insurance monthly premium is a regularly occurring contribution made to an insurance company in interchange for coverage. This program behaves as a welfare safety net by contributing the policyholder’s relatives to accidental death or maturity, as defined.

It is imperative to analyze that only life insurance for the defendant or their close relatives accounts for the 80 C exemption.

The permissible exemption is the smaller number of the following-

1. 10% of the gross amount protected,
2. or the amount of premium charged

ELSS Funds

Capital expenditure in Equity Linked Savings Scheme mutual funds is also subject to tax deductions under section 80 C.

ELSS is a legitimate form of mutual fund that aims to help investors save a little tax on their expenditure while still reaping the benefits from capital appreciation.

An ELSS mutual fund is easily distinguished by a predetermined lock-in time frame of 3 years from the deadline of purchase made.

Financial investments in ELSS are considered exempt under section 80 C, limited to a maximum of RS150,000 per year.

A pretty crucial thing to keep in mind for every ELSS transaction is that, even if the lock-in’s entire duration is three years, the standard deduction gain is only accessible in the year in which the transaction is established.

It typically carries equity-related hazards and currently offers no guaranteed returns.

PPF and EPF schemes

PPF most often plans to invest in fixed-income assets. These investments offer clients a guaranteed return on capital and financial stability.

PPF returns are around the rate of 8% per year., which could also prove to be on the downward trend, but there is no other possibility of capital loss at all with this fund.

A PPF must be essentially invested in for a bare minimum of 15 years.

Venture capitalists must first acknowledge this before determining whether one should invest in this product to take added benefit of the Section 80 C deduction.

Pension contributions to the EPF account, up to a certain amount of Rs150,000, are excluded mostly under Section 80C for all salaried citizens.

However, one can mention with no room for doubt that the employer’s payment is not tax-deductible under Section 80C.

Sukanya Samriddhi Yojana

This investment portfolio is tailored explicitly for the support and help of the female kid. As the title strongly suggests, this procedure is only relevant to the mother and father of a girl child at the age of ten.

The total returns from this compensation program vary between 8 and 8.5 percent, and the financial contribution is permitted for deduction under section 80 C.

It is free from any sort of risk association and offers fixed rates of return. The lock-in time period stretches for up to a whopping 21 years.

Senior Citizens Savings Plan

This fund is a pretty good means for elderly individuals over the age of sixty to gain by having annual returns on their assets. This reasonably long tax-saving systematic development provides much-needed extensive coverage depending on the investor’s age group.

The maximum payout that the concerned taxpayer can invest in an SCSS account is 15 lakhs, either individually or collaboratively.

It is indeed fully and wholly risk-free and has guaranteed interest rates.

The lock-in duration typically lasts five years.

ULIPs

ULIPs, very much like LIC general policies, combine the two insurance and retirement savings. A percentage of the equity investment in this program is used for insurance premiums, whereas the remaining is invested in new similarly to actively managed mutual funds.

It is advised that citizens should invest for at least 5-10-15 years to accomplish the considered necessary units. The capital investment may be in either just debt or Equity, and it is also up to the individual to ultimately decide where and how to allocate their funds available.

Certain expenses can be considered for the tax-saving regime under this section of the Income Tax Act.

Principal Loan Repayment of Residential Loan

The EMI you pay each and every month to repay your home loan debt is characterized by two key aspects: principal amount and interest accrued.

The substantial component of the EMI is eligible for deduction under Section 80C. Then again, the interest portion can potentially save you a good amount of revenue in taxes – but only under specific rules of Section 24 of the Income Tax Act.

• Stamp Fee and Registration Expenses for a residential property: The overall amount you pay as stamp duty whenever you acquire the necessary residential property and the interest you pay for the certification of the house’s legal paperwork can be reclaimed as a tax deduction under section 80C for the purpose of tax-saving in the year of legal purchase.
• Education fees structure for higher studies or any other education form: Tuition costs paid yearly or otherwise to any educational institution based in India for the stated purpose of complete education can be later claimed under 80C for a limitation of two students. Payments for future development fees, contributions, and similar items do not certainly qualify for a Section 80C deduction.

However, it should be essentially emphasized that no reimbursement will be authorized under any possible circumstances for tuition fees payable for self-study or academic studies of spouse or partner.

Section 80CC

This clause of services allows individuals to exclude certain up to Rs150,000 for transactions committed to a LIC or other insurance company installment scheme.

However, the revenue paid directly after the total surrender of the investment account and the interest received on the lump sum is applicable for the taxation scheme in the year of acquisition.

Section 80CCD

Individual people will exempt from financial investments from the National Pension Scheme (NPS) or The Atal Pension Yojna (APY), pursuant to this significant segment.

(This is a mandatory requirement for all of the Central Government employees.)

The National Pension Scheme (NPS) is a government-sponsored based voluntary pension program. It requires an individual to prepare for his retirement benefits adequately and perhaps start building a foundation for advanced age.

It primarily serves as a saving pathway by promulgating uninterrupted financial investments, mainly during a productive career, in order to establish a reasonably sizable portfolio even after full retirement.

NPS is open and available to all citizens of India between the ages of 18 and 65.

Perhaps the only mandatory requirement with this is that the person continues to follow the Know your customer (KYC) rules and guidelines.

These sections are further divided into the subsection specifically mentioned below this.

80CCD (1)

This section extends to all local workers, whether they work for the public sector or some other organization or are currently self-employed. It applies equally to all Indian citizens (including NRIs).

The standard deduction is only about generally applicable to-

3. An absolute maximum of 10% of base salary is legally allowed for – full-time workers and
4. Self-employed local taxpayers also can deduct the amount up to 10% of their taxable income.

80CCD(1B)

Manager, i.e., the employ company’s premiums of equal to 10% of basic plus the extra DA are tax-deductible under this Provision.

The manager’s net contribution, here, on the other hand, is a separate and distinct exclusion, but since it wasn’t included in the 1.5 lakh specifically authorized under Section 80C.

Regardless of whether paid a salary or self-employed, this claimant is legally liable for an extra spare standard deduction of Rs. 50,000.

Section 80CCD (2)

This provision appears to apply to where a prospective employer contributes significantly to the NPS fund on behalf of the rest of its working staff. Furthermore, the personal allowance is only applicable to salaried working people, not self-employed specific individuals.

Employer expenditures of up to 10% of basic plus the extra DA are deductible under this stipulation.

However, even though it is not counted in the 1.5 lakh and legitimately permitted under Section 80C, its net contribution is a different and independent exception.

To further sum it all up,

• Under Section 80CCD (1) Plus Section 80CCD (1B) for the applicable economic year, the aggregate tax benefits can be up to 2 lakhs.
• Kindly be informed that the whole total cap of Section 80 C + Section 80 CCC + Section 80 CCD is Rs150,000.

Other tax-saving alternatives under the deduction clauses

Section 80 TTA

In case you are already a citizen or a HUF, you can exclude up to a maximum of Rs 10,000 from the interest expense achieved on your bank savings account with a local bank, co-operative society in general, or local post office. This would also include the benefit from your bank account in one of your other revenue.

However, the Provision 80TTA tax deduction does not generally correspond to interest fees from fixed loans, recurring deposits, or corporate debt.

Section 80E

Individuals are allowed to minus the interest accrued on student loans used to continue their schooling without any cause of hindrance. The concerned individual may have somewhat taken out this bank loan for the whole borrower, their spouse or children, grandchildren, or a young student over which the taxpayer has legal guardianship.

The 80E standard deduction is readily accessible for a time span of 8 years (scheduled to begin with the year the loan commences to be recovered) until either the entire financial interest is repaid in full, whichever one finally comes first.

There are no specific strict upper limits on the quantity that one can demand.

Loans are considered out for younger siblings or otherwise, and other families are not approved for the program.

It has already been explicitly provided that architecture should come into the general engineering category.

The concerned student can conduct the education from anywhere in the world, not just limited to India.

One can also use the school bank loan to pay tuition or education utility bills and other miscellaneous costs such as accommodation fees like a hostel, books prices, etc.

Section 80D

If you are an Indian citizen or HUF, under this clause, you can subtract Rs.25,000 for medical insurance for yourself, only your own family, and your minor kids under section 80D.

However, if your guardians must be under the age of 60, you can claim an extra spare Rs 25,000 exclusion for only their health care coverage. If the mother and father are above the age group of 60, the deductions and exemptions number is Rs 50,000, quickly up from Rs 30,000 in Budget 2018.

Suppose the claimant and the mother and father or anyone parent is 60 or significantly older. In that case, the highest exemption generally available under this same Provision of services is Rs.1 lakh.

Healthcare policy is offered via the General Insurance Corporation of India or just about any insurer legally authorized by the Insurance Regulatory and Development Authority.

Section 80U

A current resident who has to suffer from a health condition (including visual impairment) or cognitive impairment is eligible for benefits for an Rs.75,000 standard deduction. In the event of a significant injury or illness, a reduction of Rs 1,25,000 is fully available.

From the financial year, 2015-16, the Section 80U exclusion price cap of Rs 50,000 has been increased to Rs 75,000, and the upper limit of Rs 1,000,000 has been massively increased to Rs 1,25,000.

Section 24 of the Income Tax Act

Section 24 essentially accounts for a tax waiver of up to Rs 2,000,000 in genuine interest on a home equity debt in a financial year. The appellant may indeed exempt up to Rs 2 lakh from his or her aggregate Income considered for taxation under the definite header of house ownership. The personal loan could very well be provided to obtain, continue building, upgrade, restore, or rehabilitate the house.

But even so, again, the exclusion would not necessarily correspond to just about any brokerage house or transaction fee to any middlemen or local agents by the defendant. The maximum interest paid incurred under each EMI is always calculated by the assessee before publicly claiming the financial tax gain.

The value of the property’s annual potentially worth will be calculated as obeying:

1. The average annual income amount may become the maximum sum of money of rental earnings that the taxpayer anticipates obtaining year after season. This calculation is pretty commonly being used for considered let out a piece of land.
2. As well, during the financial season, the taxpayer can lease out the residential property. The assessee’s investment income misses the mark of the sum stated clearly in point (1). Here in this specific circumstance, the full payment of residential profits made would have been the value of the property’s estimated annual valuation.
3. Even during the budget quarter, the landlord in question who pays the tax can decide the residential property to rent out. Suppose the asset was empty for the overall financial year either for a portion of the fiscal year. Primarily because of the vacancy, the landlord’s total rent rightfully earned or accounts receivable more diminutive than the range determined in point (1). The approximate amount of rental profits paid in this circumstance would be the gross annual real value.

Section 80CCG

Under a situation where a citizen’s taxable profit salary is far less than Rs.12,00,000, he is legally accountable for the Section 80CCG deductions. This exemption is highly focused on the person investing money in the stocks or mutual funds of the various authorized firms.

Since Rajiv Gandhi played a vital role in the innovation of this mechanism, it is widely known as the ‘Rajiv Gandhi Equity Saving Scheme.’

Only entities having saved for the first time in their financial career are legally required to avail benefits under this development program. Again, and again, someone who has never done sometimes so would have been unable to keep control of this tax-saving mechanism.

Section 80G

The multiple charitable contributions listed under section 80G are immediately available for depreciation of up to 100% or 50%, both with and without constraints.

From the budget term 2017-18, any small cash charitable donations exceeding Rs 2,000 will not be legally recognized as a deduction. To necessarily apply for the 80G deduction, transactions above Rs, the taxpayer demanding the tax-saving regime must make 2000 in a context other than some free liquid cash.

Section 80DDB

There are specified disorders that are referenced in the tax legislation. Deductions are currently available for mostly expenditure compensated in the prevention of specific pre-mentioned ailments.

Section 80DDB effectively allows for an otherwise discount. Cancer and AIDS, for example, in the case, necessarily entail considerable amounts of money for diagnosis as well as being very risky and expensive. As a natural result, the IT Department is responsible for providing tax benefits for certain terrible diseases.

Section 80GGC

Person local taxpayers are eligible to receive deduction benefits under section 80GGC for any sum of money generously donated to a particular political party or electoral process trust.

It would not be widely open to firms, municipal governments, or artificial juridical persons involved who the state’s government directly or indirectly subsidizes. This standard deduction is only made available if you compensate by a particular method other than quick cash.

Section 80GG

If a salaried worker or self-employed individual in a rented dwelling house does not get the HRA allowance, they can start demanding a standard deduction under this clause of 80GG). Conversely, if you, your life partner, or your offspring own any other residential real estate in India or living overseas, then you are ineligible to receive this financial advantage.

Section 80GG specifies the methods that are perhaps the least of the following points:

25% of total income tax, or Rs. Two thousand a month on average, or the excess of rent charged well above 10% of total Income.

Section 80EEB

The maximum possible specifically exempted lump sum under this Provision is Rs. 1.5 lakh.

The taxpayer could automatically deduct the interest charged on the loan used to buy an electric two, three, or four-wheeler to Rs. 1.5 lakh.

Section 80JJAA

At the current moment, any claimant with taxable Income who is subject to tax audit under section 44AB will seek a standard deduction under section 80JJAA for granting work opportunities to significant new employees working.

A reduction of 30% of additional new staff salaries accrued in the operation of such enterprise in the years preceding over three evaluation years, plus extra the assessment year equally applicable to the previous financial year in which such actual work is given, is appropriate.

New Tax Regime

Round 70 deductions and exemptions are largely eliminated all under the current taxation regime, including regular exemptions, HRA, housing finance interest charges, student loan tax, expenses paid on physical impairment of self or dependent, cost of emergency medical care of self or dependent, LTA, cash deposits under Section 80C, savings bank interest under Section 80TTA, and investment gains for older people under Section 80TTB.

Nevertheless, the latest reform has not eliminated approximately 50 exemptions and deductions. The following are some of the many exemptions and deductions that can be immediately sought all under the current fiscal tax regime:

1. The net contribution of employers to the National Pension Scheme (NPS)
2. Standardized monthly rent tax exemptions of up to 30%
3. Income from lifetime financial benefits from various insurances and policies, given the health insurance coverage, is ten times the annual premiums
4. Agricultural production income with a given cap of explicit nil
5. The amount of Rs 5 lakhs limits additional compensation for retrenchment.

Change Assessing Officer and Jurisdiction for Income Tax: Every citizen of our country must file their income tax return. The assessee needs to speak to the income tax authorities for various reasons. It can clarify any doubt the officials may have or talk about their grievances related to tax filing. Hence, it is crucial to know under whose jurisdiction of the Income Tax Department you come. You can learn about everything related to Income tax, such as the tax ward, circle, assessing officer, etc., from the change of setting officer and the jurisdiction.

We will discuss the officer, their jurisdictions, and the circumstances in which you can contact them if required. You can also get to know how to change the assessing officer if you need.

Overview of the Assessing Officer

An assessing offer is a person who has the authority or jurisdiction to make tax assessments of an assessee, i.e., you. You may know them as the Income-tax Officer, the Assistant Commissioner, the Deputy Commissioner, the Joint Commissioner, or the Additional Commissioner. They all have different natures of trade and other incomes according to their position.

How You Get Assigned with an Assessing Officer?

If you are a taxpayer, then your address in your PAN card determines under whose jurisdiction you come. You will be under the income tax officer accordingly. They have the responsibility of assessing the records of all taxpayers in the geographic area under their jurisdiction. They will determine the returns for you.

How to Identify Your PAN Jurisdiction and AO Code?

If you are looking for your PAN jurisdiction details and the information of your current AO, you can get it without logging in to the income tax portal by following the steps below.

1. Go to the official website of the income tax department.
2. Then click on the ‘Know your Jurisdictional AO’ link on the site.
3. Enter your PAN number and mobile number.
4. Hit submit.
5. You can receive a one-time password on the phone number you have registered with the authorities.
6. You have to enter it in the space on the website. (You will get three attempts to enter the correct OTP)

When Can You Contact the Assessing Officer?

You can contact the officer in charge if you have concerns regarding the following points.

• To clarify the income tax returns.
• To respond to invalid outstanding demand or clarification regarding the satisfaction of outstanding demand.
• To rectify the Challan no. 280.
• To present notice for processing income tax returns from the assessing officer.
• For challan no. 280 correction

While filling the challan no. 280 for self-assessment tax, if there is some mistake such as wrong assessment year or incorrect TAN or PAN, it is necessary to correct it. Otherwise, the tax authorities will not be able to credit the refund, and you might get a notice from the Income-tax department for the tax due.

Does Change in PAN Address Automatically Change Assessing Officer?

The change in your PAN address does not automatically change the assessing officer in the database. If you need to change the assessing officer since you have changed the address, you have to write to your current officer. They will take the necessary steps to transfer the jurisdiction and record to the appropriate officer. Your current assessing officer will help you migrate to the new jurisdiction if they are satisfied with the proposal. They will notify the new officer.

Hence the conditions under which you can change the assessing officer are as follows.

1. Change of address of jurisdiction
2. Change of assessing officer in case of unethical behavior

How to Change The Assessing Officer in Case of Change in Address?

There are two ways you can change the officer after an address change. The first option is to visit the office physically.

• Please make an application with the competent authority, and print six copies of it.
• Send one copy of the application to the AO, CIT, and Addl/ Jt. CIT. each.

For example, if you have moved from one place to another, you will need to intimate the current jurisdictional tax officer by writing a letter to them. In some rare cases, the jurisdiction can get modified without your request, but it is unlikely.

The other option is to make the changes through the online government portal.

• Firstly, log on to the NSDL site and apply for the updates with the address on the PAN card.
• Please make an application to the current jurisdictional officer and request them to transfer your assessment records to the new officer in the new area.
• Pay the requisite fees.
• Provide the following details:
• Your PAN number and name
• Your current AO circle and ward
• The details of the AO circle or ward where you wish to seek the transfer
• Reason for transfer

For example, I am residing in Jharkhand, and my Jurisdiction is Ward 33, Jharkhand; due to some reasons, I wish to shift to Kolkata and intend to change my ward. Hence, I have submitted an application to my assessment officer in Jharkhand asking for the transfer of all my legal documents to the officer in Kolkata and the said acknowledgment letter’s copy to the new jurisdictional officer and inform them about the update that they will receive.

How to Change your AO by Changing your Address in your PAN?

Each PAN holder has a separate range based on their income and geographic details. People need to know about it since it will be helpful to them in the future if they wish to change their address. You can follow the steps below to change the address on your PAN card.

• Visit the NSDL website.
• Go to the New PAN correction DSC.
• Please fill all the relevant parts of the application and upload all necessary documents supporting it along with a photograph.
• Submit the form.
• Make the payment.
• Save and print the acknowledgment notice you receive at the end of the transaction or submission.
• Sign this acknowledgment after signing it and glue on your photographs, and sign on one of them as well.
• Send this signed acknowledgment letter to the NSDL with all supporting documents by post with fifteen days of online application.

Disclaimer: It is vital to read the guidelines on the NSDL website before you fill the form so that you don’t make any mistakes while filling it.

How To Make A Change If The Assessing Officer Is Unethical Or Impolite?

If you have a grievance or a complaint with your assessing officer, you can lodge a complaint to the Ombudsman in the income tax department. You require a complaint letter where you mention the following details.

• Your name and address
• The name of the assessing officer against whom you have a complaint
• Exact details of the grievance with relevant proof and documents to support your statement
• Signature of an authorized representative
• If you wish, you can also provide an online complaint to the Ombudsman and they will sign it.
• The date when you send the letter is considered as the date of filing the complaint.

If you are not satisfied with the authority, since they don’t perform their duties ethically, you can request for the change. The grounds for which you can choose to change your officer for unethical practices are as follows.

1. Income tax officials behave rudely with the assessee
2. Delay in the payment of refunds beyond the reasonable time limit
3. Lack of transparency while identifying the cases for scrutiny and non-communication
4. If the AO does not perform its duties

If the AO has wrongly assessed your return (For example, if the AO has made a mistake in treating the expenses of construction of Rs. 2,00,000 as capital expenditure, then the aggrieved party doesn’t need to submit any applications or documents. They can directly appeal within thirty days of receiving the order. The commissioner will then decide a date and time for the hearing from the aggrieved party and the AO).

Where to Address The Letter About Changing The Assessing Officer?

Two situations may occur here if the current assessing officer and the transferred officer may fall under the same jurisdiction of The Director-General or Chief Commissioner of Income Tax or Commissioner of Income-tax or CIT.  In this case, they should get the letter about the change with a copy to the assessing officer (AO) in case it is an issue where you want to change your address.

Suppose the current assessing officer and the assessing officer where you wish to transfer do not fall under the jurisdiction of the same Director General or Chief Commissioner of Income Tax and Commissioner of Income-tax or CIT. In that case, you can write the application to the Director-General or DGIT or the Chief Commissioner of Income.

Examples of Mail

For Income Tax Refund

Dear Mr./ Mrs./ Ms. SO,

We are pleased to inform you that your Income Tax Refund as determined by the ITD has been processed.

Kindly find attached the payment details. The advice is password protected. Kindly use your PAN number in capital letters to open it.

For more details kindly contact the CPC XYZ at 1800-425-2229 (toll-free) or 080-2256500 if you have filed the return online. You can visit the local income tax ward and contact your assessing officer.

In Response to Outstanding Tax Demand

Dear SO,

The response for outstanding tax demand is submitted for the User ID ACXXXXX8D, and your transaction ID is 20202020.

Disclaimer: Though your response has been recorded it is subjected to verification and confirmation by the Jurisdictional Assessing Officer.

How to Track the Application for Change in Assessing Officer?

Generally, if you have posted an application, you will receive emails about the updates on your email. You can also get updates on the correspondence address from the department informing them about the change in the address and jurisdictional officer. Once your officer has successfully changed, you can check it from the KNOW YOUR JURISDICTION section online.

Significance of Knowing your PAN Jurisdiction and Assessing Officer

Your assessing officer has several responsibilities, including the following:

• Issuing the PAN Card
• Ensuring the Taxes are collected timely
• Assessing the income and calculating the tax you owe
• Evaluating your income returns of ITR
• Issuing tax refunds
• Providing solutions for the complaints by the taxpayers under their jurisdiction
• Sending notices in case there are any discrepancies in the ITRs

The AO also has many other responsibilities. They also hold the power to impose penalties on you or wave them off. Each income tax department of the ward has one or more AOs for them. If you know your PAN jurisdiction and the AO is helpful when you wish to visit them in person or to send an email. You might want to contact them about a notice that you received or to give clarification for the information. Visiting them can serve other purposes as well, such as raising a dispute about a notice, making a complaint about some part of the income tax process, and much more.

The AO code consists of four elements as follows.

1. Area code
2. Range type
3. AO type
4. AO number

Furthermore, there are four AO code types that will help the authorities to identify the individual or the company and to associate them with the proper tax laws.

It is easy to know your PAN AO’s jurisdiction if you have a valid PAN card number. You can find it out by entering the AO code and your PAN details on the official website. Apart from this, you may have to provide these details when you wish to file the income tax returns.

There isn’t any way you can migrate your PAN without the current assessing officer accepting your request for transfer. It is best to deal with it as soon as possible because it might take some time.

Stamp Duty: Stamp Duty is the tax imposed on the purchase or sale of legal property, attorney, documentations, and agreements. The validity of an agreement is only considered when the other party duly signed it and doesn’t back out of it or play a scam. The stamp paper is basically a transaction tax for the government’s revenues.

Stamp Duty

According to Section 3 of the Indian Stamp Act,1899, Stamp Duty is payable to ensure the legality of purchase and sale of a property, legal attorney, and agreements. The rates of Stamp Duty are different in every State for specified instruments which are determined by the Central Government. If an individual has done the proper payment for Stamp Duty on his/her document or agreement then, his/her document is accepted and admissible as evidence in court. A document is not accepted and admissible as evidence in court when it is not properly stamped.

Adoption Deed Affidavit, Divorce Entry or Memorandum of Marriage, Gift Indemnity Bond Lease, etc, are some of the documents which require payment of Stamp Duty.

Stamp Duty is considered to be the best source of revenue for each and every state. Stamp Duty is the second largest revenue source in Maharashtra after sales tax.

To ensure the validity of an agreement, it is important that the Stamp Paper must have the name of the concerned party or business purchasing it. An individual can claim a refund for an unused Stamp Paper but he/she has to make the claim 6 months from the date of purchase.

Need for Stamping

Stamp Duty is the tax imposed on the purchase or sale of legal property, attorney, documentations, and agreements. The validity of an agreement is only considered when the other party duly signed it and doesn’t back out of it or play a scam. The stamp paper is basically a transaction tax for the government’s revenues. Most of the documents are considered valid if they have a specific value printed on the Stamp Paper. The value printed may start from a minimum value of Rs.10 to no limit on the maximum value.

 

Terms Associated with Stamp and Stamp Duty

• Instrument: Instrument means any document transferable, created, limited, extended, extinguished, or recorded for any right or liability.
• Execution: Execution means taking signatures of the party/parties concerned with the execution of the instrument.

Stamp Duty Collection

Identification of the document/instrument’s category is the first step for the calculation of Stamp Duty. For calculation of Stamp Duty, there are three categories as follows;

• The value of Stamp Duty is fixed under the First Category even if a different value is mentioned in the document/instrument. Administration Bond, Affidavit, Adoption Deed, Appointment in Execution of Power, Divorce, Apprenticeship Deed, Award, Article of Clerkship, Cancellation Deed, Duplicate, Charter Party, Copy of Extracts, Indemnity Bond, Power of Attorney, etc. are the examples of such instruments.
• The value of Stamp Duty charges is dependent under the Second Category, upon the mentioned value in the document/instrument. Mortgage Deed, Lease Agreement, Title Deeds, Security Bond, Hypothecation Deed, Article of Association, etc are such instruments.
• The value of Stamp Duty depends either on the market value or value mentioned in the document/instrument under the Third Category. Conveyance, Agreement for sale, Gift exchange, Partnership Deed, Development Agreement, Transfer of Immovable Property, Trust Deed, Partition, etc are such instruments.

Who Pays the Stamp Duty?

In case there is an absence of any agreement, the Stamp Duty is to be paid by the purchaser whereas both the parties have to bear the Stamp Duty equally for the purchase of a property.

Payment Process for Stamp Duty

There are three ways for payment of Stamp Duty. Although, these options are not available for every state. It is the choice of an individual to choose the method if all of them are available. The payment methods are;

• Use of Non-Judicial Stamp Papers.
• Use of E-stamping facilities.
• Use of a Franking machine.

Difference Between Stamping, Notarising, and Registering a Document

Stamping, Notarising, and Registration of a Document are different from each other.

1. Notarisation is the process of certification of a document and the signature of the individual. It is done by a Notary and the process of notarisation is performed under Notaries Act, 1952. Notarisation is done to certify the document’s genuineness and for fraud prevention. The Notary is a potential, unbiased witness to ensure the documents are genuine.
2. Registration is the process of entering the subject matter of the documents. Document registration acts as a notice to the public. The compulsion of document registration is dealt with under Section 17 of the Indian Registration Act 1908. To conserve the evidence and title, registration plays a crucial role.
3. Stamp Duty is payable to ensure the legality of purchase and sale of a property, legal attorney, and agreements. Stamp Duty is considered to be the best source of revenue for each and every state. If an individual has done the proper payment for Stamp Duty on his/her document or agreement then, his/her document is accepted and admissible as evidence in court.

Telgi Stamp Paper Scam

Duplicacy of Stamp Papers and their sale to banks and other institutions were the reason for the Telgi Stamp Paper scam. The scam included a huge blow of Rs.32,000 crores to the Indian economy. The mastermind behind this multi-crore scam was Abdul Karim Telgi. He printed fake stamp papers using Stamp-printing machines which he acquired illegally with the help of the Central government’s security printing press officials which is located in Nasik. In more than 12 states, the fake stamp papers dig through a widespread network of vendors.

The scam broke in August 2000 when Bangalore police arrested 2 possessing fake stamps. The job was assigned The Special Investigation. Telgi and several associates were sentenced to ten years’ strict imprisonment on the 17th of January 2006. Telgi was sentenced to 13 years imprisonment and fined a whopping Rs 202 crore on the 28th of June 2007.

How to Find Jurisdictional Assessing Officer – Income Tax: Sometimes while executing income tax-related work, one has to meet the Jurisdictional Assessing Officer, or simply they are known as Assessing Officers. These types of officers are related to one’s PAN number. Many people are still unaware that they need to consult Assessing officers while facing problems in the process of filing income tax. One can commit a lot of mistakes while filing the income tax if he/she is not acquainted with the process. Therefore through this article, we will try to explain the steps that one can take to find a Jurisdictional Assessing Officer.

Assessing Officer of Income Tax

An Assessing Officer is considered to be a person who has assesses as well as the jurisdiction for making the assessment of an assessee who is considered liable under the Income Tax Act. He/she is responsible for making tax decisions and judgments for a particular assessee. This type of designation seems to vary depending upon the volume of income or nature of trade which is assigned by the Central Board of Direct Taxes (CBDT Board is a department that deals explicitly with income tax). An Assessing Officer can be an Income Tax Office, Deputy Commissioner, Joint Commissioner, Assistant Commissioner, or an Additional Commissioner.

Why One Needs an Assessing Officer?

Most people consider Income Tax Laws as complicated and difficult to understand. The CBDT board gives out a lot of instructions, guidance notes, and circulars for the taxpayers so that they can understand the ways of interpreting tax laws. However, the truth is that assessments of tax involve both subjective as well as objective considerations and that the Assessing Officer is considered to be a quasi-judicial statutory authority who is responsible for safeguarding the interests of the Income Tax Department and at the same time show some objectivity in assessments.

These are some following situations when one needs to meet an Assessing Officer:

• When one has committed mistakes while filling up the Challan 280 online.
• When one receives a notice from the Income Tax Department for different reasons such as outstanding demand, scrutiny, or for following up the refund to get some reasons for why it has not been processed, basically, one needs an Assessing Officer when he/she wants somebody to represent himself/herself in a particular case.

However, even after meeting the Assessing Officer, no actions are taken then a taxpayer has all the rights to move up the hierarchy and write a letter to the Jurisdictional Chief Commissioner and send it along with the copies of the previous letters that have been sent to the Assessing Officer and a copy of the tax return filed.

Note:

It is not at all compulsory for the taxpayer to meet the Assessing Officer personally, he/she can send a lawyer or a Chartered Accountant on his/her behalf in order to submit all the required papers.

Finding Jurisdictional Assessing Officer

Jurisdiction of an Assessing Officer is considered to be a particular area within which the officer has the right to assesses different requests. It is known to be associated with the PAN ( Permanent Account Number ). A permanent Account Number is an identification number that is given to every taxpayer, and as the name suggests, this number is permanent, and it doesn’t change during a PAN holder’s lifetime. Although changing the address or city in the PAN might change the Assessing Officer. A taxpayer must ensure that such changes are reported to the nearest IT PAN Service Centres or TIN Facilitation Center for executing the required correction in the PAN databases of the Income Tax Department.  These requests had to be made through a form for requests for New PAN card or Changes in the PAN card.

Steps to Find a Jurisdictional Assessing Officer

One has to search for his/her assessing officer from the first week of February. So to execute this process of searching, he/she has to follow the following steps:

• Firstly, a taxpayer needs to login into his/her account on the income tax e-filing website. This is done with the use of a password as well as the PAN number.
• Go to the menu option and click on profile settings
• Then click on the option ‘PAN details’. After clicking the option, one will be able to see the jurisdiction info.

Meeting the Jurisdictional Assessing Officer

After submitting the required documents to the Assessing Officer, one will get an acknowledgment. Acknowledgement seems to be a stamp on the letter that the taxpayer has submitted, which shows the date of submission. A taxpayer is required to take two copies of the letter. For the purpose of the documentation, always remember to keep a copy of the papers that have been submitted and always submit the xerox and not the original document.

Change of Assessing Officer and Jurisdiction of Income Tax

The income tax return is typically processed by the Central Processing Cell (CPC), which is located in Bangalore. But in some cases, the taxpayer might feel the need to contact his/her Assessing Officer. One might need to change the Assessing Officer or the jurisdiction of Income Tax for the following reasons:

• Income tax refund
• Response to the outstanding tax demand
• Correction of challan 280
• Notice for processing of income tax return in order to meet the assessing officer

It is common that taxpayers shift places because of their work or some other personal reasons. In this case, due to the change in taxpayer’s address, there is various information that is to be changed and modified for the filing of tax returns. For example, let’s say a taxpayer shifted from Bangalore to Mumbai for his work. Here, the taxpayer’s old jurisdiction is Bangalore. However, for future dealings with the Income Tax Department, the taxpayer had to change his jurisdiction to Mumbai. In such cases, the taxpayer needs to inform the existing jurisdictional income tax officer about such change through a written application. Many times the jurisdictions are changed automatically.

If a taxpayer wants to change his/her jurisdiction for change in address or an ill-mannered Assessing Officer, then he/she must keep the following things in mind:

• A total of six copies of the application must be filed with the competent authority.
• Copy of the application must be sent to the concerned AO, CIT and Addl./Jt.CIT.
• As per Section 137(4) of the Income Tax Act, 1961, one can transfer his/her income files at any stage of proceedings, even if the assessment is pending.
• After the file is transferred, then the demand or the refund of tax can be collected or refunded by the new assessing officer. Now the Central Processing Center is responsible for processing a day’s demand or refund.

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.

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.

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.

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