Tax deducted at source(TDS) is basically a system where tax is deducted as per the provisions of Income Tax Act 1961 at the point of generation of income. A TDS Return is a quarterly statement which has to be submitted to the income tax department of India. It is compulsory to be filed on time.
Who should file a TDS return?
It is the duty of every person who is making payment for specified goods and services to deduct TDS and file TDS return. The specified payment includes commission, salary, interest, professional fees, brokerage, royalty, contract payments etc. The person whose tax is being deducted is called ‘deductee’ and the person who deducts TDS is called ‘deductor’.
Benefits of filing TDS return
Some of the benefits are as follows:
Assists in regular collections of taxes
Ensures to the government a regular flow of income
Reduces the burden of paying a heavy tax
Eligibility criteria for TDS return
TDS return can be filed by organizations or employers who avail a valid TAN (Tax Collection and Deduction Account Number). Any person making specified payment as mentioned under Income Tax – IT Act are required to deduct tax at source and needs to deposit the same within the prescribed time for following payments.
Payment of salary
Payment by way of winning puzzles, lotteries etc.
Income by way of winning horse races
Insurance commission
Payment as per National Saving Scheme and other schemes.
Types of TDS Returns
The different types of TDS are as follows:
Form 24Q- The TDS deducted on salaries
Form 26Q – The TDS deducted on payments other than salaries
Form 27Q- The TDS deducted on payments made to Non- Residents
TAN (tax deduction and collection account number) is a 10-digit alphanumeric number which is required by a person who is liable to deduct TDS and file TDS return. This number is provided so that it can be mentioned in all TDS Certificates issued, returns, challans etc. If a person does not apply for TAN, he may be penalised up to Rs. 10000.
Who is required to issue TDS certificates?
Every person who is deducting tax as per provisions of section 203 is required to issue a TDS certificate. Even banks and other such organizations deducting TDS on pensions issue TDS certificates.
Penalty, in case of delay in filing TDS return
According to section 234E, a penalty of Rs 200/- per day shall be paid by the person until the time default continues. It is to be noted that the total penalty should not exceed the TDS amount.
Penalty for non-filing of TDS return
If the return is not filed within 1 year from the due date or if incorrect information has been furnished it shall be liable to a fine (penalty). The minimum amount of penalty should be Rs 10,000/- and the maximum is Rs 1,00,000/-.
How to file TDS?
Below are the few steps you need to follow:
Visit the government website www.tin-nsdl.com where you can find the file format in which e-TDS return is to be prepared.
The TDS return is to be prepared in accordance with the format in clean text ASCII format and ‘txt’ extension for filename.
The file made needs to be scrutinised for being free from errors. FVU (file validation utility) provided by NSDL assists in rectifying the errors and verifying the same.
The finalised generated FVU file can be then submitted or uploaded at incometaxindiaefiling.gov.in website
Filing for income tax returns in India can be confusing
for some. Since it is a mandatory process this article will explain you
the ITR filing procedure under taxation policy in India in the simplest
way.
To begin with the basics, an income tax return is the tax form
utilized ITR filing with the Income Tax Department. The tax return is
normally in a predefined worksheet format where the income figures used
to determine the tax liability are transcribed into the documents.
The law states that individual or business that receive income during
the year must file ITR annually, whether through regular income
(wages), bonuses, interest, capital gains or other sources. Tax returns,
of an individual or a business, must be filed by a specific date
without any fail.
In any of the subsequent cases, the Income Tax Department has made it
compulsory to e-file your Return. Paper returns can only be filed by
those who are above 80 years of age. Individuals or HUF whose income
does not exceed 5,00,000 INR and who haven’t claimed a refund in the
return of income can also file paper returns.
Who is required to file income tax returns?
If you fall in any of the subsequent criteria under Taxation policy in India, then you must file an income tax return:
Less than 60 years of age and your total annual income exceeds 2,50,000 INR.
Senior citizen i.e. 60 years or above and below 80 years of age, and your total annual gross income surpasses 3,00,000 INR.
Super senior citizen i.e. 80 years or above and your total annual gross income exceeds 5,00,000 INR.
A company or a firm, regardless of profit or loss, filing ITR for the financial year is a requirement.
If you are looking forth to claiming a tax refund for the fiscal year.
An Indian citizen and act as a signing authority for any foreign account.
An Indian citizen and maintain an asset or business interest established outside India.
If you have traded equity shares in a company or unit of
equity-oriented mutual funds or unit of business trust for more than
2,50,000 INR and have earned tax-exempt long-term capital gains from the
same.
If you accept any income earned from the trade of a property which
had been held under a charitable or religious trust, political party,
educational institution, and any other authority, body or trust.
A foreign company which has been using any treaty benefit on any deal made in India.
An NRI (Non-Resident Indian) but if your cumulative yearly gross income earned or accrued in India exceeds 2,50,000 INR.
File ITR if you are looking for a loan. ITR filings are taken as
legitimate income proofs. You will need them while opting for any kind
of loan.
If you do not file an ITR even after falling into any of the
preceding criteria, you are liable to respective penalties for the
error.
Mandatory Filing of Return in case of assets stationed outside India
Furnishing of return is compulsory in case of a person who fulfils the following conditions:
They are ordinary-residents in India or resident in India and is not under the obligation to furnish return u/s 139
Such a person at any time during the P.Y.
Someone who holds, as a profitable owner or otherwise, any asset positioned outside India
Is a possessor of any asset located outside India
However, if an individual is a beneficiary, they wouldn’t be
required to file the return of income under this provision, where,
`income, if any, resulting from such asset is included in the income of
the person referred to above in accordance with the terms of the
Income-tax Act,1961
What is the Due Date for Income Tax Filing India? The fiscal year 2018-19, AY 2019-20
The last day for filing Income Tax Returns for FY 2018-2019 for Individuals is 31st July 2019.
Taxpayer Category
Tax Filing Due Date – FY 2018-19
Individual
31st July 2019
Body of Individuals (BOI)
31st July 2019
Hindu Undivided Family (HUF)
31st July 2019
Association of Persons (AOP)
31st July 2019
Businesses (Requiring Audit)
30th September 2019
Businesses (Requiring TP Report)
30th November 2019
Documents Needed for Filing Income Tax Returns
According to the Taxation policy in India,
431st July is the final day to file your Income Tax Returns in India in any given financial year. The procedure of Income Tax Filing India requires
some preparation. This is why the Government provides you with four
months’ window period to organize all documents like salary/income
details, bank statements, previous tax statements, etc.
The procedure varies as per the income earned annually and income
source like salary, business profit, investment profit, etc. Collating
all your records is just one aspect of it.
Choosing the applicable ITR form
Taxpayers have to determine the appropriate ITR form for them in the AY 2019-20.
Link Aadhaar with PAN
It is compulsory for taxpayers to link Aadhaar with PAN for the AY 2019-20 on or before the filing of income tax returns.
For Salaried Employees
If you are a salaried employee, collect these documents to e-file your income tax returns in India. Go through this list to examine the documents you’ll need to pay your taxes.
PAN
Form-16 issued by your employer
Month-wise salary slips
From the AY 2019-20, it is necessary to gather the data on all
taxable allowances received and the amount claimed excluded out of such
allowances e.g., house rent allowance, leave travel allowance, etc., and
reveal the same in the IT return.
Documents related to interest income
Bank statement or passbook for interest on the savings account.
Interest income statement for fixed deposits.
TDS document issued by banks and others.
Clear Tax automatically gives you tax benefit as per Section 80TTA
when you register your income from savings account interest. You would
not need every document listed here as they vary on a case-by-case
basis.
Form 26AS
Form 26AS is an outline of taxes deducted on your behalf and taxes
paid by you. This is given by the Income Tax Department. It shows
aspects of tax deducted on your behalf by deductors, information on tax
deposited by taxpayers and tax refund collected in the financial year.
You can access the form, from the Income Tax Department’s website.
Section 80 Investments
Section 80C investment documents. The investments made under PPF,
NSC, ULIPS, ELSS, LIC qualify for deductions under Section 80C.
Documents Required to Claim Expenses as Deductions
Keep these documents ready to claim the following expenses as deductions:
The highest amount that can be claimed under Section 80C is Rs 1.5 lakhs
Additional Investment Documents
Interest paid on housing loan: Interest on housing loan is qualified
for tax saving up to 2,00,000 for a self-occupied house. For let-out
property, there is no limit of interest on housing loan qualified for
tax saving till FY 2016-17.
From FY 2017-18, the total loss from house property available for
set off against other income is bound at 2 lakhs INR and accordingly,
interest on housing loan is suitable for tax saving up to 2,00,000 INR
for let-out a property as well.
Education loan interest payments.
Stock trading statement: The stock trades that were produced during the year can possibly be taxed under Capital Gain.
The Procedure for Income Tax Filing India
Every year it is important to file ITR on time as there exists a late filing fee on overdue ITR filing.
One can fill the ITR form online. This step by step guide will help you file your ITR on time at the ease of your house
If you are a first-time user or filing your returns for the first
time then click on the ‘New Registration’ tab and register yourself by
providing important details and creating your profile and password.
While creating your user ID, you must ensure that you have an active
e-mail id and mobile number and it is cited correctly.
Communication from the Department
It is essential as communication by the department will be sent on
this. You can finish the registration by clicking the activation link
sent via an email and providing a one-time password (OTP) which you
receive on your mobile. Click on the tab ‘Registered User’ if you have
already registered yourself on the website. For any help, one can click
on the ‘Customer Care’ tab to get the helpline number and contact the
customer care centre.
Next click on the login tab and enter the required details: your
User ID i.e. your PAN, password and captcha code. Click on the log-in
button at the bottom to sign in.
After signing in, your account dashboard will show up as displayed
in the image below. Click on the ‘e-file’ tab and select the ‘Income Tax
Return’ option. Please note that the process of filing returns for FY
2017-18 has some new modifications done by the tax department.
Therefore, the image has new screenshots.
Next, choose the assessment year, i.e., 2018-19, form i.e. either
ITR-1 or ITR-4 and then submission mode – “Prepare and Submit Online”.
Click on the tab “Continue”. For example, some screenshots of ITR-1 are
provided below.
Here you will also be asked to select the option to verify your
returns Three options are provided to verify your returns: a) Via
Aadhaar OTP which is valid for 30 minutes, b) Generated EVC option
through My Account or Bank ATM that is valid for 72 hours or c) by
sending signed copy of ITR-V to, “Centralized Processing Centre, Income
Tax Department, Bengaluru – 560500”.
After selecting one of these options, click on “Submit”. You also
have a choice to fill your ITR form in Hindi. Select Language “Hindi” if
you wish to change your language and then press “Continue”.
The website will redirect you to the page for filling the form
chosen by you. Before starting to fill the ITR form, one should read the
‘General Instructions’ given at the start of the form to know do’s and
don’ts.
After that, you will have to fill in the necessary data in various
tabs i.e. ‘General Data’, ‘Revenue Details’, ‘Tax Details’ ‘Taxes Paid
and Verification’ and ’80G’ in the ITR form. One should make sure that
the Tax payable shown in the online form is the same as your
calculations.
Before finalizing the submission, it is prudent to save the data and
recheck it to evade any mistakes. Once you click the ‘Preview and
Submit’ button, your form will appear, providing you with a “Preview” of
your ITR filing form before completing the final submission.
Once you click ‘Submit’, your ITR will be uploaded. You will have to verify your return using any of the options available.
For FY 2016-17, people had the choice to submit their ITR by
utilizing their digital signature. They can select the option to
digitally sign their ITR while submitting data of ITR form using which
they want to file their return. However, for FY 2017-18, this option is
not on display on the e-filing website when you submit the data.
You can verify your return either electronically using the Aadhaar
OTP or Electronic Verification Code method or by the offline method of
shipping a signed printout of the ITR V Document to CPC – Centralized
Processing Center, Bangalore before 120 days from the date of e-filing.
You will receive an acknowledgement or an ITR V is simultaneously on
your registered email once you upload your return successfully. This
acknowledgement will also show up in your account on the e-filing
website from where you can download it if required.
The department processes your ITR on verification by you. After your
ITR is processed, you will be intimated about the same via email and
SMS on your registered mobile number.
How to check the status of your ITR
By using acknowledgement number without login credentials.
Firstly, look for the option of check ITR status under the services tab on the extreme left on the e-filing website
After that, you’ll land on a page where you’ll have to fill your PAN number and ITR acknowledgement
The status is displayed after the submission
Using login credentials
Click on the View returns/forms option by logging in to the e-filing website
Select Income Tax Returns and assessment year from the drop-down menu
Finally, after submission, the status will be displayed
Consequences of failure to furnish return of income
Mandatory interest for delayed submission or non-submission of return:
Where an assessee files a return of income after due dates
prescribed, interest at the rate of 1% for every month of delay in
filing the return will be levied u/s 234A. Starting from the date
promptly following the due date and ending on the following dates:
Circumstances Ending of the following dates:
Where the return is filed after the due date
Where no return has been furnished at the date of completion of the AY
Fee for default in furnishing return of income:
Where a person who is required to furnish a return of income u/1139,
fails to do so within the prescribed time limit u/s139(1), he shall pay,
by way of fee, a sum of:
5000 INR if they furnish the return on or before 31st December of the A.Y.
10,000 INR in any other case
However, if the total income of the person does not exceed 5,00,000 INR the fees payable shall not exceed 1,000 INR.
Willful failure to furnish return of income may also attract
prosecution u/s 276CC. In case, the tax evaded exceeds 1 Lakh INR, there
is rigorous imprisonment for a term of a minimum of 6 months and up to 7
years along with fine.
If individuals do not file the return, then the best judgment will be taken u/s 144.
Conclusion
We hope the complete process explains you everything about taxation policy in India and ITR Filing
as per the standard procedure. In case you need legal or financial
assistance please feel free to write to us at contact@taxolawgy.com and
our experts will be happy to guide you.
TaxoLawgy 