November 6, 2017

Income Tax

The tax levied on the income (including salary wages, etc.) of individuals by the Government of India is called income tax. It is levied and paid off on yearly basis.

The rate of tax that is levied on the income of the individual depends on the tax slab under whose purview the individual comes and also the age since the rates are different for persons below the age of 60 years, further 60-80 years has a different rate of tax and lastly, the super senior citizens aged above 80 years have a different rate of tax applicable onto them.

The individuals who are below 60 years and are having an annual income of upto Rs. 2,50,000 are exempted from the liability to pay income tax. However those individuals who earn above Rs. 2.5 lakhs and up to Rs. 5 lakhs are taxed at 5%; those whose income is between Rs. 5 lakhs and up to Rs. 10 lakhs are taxed at the rate of 20% and those with an annual income of more than RS. 10 lakhs the rate of tax is 30%.

 

Is iscompulsary to file  Income Tax return ?

The process of payment of the Income tax is called filing of income tax returns. It can be done both online and offline by an individual/ firm /HUF, etc.

The process of fling income tax returns has been made compulsory if the following conditions are fulfilled :

  1. If your gross annual income prior to any of the deductions is above the exempted limit i.e. if you are below 60 years of age, your annual income is Rs. 2,50,000; Rs. 3,00,0000 if you are above the age of 60 but below 80 years and Rs. 5,00,000 if you are 80 years of age and above.
  2. In case you need to claim a tax refund
  • In case of carrying forward a loss under the category ‘Income’
  1. In case of being an Indian resident you have an asset or interest in an entity that is outside the territorial jurisdiction of India
  2. In case of being an Indian resident you have a signing authority in a foreign account
  3. If you are the recipient of any income that accrues from any property that is held by a trust, political party, etc.
  • If you intend to apply for a visa or a loan

 

Further, in the following cases, the income tax return needs to be filed online –

  1. If you intend to claim a tax refund
  2. If your gross annual income exceeds Rs. 5,00,000
  • If you are filling your income tax returns via form ITR-3,4,5,6 or 7

The returns have to filed in a preset format which is provided for under different forms and varies from person to person. First thing is to choose the appropriate form for filing your taxes. In total there are 9 types of different forms –

 

  • ITR-1

Otherwise known as SAHAJ, deals with income of an individual with salary or pension or income from one house property or other sources (not including lotteries or race horses)

 

  • ITR-2

Applicable for individuals or Hindu Undivided Families having any income other than ‘Profits and gains of business or profession’

  • ITR-3

Applicable for individuals or Hindu Undivided Families having income sources from ‘Profits and gains of business or profession

  • ITR-4

Applicable for an individual or a HUF carrying out a proprietary business or profession

 

  • ITR-4S

Known as SUGAM, it is applicable to individuals and HUFs opting for presumptive taxation scheme under Section 44AD/44AE

 

  • ITR-5

For entities being a firm, LLP, AOP, BOI, artificial juridical person, co-operative society and local authority. This, however, does not include trusts, political parties, institutions, colleges or entities who are required to file the return of income under Section 139(4A), 139 (4B), 139(4C) or 139(4B)

  • ITR-6

Applicable to companies other than the ones which claim a deduction under section 11

  • ITR-7

Applicable to all entities who should furnish a return of income under Section 139(4A), 139 (4B), 139(4C) or 139(4B)

  • ITR-V

The acknowledgement form of filing a return of income

There are various incomes that come under the head income for the calculation of income tax, further there are many deductions as well that get can save you a substantial amount of money. However, its difficult for a person with little to no expertise to go about it and so we are here to help. You can save your precious time and money as well by coming to us and we will do it for you! With 30 years of experience, you can be rest assured that you are in safe hands.