Thursday, September 17, 2015

how to fill the itr


If you earn above Rs 5 lakh, you have to file returns electronically this year. That means you can file your returns even in the last two days from your home computer. You can seek the help of a professional or do it yourself by using the official website of the Income-Tax department or a host of private websites.
Before we proceed to how to use these portals effectively , let us address a major source of ambiguity this year regarding the applicability of forms ITR-1 and ITR-2 to salaried individuals or pensioners with one house property and interest income. Tax consultants are divided on the interpretation of new provision on exempt income , introduced this year.
According to this provision, those with exempt income exceeding Rs 5,000 cannot file their return using ITR-1 (Sahaj). While some feel that all salaried individuals who have tax-exempt income like House Rent Allowance (HRA), Leave Travel Allowance (LTA) and transport allowance have to use ITR-2 this year, others argue that they can continue to use the much simpler ITR-1 (Sahaj).
"My view is that the exempt income here refers to sources like dividends and not tax-free salary components like HRA and conveyance allowance," explains Divya Baweja, senior director at Deloitte in India. The Income-Tax department is yet to issue a clarification on the matter.
Using the official website
Before you start the process, keep your bank statements, Form 16 issued by your employer and a copy of last year's return at hand. Next, log on to www.incometaxindiaefiling .gov.in. Follow these steps:
Step1: Register yourself on the website. Your Permanent Account Number (PAN) will be your user ID.
Step2:View your tax credit statement — Form 26AS — for the financial year 2012-13 . The statement will reflect the taxes deducted by your employer actually deposited with the I-T department. The TDS as per your Form 16 must tally with the figures in Form 26AS. If you file the return despite discrepancies, if any, you could get a notice from the I-T department later.
Step 3: Under the 'Download' menu, click on Income Tax Return Forms and choose AY 2013-14 (for financial year 2012-13 ). Download the Income Tax Return (ITR) form applicable to you. If your exempt income exceeds Rs 5,000, the appropriate form will be ITR-2 . If the applicable form is ITR-1 or ITR 4S, you can complete the process on the portal itself, by using the 'Quick e-file ITR' link.
Step 4: Open the downloaded Return Preparation Software (excel utility) and complete the form by entering all the details , using your Form 16.
Step 5: Ascertain the tax payable by clicking the 'Calculate Tax' tab. Pay tax (if applicable) and enter the challan details in the tax return.
Step 6: Confirm all the information in the worksheet by clicking the 'Validate' tab.
Step 7: Proceed to generate an XML file and save it on your computer.
Step 8: Go to 'Upload Return' on the portal's left panel and upload the saved XML file after selecting 'AY 2013-2014 ' and the relevant form. You will be asked whether you wish to digitally sign the file. If you have obtained a DS (digital signature), select Yes. Or, choose 'No'.
Step 9: Once the website flashes the message about successful e-filing on your screen, you can consider the process to be complete. The acknowledgment form — ITR—Verification (ITR-V ) will be generated and you can download it.
Step 10: Take a printout of the form ITR-V , sign it preferably in blue ink, and send it only by ordinary or Speed post to the Income-Tax Department-CPC , Post Bag No-1 , Electronic City Post Office, Bangalore - 560 100, Karnataka, within 120 days of filing your return online.
Through private portals
As mentioned earlier, you can use the services of several websites to file their returns online. Typically, these portals charge a fee depending on the service level on offer. The basic variant typically costs around Rs 250-300.
"There are two ways in which a return can be filed through our website. Users can either prepare and file income-tax return on their own or avail of assisted filing service. In case of the latter, a chartered accountant will interact with them and also prepare and file their return," explains Saakar Yadav, director of myITreturn.com. Unlike the official website, the steps to file returns via these portals are not uniform








Income Tax


Filling Income Tax Return

Filling ITR1 Form & ITR2

Note while filing

Income Tax For Employee

TDS

House Property

Capital Gains

Basics of  Income Tax Return

Senior Citizen and Tax

Paying Challan 280

After Filing Income Tax Return

Saving Taxes






      Every tax payer is required to declare to the Income tax Department of the Government of India, summary of income, tax paid which he earned during the year(between April to Mar of next year) n a form prescribed by the Government something like report card in school. The form which one needs to fill in is calledIncome Tax Return.There are many ITR forms for filing an income tax return such as : ITR-1 (Sahaj) ,ITR-2 ,ITR-3, ITR-4 and ITR-4S( Sugam), ITR-5 and ITR-6. These forms are released every year by Income Tax Department.  To file Income tax returns one needs to fill the appropriate Income Tax return form. But which form to fill? This article explains different kinds of income tax return form,why there are so many forms and which one to fill.
  
    Different Types of Income
I   ncome Tax Return Form is based on the types of income earned. Income Tax Department classifies income into different types  given below :
  1. Income from Salary : Income can be charged under this head only if there is/was an employer-employee relationship between the payer and payee. The aggregate of  income, after exemptions available, is known as Gross Salary and this is charged under the head income from salary. Pensions is also taxed under the head Salaries.
  2. Income from House Property : Any residential or commercial property that you own will be taxed, even if it is not let out, it will be considered earning rental income and you will need to pay tax on it. Rental income is taxed subject to some exemptions for example on Home Loan.
  3. Income from Profits and Gains of Business or Profession : Income earned through business or profession (ex professional working as freelancer) is charged under this category. The income chargeable to tax is the difference between the credits received on running the business and expenses incurred taking into account deductions such as depreciation of assets, rent, travelling.
  4. Income from Capital Gains : Any profit or gain arising from transfer of capital asset( such as property,equity or stock market,gold) held as investments are chargeable to tax under the head capital gains. The gain can be on account or short- and long-term gains based on kind of asset and time for which it is held. Our article Basics of Capital Gains discusses it in detail.
  5. Income from other Sources :  Any income that does not fall under any of the four heads of income above is taxed under the head income from other sources. Such as interest income from bank deposits, winning from game shows or lottery, gift from person other than relative
       One may have 3-4 sources of income under one particular head or type. For example a person might have two businesses A and B. But both are taxable under the same head business and profession. Income Tax FAQ answers various questions on income tax and return.
       Types of documents needed for different type of income is shown in picture below :
Document proof for different types of income
Document proof for different types of income

      Loss from earlier years

        Income tax return also differs on whether they allow one to include loss filed in earlier years. It is also possible for one to have a loss of income or negative income such as  Income from House Property,Income from Business and Profession, Capital gains. If you have sustained a loss in the financial year, then Income tax laws allow you to carry forward to the subsequent years for adjustment against its positive income. But you must make a claim of loss by filing your return before the due date.  The tax loss carry forward reduces the overall tax liability during the earlier year(s) by incorporating the earlier loss as a reduction to taxable income. Our article Basics of Capital Gains,Capital Loss on Sale of House  discusses it in detail.
     Example of negative income or loss:
  • The income from a self-occupied property will always be zero or negative (to the extent of interest paid or the specified limit, whichever is lower). As calculating income from house property for a self-occupied property, one has to take rental income as zero,one does not get credit for any municipal taxes paid nor will there be any standard deduction. But yes, you can deduct the interest paid on the loan availed subject to a specified limit(1,50,000 per owner)
  • Mr. Mehta bought a house worth Rs 10 lakh (10,00,000) in Financial Year 2007-08. He sells the house in Jul 2012-13 for Rs 15 lakh( 15,00,000). Using the Cost Inflation Indexation(CII) figures for the financial year 2007-2008 and 2012-13 he finds that his purchase Indexed Cost is 15,46,279.49 and he has a loss between sale and indexed purchase price of  -46,279.49

     Income Tax Return (ITR) Forms

       There are various ITR forms such as  : ITR-1 (Sahaj) ,ITR-2 ,ITR-3, ITR-4 and ITR-4S( Sugam). ITR-5 and ITR-6 which differ in information required and hence number of pages.
  • There are different Income Tax returns form based on
    • Who has to fill (individual, Hindu Undivided Family(HUF), Business etc). Fourth Character in PAN specifies the type of tax-payer. For Individual’s it’s P , HUF it’s H, Firms F etc. 
    • Whether a resident of India or not Our article Non Resident Indian – NRI explains who is NRI?
    • On types of Income earned ex: Income from Capital Gains or Income from House Property.
    • On whether losses are carried forward or not.
  • These forms are released every year by Income Tax Department as there are some modifications in income tax law in the budget or Finance Bill ex: exemption limit is modified, new tax saving option is introduced (80TTA for AY 2013-14), some tax saving option is removed (80CCC in AY 2012-13).
  • To e-file the returns one needs to fill in the Excel utility provided by the income tax department which provides information in the appropriate form in excel format. Our article E-Filing of Income Tax Return covers e-filing in detail.  If income exceeds Rs. 5 lakhs one would be required to furnish the Return for the Assessment Year 2013-14 electronically
  • Forms for the Financial Year 2012-13(assessment year 2013-14) can be downloaded from Income tax website(http://incometaxindia.gov.in/) Downloads->Income Tax returns ( http://incometaxindia.gov.in/download_all.asp). Income Tax’s Download  also providesinstructions in Hindi and English with forms. It also has forms for earlier Assessment Year.
      Use the right form and right Assessment Year. For the income earned between 1 Apr 2012 to 31 Mar 2013 the Assessment Year is 2013-14 (At times people say Financial Year 2012-13) and income tax return by individual must be filed before 31st Jul 2013.
      Details of forms for individuals and Hindu Undivided Family (HUF) are given below. If any income of spouse, minor child, etc. gets clubbed with the income of the assessee, then clubbed income is first categorised into different heads of income and then clubbed. Our article Clubbing of Income covers it in detail.
      Form   Category        Details
       ITR-1 SAHAJIndividual1. Income from salary/pension: or
2. Income from one house property
3. Income from other sources( excluding winnings from lottery and income from races horses)

 
       ITR 2A		Individual/HUF   Newly introduced Form applicable from AY 2015-16.1. Income from salary/pension
2. Income from more than 1 house properties
3. Income from other sources( excluding winnings from lottery and income from races horses)
      ITR-2Individual/HUF1. Income from salary/pension 2. Income from house property(s) 3. Income from other sources( excluding winnings from lottery and income from races horses)
4.Income from Capital Gains. 5. Income from foreign assets.
They should not have Income from Business or Profession.
         ITR-3Individual/HUFBeing partners in firms and not carrying out business or profession under any proprietorship.
         ITR-4S                                                                                SUGAMIndividual/HUFIt is applicable for small businessmen and professionals from business or profession and gross receipts upto Rs. 60 lacs a year
         ITR-4Individual/HUFhaving income from business or profession (such as insurance agent, doctor, CA, lawyer etc.) with gross receipts of more than RS. 60 lacs a year
        Which form to choose is shown in the picture, from Economic Times Choose the correct form to file your income tax return ,below :
Which ITR to file
Which ITR to file

         

             Scope of ITR1 (Sahaj) reduced in AY 2013-14 but restored in AY 2015-16

        ITR-1 (Saral) can now be filed by individuals even if they have exempt income. Earlier, individuals were  not allowed to use this form if they had exempt income exceeding Rs 5,000. However, individuals having  agricultural income exceeding Rs 5,000 will still not be able to use Form ITR-1.
      Scope of ITR-1 (Sahaj) form has been reduced in AY 2013-14 significantly .Quoting from Simple Tax   India’s article Who can use sahaj itr-1 who cannot use Two restriction added are:
  • One who have negative income under head Income from other sources can not use this form
  • If  one’s exempted income is more than 5,000 then that assessee can not use Sahaj (ITR-1) 
    • Salaried person getting transport allowance which is exempted 800 per month (more than 5000) can not use ITR-1. (Not confirmed)
    • Salaried person getting HRA exemption (more than 5000) are also not eligible. (Not confirmed)
    • Other allowances which are exempted also not eligible.
    • If one has received maturity amount of insurance ,exempted at the time of receipt, more than Rs 5,000 also not eligible
                                    Picture given below shows What is Exempt Income?
What is Exempt Income
What is Exempt Income 
           As there are so many instances where exempted income is more than 5000 , so those who have used      ITR-1 earlier  will not be able to use this form. 

                                 ITR 2A added for FY 2014-15 or AY 2015-16

        A new three-page ITR 2A form has been introduced for individuals and HUFs who may own more than  one property, but do not have any taxable capital gains, income from business or profession or foreign     asset and income outside India.

            Recommended :  MoneyControl’s Tax amendments to file Income-Tax return for AY 2013-14, Income         Tax FAQ
          Related Articles:
        The process of filing Tax Returns in India involves the use of various forms for different categories    of Assessee, Incomes etc. Choose the appropriate form.
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LUCENT QUICK REVISION WITH 500 BACK TO BACK REVISION

              LUCENT QUICK REVISION WITH 500 BACK TO BACK REVISION