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Understanding Income Tax Returns in India
We have two types of taxes in India – Direct Tax and Indirect tax.
Direct Tax is a tax that is calculated directly on your Income e.g. tax on salary etc. Income tax is a Direct Tax.
Indirect Tax is a tax that is indirectly charged. And is put on goods or services. So if you are purchasing a mobile phone or a new suit. Most indirect taxes have now come under Goods and Services Tax (GST).
Income Tax (Direct Tax)
Anyone earning an income above a certain amount is subject to income tax. The income could be from salary, rent, and interest income from savings, income from mutual funds, sale of property or business or professional income. Income tax rates are decided at the start of the financial year in the Union Budget (in the Parliament of India). The tax paid on these incomes is called the income tax.
Income Tax Return
It is simply a Form to be filed with the Income Tax Department. A Form to be filed as a statement of income earned. It is arranged in such a way that calculating tax liability, scheduling tax payments or requesting refunds for the overpayment of taxes has been made convenient for the taxpayers. They must, first, determine the type of Income Tax Return (ITR) Form they need to fill before actually filing their Returns. Which Form is to be filled, depends on the income that the taxpayer earns. Its purpose is to report our income and taxes paid thereon to the government.
Why use LegalRaasta?
The perks of using our free ITR-Filing service
Types of ITR
There are up to 8 types of Income Tax Return Forms, currently. We have divided them into 2 parts:
|ITR Forms for Individuals||ITR Forms for Non-Individuals|
|ITR – 1 (Sahaj) – For individuals earning income from salaries, one house property, interest income, agriculture, other sources, etc.||ITR – 5 – Entities other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7|
|ITR – 2 – For Individuals and HUFs having income other than from profits and gains of business or profession. It may be from capital gain, lottery or foreign assets, etc.||ITR – 6 – All companies except those that claim tax exemption as per Section 11.|
|ITR – 3 – For individuals and HUF with income from profits of a business or profession.||ITR – 7 – Persons incl. companies required to furnish returns under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.|
|ITR – 4 (Sugam) – For Individuals, HUFs and Firms (other than LLP) having presumptive business income tax returns. This is computed under sections 44AD, 44ADA or 44AE.|
Benefits of Filing Income Tax Returns
Many investors have very low or zero tax liability and therefore this section does not have to file returns mandatorily. Even though they have some sort of income occurring.
And there is another section that only file returns when something urgent requirement comes up asking for their last few years of ITR. They approach a nearby CA and file their old tax returns.
There has been low-Income Tax filing Compliance in India. However, in recent years, the Govt. of India has taken some stringent measures to enforce the Income Tax Law by linking various benefits for prompt tax filers.
Advantages of tax filing are, but not limited to:
Processing of Loans & Visa: If you apply for any loans such as a home loan, car loan, etc., the eligibility and quantum of loan would depend on your income. This can be established through filed ITRs. ITR will help your lender to assess your repayment capacity.
If you plan to travel overseas, proof of earning is required. If you are salaried then a certificate from the employer will work. But if you are self-employed then income proof & details need to be submitted.
Claiming Refund: There could be some TDS cut on some investment. And you will have to file the ITR to claim a refund of the same. Or you may have paid excess tax on your income. To get this refund, you must file ITR.
Many salaried individuals don’t file ITR as they think that the tax on their income has already been deducted and they have Form 16. But your employer may have paid more tax on your behalf. Not taking into consideration your actual house rent, children’s school fees, tax-saving investments or insurances. So, the filing of ITR will enable you to get a refund from the IT department.
Carry-forward Losses: As per Income tax rules, losses are allowed to be carried forward and set off against capital gains. But this applies only to those individuals who file ITR in the relevant assessment year. If you have incurred losses for a year and you have earned below the exemption limit. You must file your returns to be able to carry forward the losses you have incurred. And it gets balanced against future gains and income.
The capital losses can be carried forward for 8 consecutive years, as per the IT Act.
Establishing Income in Compensation Cases: Although the Motor Vehicles Act does not make it compulsory to present the ITR while calculating the compensation in case of accidental death or disability, the procedures approved by Delhi High Court mention the need for ITR for self-employed persons.
This helps to establish the income of the person to arrive at appropriate compensation.
Self-Employed Individual Filing for Tenders: Businessmen, consultants, and partners do not get any Form 16. For such self-employed individuals, ITR receipts become an important document. ITR is the only proof of income and tax payment for them, in all sorts of financial transactions. And if they want to take up some contract or tender, they may be asked to show their tax return receipts of the previous 3 to 5 years.
Being a Responsible Citizen: Staying on the right side of law helps. Similarly, keeping the income tax department informed about your income and taxability helps too. This is only possible when you file your ITR. Those who earn less than the prescribed slab of income can file returns voluntarily. Filing returns are a sign that you are a responsible taxpayer.
Different penalties have been directed for various defaults committed by the taxpayer, under the Income Tax Act. Some of them are mandatory and a few are at the consideration of the tax authorities. Given below are the provisions relating to various penalties leviable.
In case an incorrect form has been used to file the returns, then it will be treated as “defective” and the assessee will be asked to file a revised ITR using the correct form.
Now, the taxpayer gets some time to amend the mistake. And the return must be filed within 15 days from the date of receipt of the intimation, as per Section 139(9). This time limit may be extended by the assessing officer (AO) on an application by the assessee. If the defect is not corrected within the stipulated time, then it will be treated as an invalid return. That is the same as not filing a return at all.
Therefore, the person will be facing all the penalties prescribed to not filing ITR. As well as, interest will get charged, u/s 234A, for the delay.
If it is found that the actual income exceeds the income declared by the person. Or when no return has been filed despite income exceeding the basic exemption limit. Penalty at 50% of tax payable on such under-reported income shall be payable.
200% of the tax will get if under-reporting results from misreporting of income.
As per Section 234F of the Income Tax Act, if you file after 31st July (it was extended to 31st August for AY 2019-2020) but before December, a penalty of Rs. 5000 will be levied. For returns filed after December, the penalty will be Rs. 10,000.
However, to provide relief to small taxpayers, the IT department has stated a maximum penalty of only Rs. 1,000 will get levied. The condition is that your total income is less than Rs 5 lakh.
Penalty for Default
In case a demand notice u/s 156, has been issued to the taxpayer for payment of tax (other than notice for payment of advance tax). Then such amount, as per section 220(1), shall be paid within 30 days of the service of the notice at the place and to the person mentioned in the notice. If the taxpayer defaults in payment of any tax due, then apart from other penal provisions, he is treated as an assessee in default. For an assessee in default, the penalty will get levied as decided by the AO. However, the penalty cannot exceed the amount of arrears in tax.
Before penalizing, the taxpayer is given a reasonable opportunity of being heard. No penalty is levied if the taxpayer can prove that the default due to a good and sufficient reason.
Delay in filing the TDS/TCS statement
Every person liable to deduct tax at source is liable to furnish the statement of TDS, as per Section 200(3). It is termed as TDS Return. And every person liable to collect tax at source, as per Section 206C (3), has to file a statement in respect of TCS, i.e. TCS Return.
If a person fails to file the TDS/TCS return on or before the due date prescribed, then he shall be liable to pay, by way of fee, a sum of Rs. 200 for every day of the delay, as per Section 234E. This amount, however, shall not exceed the amount of TDS/TCS. A late TDS/TCS return cannot be filed this late fee.
Penalty in case of income from undisclosed sources
The AO may make an addition to the income of a taxpayer as per Section 68, 69, 69A, 69B, 69C or 69D if the explanation about the nature and source of his income is not satisfactory.
The AO is empowered to levy penalty at the rate of 10% of the tax payable if any addition is made. However, no penalty shall be levied if this income has been disclosed in the ITR and tax paid, u/s 115BBE, on or before the end of the relevant previous year.
Fee for default in furnishing return of income
The taxpayer, who is required to furnish ITR u/s 139 failed to furnish return of income within due date as prescribed under section 139(1) then as per section 234F, he will be liable to pay penalty same as delayed filing.
- 5000 if ITR is filed on or before 31 December of the assessment year.
- 10,000 in any other case.
However, if the total income of the person is less than Rs. 5 lakh then the fee payable shall be Rs. 1000.
Common Mistakes While Filing ITR
Listed below are some of the most common tax filing mistakes you can avoid.
Selecting an Incorrect Form
The appropriate ITR form for filing of returns must be selected. Failure can result in your return not getting processed by the income tax department.
Which form is to be selected depends on the sources from which income is earned in the financial year and the category.
All incomes that are taxable and/or tax-exempt are to be reported using the correct ITR form applicable. If the ITR is filed in the wrong type of Form, then the return will be termed as “defective”. Then, you will have to file a revised return using the correct form, within a certain time frame.
By using LegalRaasta e-filing platform, where the selection of form is done technically, you do not have to worry about choosing the right form.
Not reporting all sources of income
A common mistake taxpayers make is failing to disclose all the sources of their income. The income must be disclosed whether it is taxable or exempt.
All incomes, not only the primary one earned from employment, profession or business, are to be reported. Whether they are savings account interest, fixed deposit interest, rental income from house property, income from short-term capital gains and any other source.
Remember, any income earned by a minor from interests, investments, etc. is taxable for the parent. According to the tax slab, an exemption up to Rs. 1,500 u/s 10(32) can be claimed when minor’s income gets clubbed with the parents.
Not reporting such incomes might attract a notice from the income tax department.
If you have switched jobs, make sure you report the income earned through your previous employer also. Not reporting such incomes might attract notice from the income tax department.
Providing incorrect personal information
Because all information will get recorded in the Department’s databank and may be verified, it is extremely important to enter the personal details correctly before filing your taxes. PAN number, name, address, mail id, phone number, date of birth, bank account number, IFS Code, etc. must be accurately mentioned. A minor mistake in these details means that you may miss your refund claim or some other important notifications. So check and re-check before filing.
Failure to Reconcile TDS with Form 26AS
It is important to compare ITR with Form 26AS before filing. Form 26AS includes all the income details, Tax Deducted at Source (TDS), advance tax paid by you, self-assessment tax, etc. TDS may have been deducted from your salary. You must verify the details of Form 16, issued by the employer, with the Form 26AS.
If the TDS is not reflected in Form 26As, your refund and tax deduction credit will be lost. The mismatched would lead to more tax being paid.
Not including exempt income
Income tax laws require all income to be reported, whether exempt or not. Many types of incomes are exempt from tax. For example, long-term gains, dividends, etc. Although you do not have to pay any taxes on them, you still need to report them.
Also, though your gross total income may not exceed the basic exemption limit, you are to file ITR in certain situations.
Entering the details manually
There is a set format for filing returns. All details are to be entered in a particular format, in the rows and columns provided. If incorrectly put in this complicated format, the returns will have errors. This is where taking professional assistance from LegalRaasta is recommended.
TDS paid then no need to file ITR
Employers are required to deduct tax at source from salary, and interest income respectively. It is mandatory to file an income tax return when your annual income exceeds Rs. 2.5 lakh. And report the interest income in those returns. You should disclose the income on which tax has been deducted and claim credit for TDS in the income tax return.
The interest on deposits with banks is provided after deducting a flat tax rate of 10%. You can claim a deduction under section 80TTA up to Rs 10,000 for interest earned on your deposits. For senior citizens, a deduction of interest up to Rs 50,000, can be claimed u/s 80TTB.
Missing out on the Deductions that can be claimed
A deduction of up to. Rs 1.5 lakh in a financial year by investing in certain funds and schemes. But how much can be claimed from these schemes is complex. Similarly, most taxpayers are not aware of some expenses that are eligible as deductions.
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What is Form 16?
Form 16 can be termed as Salary TDS (Tax Deducted at Source) Certificate that an employer issue to you for the TDS deducted. Form 16 is an Income tax form, used by the companies to provide their salaried employee’s information on the tax deducted.
As soon as the income from your salary for the financial year exceeds the basic exemption limit, the employer is required to deduct TDS. The deducted amount is to be deposited to the Government.
After deducting TDS from the salary, the employer is required to give a certificate to the employee consisting of the details. This certificate is known as Form 16.
It consists of two parts i.e. Part A and Part B. Part A consists of details about the employer & employee, name and address, PAN and TAN details, TDS deducted & deposited, etc. And Part B consists of details related to other income, deductions allowed, etc.
- If no TDS has been deducted, you may not be issued Form-16.
- The employees need this at the time of filing for tax returns.
- You can directly upload your Form 16 and file your income tax return quickly.
- Form 16 is annually issued by the employer by June 15th.
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Frequently Asked Questions
About Income Tax Returns
1. Individual – Salaried, Self-employed or Professional,
2. Hindu Undivided Family (HUF)
5. Association of Persons (AOP)
6. Local Authority
7. Artificial Juridical Person
8. Body of Individuals (BOI)
9. Political Party,
10. Educational or medical institution,
11. Trade Union, etc.
(a)Earn gross annual income (before deductions u/s 80C to 80U) more than-
1. Rs. 2.5 Lakhs – For individuals below 60 years,
2. Rs. 3 Lakhs – For individuals above 60 years but below 80 years,
3. Rs. 5 Lakhs – For individuals above 80 years,
(b) Earn income other than salary like house property, etc.,
(c) Want to claim an income tax refund of taxes already paid. Such as TDS, Advance Tax, etc.,
(d) Earn from or have invested in foreign assets,
(e) Looking to apply for visa or loan applications,
(f) Company or a firm, irrespective of profit or loss,
(g) Having Bank Deposits of over Rs. 1 crore,
(h) Bought foreign exchange of more than Rs. 2 lakh,
(i) Paid an electricity bill of more than Rs. 1 lakh.
For calculating income tax, slab rates are applied to the taxable income earned during the previous year. These slabs are notified in the budget at the end of each financial year. The income is calculated under various heads of Income and added. Next, deductions and/or exemptions available under Chapter VI-A, are deducted to get the Net Income Chargeable to Tax.
You just need Form – 16, if you are a salaried individual. No other document, like TDS certificate, proof of investment, needs to accompany your ITR. Still, you must keep them handy, as you may need to submit to authorities if they ask for it.
When you don’t get Form-16, given below is a list of documents that you may have:
(a) Copy of the previous year’s tax return (to declare any losses or other details),
(b) Your Bank statements (for the interest paid to your loans, balances, etc.),
(c) Your TDS certificates (to include taxes that have already been paid),
(d) Your Savings Certificates, Deductions, Donations, etc. (to include deductions),
(e) Certificates of Disability in your family (for deductions),
(f) An Interest statement that shows the interest paid to you, (possibly from Bank and/or Post Office),
(f) If having business income/loss, have balance sheets, Profit & Loss account statements, and other requisite Audit Reports.
Previous Year is the same as the Financial Year in which the income is earned. Tax is payable on the income earned during this Previous Year. And this tax is payable in Assessment Year, which is the year next to the Financial or Previous Year. For example, for the Income earned in Financial Year (Previous Year) April 1, 2019, to March 31, 2020, the liability to pay tax will fall in 2020-2021, known as the Assessment Year.
You can pay by either cash/cheque in any designated bank branch or online on the NSDL website. Payment is to be made in Challan-280 in both cases. The Challan must be filed accurately for further processing.
It is important to file Income Tax Returns within the stipulated time.
Yes. If some exemptions or deductions got left out from Form-16, you can claim the same in ITR. Various deductions u/s 80 such as ELSS, PPF, Life and health insurance, NSC, Children tuition fees, 5-year fixed deposits, donation for charity, repayment of home loan, or even HRA can be claimed.
The return can be filed both physically & electronically. For e-filing download the government utility from the Income Tax portal (in excel format or java utility). Complete all the fields with the information required. Pay the taxes due and generate the XML. You can upload this XML on the government portal by logging into your account. Once the XML has been uploaded, download the acknowledgment in ITR-V. This ITR-V can be verified, either by using EVC code or can be couriered to CPC Bangalore for further processing.
• If any of the schedules do not apply to you, you are to write —NA— across it.
• Indicate nil figures by “Nil”.
• Put a “-” sign before negative figures.
• All figures are to be rounded off to the nearest Rupee except figures for total income/loss and tax payable. Those are to be rounded off to the nearest multiple of Ten Rupee.
It shows how much tax has been received by the government by way of TDS deposited by the deductor (employer, bank), advance tax or any self-assessment tax that has been paid, etc. It also contains the details of income tax refunds that you might have received. It also shows AIR (Annual Information Return) transaction details, which might have been filed by your bank in case you have entered into some specified transaction.
You must match tax payments and TDS deducted with 26AS before filing your ITR to get a tax credit as the tax credit is given only on the items appearing in our 26AS.
Types of Income Tax Return Forms
• Income from Salary,
• Profit or Loss from a Single House Property (provided no loss was brought forward or is to be carried forward),
• Other Income (excluding Winning from Lottery or owning & maintaining Race Horses),
• Exempt Income (such as Agricultural Income up to Rs. 5000),
• Total Income combining all the above-mentioned sources does not exceed Rs. 50 lakh.
Taxpayers have to report the gross salary under “Income from Salary”. That is the salary, perks, and profits instead of salary.
The exempt allowances have to be disclosed “Allowance”-wise and deducted from gross salary. For instance, a part of the HRA has been claimed as exempt, that amount should be reported separately. For income earned from other sources, the assessee, also, has to provide a detailed break-up of incomes. For example, Interest earned from savings or fixed deposits, etc.
In case of clubbed income, when the income of another person (spouse or minor child, etc.) is to be clubbed, this Return Form can be used only if the total income falls into the above income categories.
(a)Total income more than Rs. 50 lakh,
(b)Agricultural income over Rs. 5000,
(c)Taxable capital gains,
(d)Income from business or profession,
(e)Income from more than one house property,
(f)You are a Director in a company,
(g)You held investments in unlisted equity shares at any time during the financial year,
(h)Own assets or financial interest in any entity outside India,
(i)For Resident of India (ROI), with foreign assets or foreign income (including signing authority in any foreign account),
(j)You are a Resident Not Ordinarily Resident (RNOR) or Non-Resident Indian (NRI),
Have foreign assets or foreign income,
(k)If you are assessable in respect of income of another person in respect of which tax is deducted in the hands of the other person,
(l)Income taxable at special rates under Section 115BBDA or Section 115BBE,
(m)Income to be apportioned as per the provisions of Section 5A,
(n)Any claim of relief u/s 90 and/or 91,
(o)Any claim of deduction u/s 57, other than deduction relating to family pension,
(p)Claim of credit of TDS in the hands of any other person.
ITR-1 has 4 parts:
Part A has Personal Details,
Part B is about Gross Total Income,
Part C has Deductions and Taxable Total Income,
Part D has Tax Computation and Tax Status,
Schedule IT contains details of Advance Tax and Self-Assessment Tax Payments,
Schedule TDS gives details of Tax Deducted at Source.
The ITR-1 cannot be used if you are claiming double taxation relief under Section 90/90A/91.
1. Form – 16: Issued by all your employers for the given Financial Year,
2. Form 26AS: Remember to verify that the TDS mentioned in Form 16 matches the TDS in Part A of your Form 26AS,
3. Receipts: If you have not been able to submit proof of certain exemptions or deductions (such as HRA allowance or Section 80C or 80D deductions) to your employer on time, keep these receipts with you to claim them on your income tax return directly,
4. PAN card,
5. Bank investment certificates: Interest from bank account details – bank passbook or FD certificate.
(1)Income from more than one House Property,
(2)Capital Gains/loss on the sale of investments/property (Both Short Term and Long Term),
Income from Other Sources (including Winning from Lottery, bets on Race Horses and other legal means of gambling),
(3)Foreign Assets/Foreign Income,
(4)Agricultural income of more than Rs. 5000,
(5)Resident not ordinarily resident (RONR) and a Non-resident (NRI),
(6)A Director of listed and unlisted companies.
ITR-2 form can also not be filed by a company or LLP or other types of legal entities.
The ITR-2 Form is also not to be used if you are claiming double taxation relief u/s 90/90A/91.
a)Part A: General Information.
b)Part B-TI: Computation of Total Income.
c)Part B-TTI: Computation of tax liability on total income.
d)Details to be filled if the return has been prepared by a Tax Return Preparing Agent.
e)Schedule S: Details of income from salary/salaries.
f)Schedule HP: Details of income from House Property(s).
g)Schedule CG: Computation of income under Capital gains.
h)Schedule OS: Computation of Income from other sources.
i)Schedule CYLA: Statement of income after setting off of the current year’s losses.
j)Schedule BFLA: Statement of income after setting off of unabsorbed loss brought forward from earlier years.
k)Schedule CFL: Statement of losses to be carried forward to the future year.
l)Schedule VIA: Statement of deductions (from total income) under Chapter VIA.
m)Schedule 80G: Statement of donations entitled for deduction under section 80G.
n)Schedule 80GGA: Statement of donations for scientific research or rural development.
o)Schedule AMT: Computation of Alternate Minimum Tax payable under section 115JC.
p)Schedule AMTC: Computation of Tax Credit u/s 115JD.
q)Schedule SPI: Statement of income of spouse/minor child/son’s wife or any other person or association of persons to be included in the income of the assessee in Schedules-HP, CG and OS.
r)Schedule SI: Statement of income which is chargeable to tax at special rates.
s)Schedule EI: Exempt Income Details.
t)Schedule PTI: Pass-through income details from business trust or investment fund in Section 115UA, 115UB
u)Schedule FSI: Statement of income accruing or arising from outside India.
v)Schedule TR: Details of Taxes paid outside India.
w)Schedule FA: Details of Foreign Assets and income from any source outside India.
x)Schedule 5A: Statement of apportionment of income between spouses governed by Portuguese Civil Code.
y)Schedule AL: Asset and liability at the year-end (applicable in case income exceeds Rs. 50 lakhs).
1)The Directors have to disclose information on their Directorships in various companies and details of their investment in unlisted equity shares.
2)The specifications of the amounts falling under salary, perks, and profits other than salary have to be mentioned therein. Taxpayers would be able to draw this information from the annexure to Form-16 provided by the employer.
3)The employee earning income from more than one employer during a financial year has to provide the complete salary details (salary, perks, and profits) for each employer.
4)While disclosing “Residential Status”, the taxpayer has to furnish the details of days of stay in India in the previous year, during the previous 4 years, etc. For NRIs, additional details need to be furnished concerning details of the jurisdiction of residence outside India and taxpayer identification numbers of such a country.
Part A-Gen: General Information of taxpayer & business.
Part A-BS: Balance Sheet of the business or profession for the FY.
Part A-P&L: Profit and Loss statement of the business for the FY.
Part A-OI: Other Information.
Part A-QD: Quantitative Details.
Part B: Outline of the total income and tax computation on the net income chargeable.
Tax Payments: Details of advance tax, TDS, etc.
ITR-4 can be filed by a resident Indian or HUF or a resident firm (other than LLP) if the total income comprises of any of the following components:
1. Presumptive Income computed as per Sections 44AD, 44ADA and 44AE,
2. Salary or pension,
3. Income from single house property (provided there is no brought forward loss or loss to be carried forward),
4. Income from other sources (including winnings or loss from lottery and racehorses, other than income chargeable at special rates, and including family pension)
5. In the case of clubbed income, i.e., the income of another person (spouse, minor child, etc.) is to be clubbed with the income of the taxpayer. Returns in ITR-4 can be filed only when such income falls in any of the above categories.
1. The total income that has been generated is more Rs.50 lakh.
2. If any losses have been brought forward from previous years.
3. In case the individual has a signing authority at any place outside India.
4. If any investments are present in equity shares that are unlisted at any time during the FY.
5. Limited Liability Partnerships (LLPs) cannot opt for this.
6. For individuals having foreign assets or have generated a foreign income.
7. If the income has been generated from more than one house property.
8. For the Director of a company.
9. In case the individual is an NRI or an RNOR.
10. He has any income to be apportioned following Section 5A.
11. Income from business or profession other than the income from the presumptive taxation scheme.
12. Capital gains/losses on the sale of investment/ property,
13. He is assessable for the complete or part of the income on which TDS has been deducted in the hands of the person other than the assessee.
14. Dividend income exceeding Rs. 10 lakhs taxable under Section 115BBDA.
15. Assessee has any unexplained income (i.e. cash credit, unexplained investment, etc.) taxable at 60% u/s 115BBE.
16. Income under the head “income from other sources” of which the assessee has claimed exemption u/s 57.
17. Deduction has been claimed u/s 80QQB or 80RRB in respect of royalty from patent or books.
18. Deduction has been claimed u/s 10AA or Part-C of Chapter VI-A.
19. If an individual is taxable in respect of an income but TDS for such income has been deducted by any other person (i.e., clubbing of income, Portuguese Civil Code, etc.).
20. Assessee is Claiming relief of tax u/s 90, 90A or 91.
1. Section 44AD: For small taxpayers engaged in business other than the business of plying, hiring or leasing goods carriages.
2. Section 44ADA: For small taxpayers having income from profession.
3. Section 44AE: For small taxpayers engaged in the business of plying, hiring or leasing goods carriages.
A person adopting this scheme can declare income at a prescribed rate and is relieved from the complicated job of maintenance of books of account.
The individual availing this scheme will be able to declare the total taxable income at a predefined rate.
3)Resident Partnership Firm (excluding LLP),
And the person who has claimed for any deductions u/s 10A/10AA/10B/10BA or u/s 80HH to 80RRB in the FY.
3) Engineering or architectural,
5) Technical consultancy,
6) Interior decoration,
7) Any other profession as notified by CBDT.
2. Limited Liability Partnerships (LLPs),
3. Body of Individuals (BOIs),
4. Association of Persons (AOPs),
5. Co-operative Societies,
6. Artificial Judicial Persons,
7. Local Authorities.
a) Assessees who are required to file the return of income u/s 139(4A) or 139(4B) or 139(4C) or 139(4D) (i.e., Trusts, Political party, Institutions, Colleges, etc.)
b) Individuals, HUFs (Hindu Undivided Families), Companies.
1. Individuals, Hindu Undivided Family (HUF), Firm, Association of Person (AOP), Body of Individuals (BOI), Local Authority and Artificial Judiciary Person,
2. Companies claiming an exemption u/s 11, who have Income from property held for charitable or religious purposes.
ITR-7 is a form filed by those individuals and associations that fall under:
1. Section 139 (4A)
2. Section 139 (4B)
3. Section 139 (4C)
4. Section 139 (4D)
The following individuals and companies are eligible to file the ITR-7 form:
a) Who obtain income from property if the said property is in the name of a trust,
b) All individuals receiving income for the sole purpose of charity or religious offering,
c) Any political party earning a net income which is more than the ceiling limit that is exempt from income tax,
d) Associations carrying out scientific research,
e) News organizations and companies,
f) Organizations mentioned in Section 10(23A) and Section 10(23B),
g) Educational institutions like school, colleges or universities,
h) Medical institutions such as clinics, hospitals, etc.
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