Filing of belated return without fees

Forgot to file your return & Now worrying about paying fees.
Don't worry ,We have a tip for you.
If your total income doesn't exceed Rs250000 you can still file return without paying fee & interest.

Previous Year and Assessment Year

Previous Year is basically the year for which you pay the tax.It is a 12 month period that starts from 1st April to 31st March.It is also called as financial year or tax year.

Assessment Year is the year in which you file the return for previous year.

Example: For Your Previous Year Starting from 1st April 2020 to 31st March 2021 Assessment Year is AY 2021-2022

Sources of Income

Different Sources of Income for which you need to pay tax are :

(1)Income from Salary : All the money received from your employer while rendering your job comes under the head income from salary.

(2)Income from House Property : Rent income from house or building.

(3)Income from Capital Gain : Gain or loss arising out of selling a capital asset.

(4)Income from Business/Profession : Income or loss arising as a result of carrying Business.

(5)Income from Other Sources : Interest on Savings A/c,Fixed Deposits,Gifts received

Deductions in Income Tax

Deductions reduces your Gross Income Chargeable to Tax. In short these are those amounts which reduces your Tax Liability.

Sum of All heads of Income = Gross Income - Deductions = Taxable Income

All the Deductions are mentioned in Section 80 of Income Tax Act (Section 80C to 80U).

Exemption in Income Tax

A Particular Income Which is not included in Total tax liability is called an Income Tax Exemption. In general Section 10 of Income Tax Act covers all the exemptions. Whereas, Section 54 Covers Exemption for Capital Gains arising on transfer of Residential House.

Some Examples of Income Tax Exemptions are : House Rent Allowance,Leave Travel Allowance,Long Term Capital Gain on Equity fund.

Exemption Vs Deduction

Income tax exemptions are provided on particular sources of income and not on the total income. It can also mean that you do not have to pay any tax for income coming from that source. For example, income from agriculture is exempted under tax.

Whereas, income tax deductions can be claimed on the gross total income. Certain specified investments and expenditure are considered to claim deductions. For example 80C, 80D, 80E etc

TDS ( Tax deducted at source)

TDS stands for tax deducted at source. As per the Income Tax act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TDS has to be deducted at the rates prescribed by the tax department.

The types of payments on which TDS is applicable are:

• Salaries


• Interest income from financial institutions


• Commission payment


• Rent payment


• Professional fees


• Consultation fees

Rebate u/s 87A of Income tax act

An income tax rebate can simply be understood as a form of refund on taxes that you receive from the Income Tax Dept.

Any individual with an annual taxable income of up to Rs 5 lakhs is eligible for an income tax rebate of Rs 12,500. This essentially translates to the fact that individuals with an annual income lower than Rs 5 lakhs are entirely exempted from income tax and can effectively save income tax in India.

Deduction u/s 80C (Investments)

Section 80C of the Income Tax Act of India is a clause that points to various expenditures and investments that are exempted from Income tax. It allows for a maximum deduction of up to Rs.1.5 lakh every year from an investor’s total taxable income.

.

Deduction u/s 80CCC

Deduction for Premium Paid for Annuity Plan of LIC or Other Insurer
This section provides a deduction to an individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving a pension from a fund referred to in Section 10(23AAB). Pension received from the annuity or amount received upon surrender of the annuity, including interest or bonus accrued on the annuity, is taxable in the year of receipt.

Deduction u/s 80CCD(1)

Employee’s contribution – Section 80CCD (1) is allowed to an individual who makes deposits to his/her pension account. Maximum deduction allowed is 10% of salary (in case the taxpayer is an employee) or 20% of gross total income (in case the taxpayer being self-employed) or Rs 1, 50,000, whichever is less.

Deduction u/s 80CCD(1B)

Deduction for self-contribution to NPS – section 80CCD (1B) A new section 80CCD (1B) has been introduced for an additional deduction of up to Rs 50,000 for the amount deposited by a taxpayer to their NPS account. Contributions to Atal Pension Yojana are also eligible

Deduction u/s 80CCD(2)

Employer’s contribution to NPS – Section 80CCD (2) Additional deduction is allowed for employer’s contribution to employee’s pension account of up to 10% of the salary of the employee.

Form-16

Form-16 is a Certificate issued by an employer to employees which helps them in preparing and filing Income Tax Return. It has 2 Components:
(1)Part A : Components of Part A are:

(i)Name and Address of the Employer

(ii)Tan and Pan of the Employer

(iii)Pan of Employee

(iv)Summary of Tax deducted and deposited quarterly, which is certified by the Employer.

(2)Part B : Components of Part B are:

(i)Detailed Breakup of Salary

(ii)Detailed Breakup of Exempted Allowance

(iii)Details of Deductions Allowed Under Chapter VI-A

Form 26AS

It is basically an Annual Statement containing details about :

(i)Tax Deducted at Source,

(ii)Tax Collected by your Collectors,

(iii)Advance Tax Paid,

(iv)Information regarding high value transactions,

(v)Information regarding refund received.

(vi)Self Assessment Tax Payments

Deduction u/s 80CCE

According to section 80CCE, the maximum deduction that can be claimed u/s 80C, 80CCC, 80CCD(1) cannot exceed Rs150000.
However deduction u/s 80CCD(1B) of Rs50000 is not included in above limit.

Form 15G and 15H

Banks Deducts TDS on your Interest Income when it is more than Rs.40,000 in a financial year(prior to FY 2019-20 this limit was Rs.10000).So as to prevent deduction of TDS if your total income is below the taxable limit you can submit form 15G/15H.
Main Objective of Form 15G and 15H is to prevent TDS deduction on your interest income.

Key Points related to Form 15G/15H :

(1)PAN is Compulsory
(2)Form 15H is for Senior Citizens who are 60 years and above.
(3)Form 15G is for Other Individuals or HUF but not for a company or a firm.

Income Under the Head Salary

Salary in simple terms means any amount paid by employer to his employees in lieu of services rendered by them.

Section 17(1) of Income Tax Act 1961 defines the term "Salary" which include the following monetary as well as non-monetary payments :
(a)Wages
(b)Annuity or Pension
(c)Any Gratuity
(d)Any Fees, Commission, perquisite or profits in lieu of or in addition to any salary or wages
(e)Advance of Salary
(f)Leave Encashment
(g)Employer contribution to provident fund in excess of 12% of salary
(h) Contribution by Central Government or any other employer to Employees Pension Account as referred in Sec. 80CCD

Deduction u/s 80 TTA - Interest on Savings Account

Under this Section you will get a deduction of Rs.10,000 against Interest Income on your Savings Bank Account if you are an Individual or HUF.

This Section is not applicable in case of Interest from Fixed Deposits, Recurring Deposits, or Interest Income form corporate bonds.

Deduction u/s 80E- Interest on Education Loan

In this Section deduction is allowed to an Individual for Interest on loan taken for pursuing Higher Education.

The Loan may be for Taxpayer himself, or for spouse, or children or for Student for whom the taxpayer is a legal guardian.

No Restriction on Amount that Can be Claimed.

Deduction is available for a maximum of 8 years period(beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier.

Deduction u/s 80GGB - Contributions given by companies to political parties

Under this section, Deduction is allowed to an Indian Company for any Contribution made to any political party or an electoral trust by any way other than Cash.

Deduction u/s 80GGC - Contributions given by individuals to political parties

This section is applicable for Individuals who contribute to any political party or any
electoral trust by any other way other than cash for any amount.

Deduction u/s 80 TTB - Deduction of Interest Income on Deposits for Senior Citizen

Under this section, a senior citizen will get a deduction of Rs.50,000 for Interest Income on deposits held by them in banks or post office.

Deduction u/s 80 RRB - With Respect to Income Received by way of Royalty of a Patent

(1)Deduction for any Income by way of Royalty for a patent shall be available for up to Rs. 3 lakh or the Income received whichever is less.

(2)The Taxpayer must be an Indian Resident and an Individual Patentee.

(3)The Taxpayer must furnish a certificate in prescribed form duly signed by the prescribed authority.

TCS- Tax Collected at source

Tax collected at source (TCS) is the tax payable by a seller which he collects from the buyer at the time of sale. Section 206C of the Income-tax act governs the goods on which the seller has to collect tax from the purchasers.
Types of goods on which Tcs is levied.
(i) Liquor
(ii) Tendu leaves
(iii) Timber wood
(iv) Forest produce
(v) Scrap
(vi) Motor vehicles
& few other items.