A COMPREHENSIVE GUIDE FOR INCOME TAX RETURN FILLING ONLINE FOR 2020-2021

We at PGA a top CA firm in Chandigarh, believe in timely compliance, client awareness and good governance. We believe a business can reach its heights by adhering to best practices and setting up bar of high standards which helps the organisation to make a good reputation, avoid penalties and fines and build investor confidence.

Some of our major services are Income tax planning, Online Income tax return filing, Income tax Litigation, quickbooks accounting etc. Here we try to offer you a comprehensive brief about the filing of online Income tax return.

The Union Government imposes a tax on taxable income of all persons-

  • Individuals (Natural Persons),
  • HUF’s
  • Artificial persons such as Companies, Firms, LLP, Association of Persons, Body of individuals, local authorityand anyother artificial juridical person.

According to the Income tax Act, tax has to be paid by individuals or businesses whose income is higher than the base limits. For the purposes of taxation, individuals and HUF are divided into three categories based on their age.

  • who are below 60 years of age.
  • Senior Citizens – who are between 60 and 80 years of age.
  • Super Senior Citizens – who are above 80 years of age.

Now, while this categorization normally remains equivalent across the years, the slabs of income and tax rates are subject to change during each budget.

Levy of income tax depends upon one’s residential status as well. Residential status of an individual depends upon his citizenship and number of days stayed in India during the previous financial year.Whereas, when it comes to artificial persons it depends upon the residential status of person controlling the entity. Each year while filing ITR, residential status must be verified.

Income tax Slab rates for the financial year 2019-2020

Income slab Tax rate for resident individual and HUF for age less than 60 years
Upto Rs. 2,50,000 Nil
Rs. 2,50,000 to Rs. 5,00,000 5% on income above Rs. 250,000
Rs.5,00,001 to Rs. 10,00,000 12,500 plus 20% on income above Rs. 5,00,000
Above Rs.10,00,001 1,12,500 plus 30% on income above Rs.10,00,000
Income slab Tax rate for senior citizens of age more than 60 years but less than 80 years
Upto Rs. 3,00,000 Nil
Rs. 3,00,000 to Rs. 5,00,000 5% on income above Rs. 250,000
Rs.5,00,001 to Rs. 10,00,000 10,000 plus 20% on income above Rs. 5,00,000
Above Rs.10,00,001 1,10,000 plus 30% on income above Rs.10,00,000
Income slab Tax rate for super senior citizens of age more than 80 years
Upto Rs. 5,00,000 Nil
Rs.5,00,001 to Rs. 10,00,000 20% on income above Rs. 5,00,000
Above Rs.10,00,001 1,00,000 plus 30% on income above Rs.10,00,000

Note:

  • A rebate u/s 87A is available for Rs.12,500 for income upto Rs.5 lakh thus, making No tax for a person having income upto Rs. 5 lakhs
  • Additional 4% Health and education cess is applicable the tax as calculated above

Surcharge for Super Rich applicable on tax calculated as per above

Income Slab Surcharge rate
Rs. 50 lakhs to Rs. 1 Crore 10%
Rs.1 Crore to Rs. 2 Crore 20%
Rs.2 Crore to Rs. 5 Crore 25%
Above Rs.5 Crore 37%

Income tax rates for Domestic Companies

Turnover upto Rs. 400 crores in the preceding year      – 25%

Turnover above Rs. 400 crores in the preceding year    – 30%

Surcharge Rates on domestic companies

where net income is > 1 crores but < 10 crores    – 7%

Net income > 10 crores                                        – 12%

Additional 4% Health and education cess is applicable the tax as calculated above

Why should one file ITR

ITR is mandatory compliance form whereby the Assessee informs the Income tax Department about its incomes, source, deduction availed and such other information.

ITR acts as record for the department. As Taxes are paid on Self-Assessment basis ITR acts as proof with the department to raise any query or raise a show cause when any fishy or fraudulent transaction undertaken by the Assessee.

ITRs need to be filed by an individual or a business for the previous year by 31 July 2020, however, for this year due date is extended upto 30 November 2020 due to COVID-19 pandemic situation. A delay in filing ITRsattracts late filing fees as well as interest on delayed payment of self-assessment tax.

The official website of the income tax Department lists several forms basis the type of income earned that taxpayers may be required to file. While some of these forms are easy to file, while others require professional help due to many disclosures like  Balance Sheet, Profit and Loss, Capital gain computation etc.

Following are some of the forms of Income Tax Returns and details of the persons require to file the same.

ITR-1

Resident individuals having income < 50 Lakhs under the head Salaries/Pension, Other sources, 1 House Property, Agricultural income upto Rs. 5000

ITR- 2

Income from:

Every individual having income > 50 Lakhs

Income from Capital Gains

More than 1 house property

Foreign Income/ Foreign Asset

Holding directorship in a company

Holding unlisted equity shares

 ITR-3

Individual and HUF having Income from Business/Profession

Partner in a firm

Presumptive incomeunder section 44AD, 44ADA or 44AE >50 Lakhs

ITR-4

For Individuals, HUFs and Firms being a Resident and having Total Income upto Rs.50 lakhs from Business and Profession presumptive under sections 44AD, 44ADA or 44AE

ITR- 5

For persons other thanIndividual,HUF,Company andPerson filing Form ITR-7

ITR-6

For Companies other than companies claiming exemption under section 11

ITR-7

For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D

Documents required to file ITR online

We at PGA & Co. Chandigarh, ensure accuracy while calculating tax payable and filing of returns. We use all the tax management tools to minimize your tax liability within the Income tax framework, this make our firm the best Income tax consultant. We encourage our clients to avoid the risks of missing the income tax filing deadline.

Here is a checklist of documents required to file ITR:

It’s important to possess these documents whichever is applicable before we start your online e-filing process.

  1. Aadhar Card, PAN card.
  2. Bank, post office, PPF account passbook or statement for the financial year.
  3. Salary slips for the entire year, if salaried
  4. Form 16- TDS certificate issued to you by your employer to
  5. Investment details such as LIC, Fixed Deposit Certificate, PPF, Mutual funds etc.
  6. Housing Loan interest certificate received from banks/ FI
  7. Form-16A for TDS deducted on income other than salaries
  8. Form-16B for TDS deducted by the buyeron the property sold during the year
  9. Form-16C for TDS deducted on Rental Income.
  10. Form 26AS to be downloaded from Income tax website
  11. Challans of advance taxes deposited, if any.
  12. Challans of Self-assessment taxes deposited, if any
  13. Balance Sheet, Profit and loss account in case already prepared.
  14. Mutual funds, Shares Profit and Loss statement from the broker.

Electronic filing or e-filing is a process that involves submitting ITR electronically. ITR can be filled online with help of direct login to the income tax portal or by uploading XML file or through recognised software’s. All the ITR’s should be verified either through digital signature or through Aadhar OTP or EVC. The ITR’s which are not verified are considered as defective return and is equivalent to not being filed.

To file your ITRs, we suggest you should seek a professional help to avoid any future complications and notices from Income tax department.Now a days, it has been seen that many people are getting notices from Income tax department as the Income Tax has now started generating notices online basis certain pre-defined inputs and common mistakes done by the assesses

Conclusion

Our team provides online support to all the Income tax return filersto enable correct and accurate Income Tax return filing online. We at PGA are providing CA assisted 100% online filing of Income tax returns without having to meet personally at a very reasonable cost specially for this COVID-19 scenario.

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