A comprehensive list of frequently asked questions on Income Tax Basics, FAQs for every taxpayer for AY2019-20 including documents needed to file your taxes and covering Income, Deductions, Allowances, Exemptions, when, what, how to consider, tax period, tax savings during ITR Filing
Government of India imposes Income Tax on anyone who earns income in India. Income tax is levied on the basis of Income Tax Act passed by the Parliament of India in 1961. Every year income tax rates, education cess, surcharges, deductions, exemptions etc. are revised by the Finance Minister of India part of new finance budget.
Any Individual or group of Individual or artificial bodies (AOB) who have earned income are required to pay Income tax on it. The IT Act recognizes the earners of income under eight categories.
Any person whether they are resident or non-resident, whose income in India exceeds Rs.2,50,000 during financial year ending 31st March is required to file their income tax return in India.
The Income tax Act applies to all persons (resident or non-resident) who earn income in India in a given financial year. An individual stays in India for 182 days or more in a financial year is treated as resident in that financial year regardless of his citizenship. An Individual who stay in India for less than 182 days is treated as non-resident.
Before filing taxes, one need to aware of the procedure of filing. Below is a list of steps in filing the taxes with EZTax.in It’s as simple as
The due date for filing income tax return for individuals is July 31st (with few exceptions, where for AY 2019-20, it is Aug 31st). For few years in the past, the due date was postponed to a week later due to specific issues such as natural calamities etc.
In case you haven’t filed your return before Jul 31st (or Last date for that year. Eg. Aug 31st is the new last date to eFile your Return for AY 2019-20), you still can file your return with EZTax through self-service or assisted service but filed as belated return before the Jul 31st of the next year.
Briefly, belated returns may attract few penalties / restrictions.
While there are genuine cases where one may need to file their taxes late, one should understand the how Income Tax Department may treat such return ? Belated return is a tax return submitted after the due date Jul 31st but before next year’s Jul 31st. Briefly, belated returns may attract few penalties / restrictions.
Income earned during twelve months between 1st April to 31st March of an year, commonly called as Financial Year (FY), is taken into account for purposes of calculating Income Tax. Income earned in the financial year is assessed (evaluated, calculated) in the next Financial year which is called as the Assessment Year (AY). A person files his return during an Assessment Year for the income earned in the Financial Year.
For example, income earned in Financial Year (FY) 2018-19 to be filed during the Assessment year (AY) is 2019-20.
The word Income has a very broad and inclusive meaning. In case of a salaried person, all that is received from an employer in cash, kind or as a facility is considered as income. For a businessman, his net profits will constitute income. Income may also flow from investments in the form of Interest, Dividend, and Commission etc. Under the Act, all incomes earned by persons are classified under 5 income heads, such as:
Yes, as long as the business loss is declared part of the previous year’s tax return and the return filed before the due date of income tax filing.
Gross Total Income (GTI, in short), is the aggregate taxable income under the different heads of income such as income from salary, income from house property, income from profits or gains of business, capital gains, and income from other sources. i.e., the total income computed in accordance with the provisions of the IT Act before making any deductions under Sec 80 C to 80 U.
PAN is a ten-digit unique alphanumeric number issued by the Income-tax Department. PAN is issued in the form of a laminated plastic card (commonly known as PAN card).
As per section 203A of the Income-tax Act, 1961, every person who deducts or collects tax at source has to apply for the allotment of TAN. Section 203A also makes it mandatory to quote TAN in following documents:
TAN is allotted by the Income-tax Department on the basis of the application submitted online at NSDL-TIN website or offline to TIN-FC managed by NSDL. NSDL will intimate TAN to the applicant at the address specified in the application
There are two modes for applying for TAN:
They are as follows:
OFFLINE: An application for allotment of TAN is to be filed in Form 49B in duplicate and submitted to any TIN-FC. Addresses of TIN-FCs are available at NSDL-TIN website (https://www.tin-nsdl.com). In case of an applicant, being a company which has not been registered under the Companies Act, 2013, the application for allotment of Tax Deduction Account Number may be made in Form No. INC-7 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.
ONLINE: Online application for TAN can be made from the website of NSDL-TIN website.
Income tax is charged on total income earned by an Assessee during the previous year, but at the rate applicable to the assessment year. It shall be determined on the basis of the residential status of the Assessee. Sec.6 of the act divides the Assessee into 3 categories.
There is basic and additional condition for determining the residential status of different assessee.
While it depends on the nature of income you received, there are few must have information / documents and other good to have documents.
Good to have:
For some, the below may be required:
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