Difference Between Income Tax Return and TDS.

Income Tax, ITR


Difference Between Income Tax Return and TDS. Why You need to file income tax return (ITR) even if TDS is paid

Income tax and Tax deducted at source often confuse each and every new taxpayer. Before filing tax, one should know and understand the differences between these two types of taxes.

This article will give you an overall understanding of what the two Taxes are about and how they are different in function. We will also discuss the need to file for Tax returns if TDS is paid.

What is ITR [Income Tax Returns]?

income tax is imposed upon an individual or a firm by the state when the income exceeds the limit set by the income tax law of one country. Income tax is taken by the state government and used primarily for the development programs, salaries of government employees and various other programs.

It is based on the annual income of one individual or business entity. There are various rules and regulations prevailing in the country regarding income tax. Since it is an annual calculation, you are required to file for Tax return once every year (if your salary is above the permitted minimum). It can be easily filled through the government portal.

Income tax is applicable to individuals who are earning an annual salary of 2.5 Lakhs or above. For senior citizens, the limit is set to 3 lakhs if you are aged between 60-80 and 5 lakhs if you are aged above 80.

What is Tax Deducted at Source?

Tax deducted at source as it is better known is s system introduced by the income tax department wherein the person or entity responsible for giving salary, commission or any other professional fees is liable to deduct a percentage as the tax before giving the amount to the employee/the receiver of the payment.

This is usually done monthly or over a period of time.

Do you need to file for ITR if TDS is paid?

Regardless of TDS being paid or not, you will have to file for income tax returns if you fit certain criteria. This is mainly because TDS is calculated based upon an anticipated amount and income tax is an accurate amount.

Let us use an example to better understand the situation. Suppose an employer is deducting TDS from an employee’s salary on a monthly basis, this would mean that, TDS will more or less be equal to income tax payable. Now suppose if the employee has land and is earning from it. Here the final income tax amount you will be getting would be more than the sum of TDS deducted.

If you exceed the minimum limit which is set (2.5 Lakhs) it is mandatory for you to file income tax returns. You will have to file a return if your salary is below the permitted limit also in some cases.

Failure to do so will result in a letter from the AO informing you about the failure to file returns. And if this is ignored you will end up with a penalty or sometimes even legal action if the taxable amount is high. This can also lead to imprisonment of up to 2 years depending upon the scale of the offense.

It is always best to file for returns at the correct time as penalties can often lead to headaches in the future.

What are the differences between Income Tax Return [ITR] and Tax Deducted at Source?

  • The first difference would be in the calculation of the two taxes, while income tax is calculated annually, TDS is deducted periodically based upon an estimation of the annual income. The total of the TDS deducted during the year would be more or less equal to annual income tax which you are incurred to pay.
  • Income tax is calculated based on a definite amount while TDS is calculated based upon an anticipation of the annual earing. That is why you should file for ITR.
  • Income tax represents an individual’s annual tax liability. This is not the case with TDS as it just displays a fraction or percentage of an individual’s annual tax liability
  • There are instances where you will not be inclined to TDS deductions within a month but you should file for income tax. This is when an individual’s income from primary employment is low but he may be getting money from secondary sources which makes his annual salary rise above the limit.
  • Now another difference is that TDS is deducted and paid to the government by the payer/ the employer. It does not have anything to do with the receiver. On the contrary income tax should be paid directly by the taxpayer.


Let’s summarize what we have discussed in the above topics;

  • Income tax is calculated based on the annual earnings of the individuals or a business enterprise. Tax deducted at source is based upon an anticipated tax which is usually deducted monthly. TDS can be regular or irregular in nature.
  • Even if the tax is deducted in the form of TDS every month, you will still have to file for income tax returns as it is mandatory.
  • When you are filing for returns you can make sure all TDS is considered and you can also apply for a refund if found eligible.
  • Another valuable piece of information would be the tax credit statement which will be given by the employer or your bank, if not given it can be filed through section 26AS which will give accurate credit information.
  • Individuals may face strict penalties or actions if they ignore the existing laws and fail to file for income tax.

Filing for income tax can be especially difficult for remote workers or freelances whose wages cannot be calculated properly over a period of time. The can consult the help of accounts experts or agencies to do the same on their behalf. This is also the case if you happen to have a business entity and have to file taxes.

Also Read :

Step-By-Step Guide on How to File Income Tax Return Online

Income Tax, ITR


Step-By-Step Guide on How to File Income Tax Return Online

Step-By-Step Guide on How to File Income Tax Return

As 31st July is just a few days away. It is high time to file your Income Tax Return now. Here is a step by step guide on How to File Income Tax Return. Read on and file your ITR in an easy and quick manner.

1. If you are a first-time return filer, register yourself on the income tax department’s official

E-filing portal www.incometaxindiafiling.gov.in.

Your permanent account number (PAN) will act as your user ID.

2. Keep key documents handy, including the Form 16, Form 26AS (tax credit statement), bank statements, copy of returns filed last year, capital gains statement from mutual funds and brokers.

3. Go to ‘Downloads’ tab to download the ITR preparation software (JAVA or Excel utility) for the relevant assessment year.

4. If tax is due, make the payment immediately and enter the details in appropriate schedule. Repeat above step so that tax payable turns ‘zero’.

5. Enter all data and click on ‘Calculate’ to compute the tax and interest liability and final figure of refund or tax payable.

6. Prepare the return using the downloaded software application; pre-populate the personal details and tax payments/TDS by clicking on the ‘pre-fill’ button. Compare with the information you have to ensure that nothing is left out.

7. Generate and save the ITR data in XML format.

8. Login to the e-filing website, go to ‘e-file’ and click on ‘Upload Return’.

9. Select the relevant ITR, Assessment Year and XML file saved.

10. In case of physical verification, you will have to send the printed and signed ITR-V form to the I-T department’s CPC in Bengaluru by post within 120 days of e-filing your return; an acknowledgement from the department confirming receipt will complete the process.

11. If you have not used DSC, ITR-V will have to be downloaded, you can also choose to generate electronic verification code through your bank ATM/net banking or use Aadhar-based OTP for e-verification.

12. Upload Digital Signature Certificate (DSC), if you have obtained one and it is registered with the portal, and click on ‘Submit’ button. In this case, your process will now be considered complete.

Also Read :

Worried About Income Tax: We have some Ideas for you.

about income tax

Four Things you may not know can cut your Income Tax.

(1)  Restaurant Bills :-     some part of the salary can be paid in the form of food coupons. you can get a part of your salary at ₹ 50 a meal for 22 working days and up to two meals a day. That sums up to ₹ 2200 a month . If someone falls in the 30% tax bracket then this could save up to ₹ 7920 annually in taxes.

(2)  Expenditure on your vacation : –   when you purchase tickets for vacation travel then the expenditure on tickets can be claimed as leave travel allowance ( LTA) . There is no ceiling on how much LTA can be claimed so it become more interesting . But the fare of your flight must not cost more than the national carrier for the same route . Also this claim is allowed twice in four years . For example if you are planing a trip to manali and your tickets coast you around 21,000 including your spause then you can get benefit of 7000 if you fall in 30% tax bracket . But this claim is only for travel with in India . Important thing is it only covers travel fares not the boarding , lodging and other expenses.

(3) HRA (House Rent Allowance ) :-   HRA is given by your employer to cover the house rent paid by you. But working with your employer to fix HRA could be great deal to save tax . But you should have all rent receipts and the agreement with your landlord to avail the tax benefit . But if you go for home loan and want tax benefit on interest paid instead of HRA than watch carefully because  the interest is steep and tax benefit on interest is restricted to tax save on 2 lakh annually. So the choice is yours.

(4) Official Reimbursements : –  If your employer agrees to make some part of your salary as reimbrusements then this could be a tax saving route . Like phone bills, cab expeses etc . Suppose you get 60,000 annually as reimbursement than you save 20,000 straight if you are in 30% bracket .

So, this is for you read to have an upper hand in tax savings . Read again to become a master . Thanks for the patience .

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Get tax exemption of Rs 10,000 on savings bank account interest income

Income Tax, Investment, ITR, Save Tax Tips, Savings


Get tax exemption of Rs 10,000 on savings bank a/c interest income.

Q1. I have salary income, interest from saving bank account and dividends from equity funds. For interest from bank accounts, do I have to submit proof to claim deduction under Section 80TTA? Do I need to include dividends as part of other income?

You need to include interest from saving bank account under income from other sources. You would be eligible to claim deduction of Rs 10,000 under Section 80TTA. You don’t need to submit any proofs for it. Similarly, the dividend income would also form part of income from other sources but shall be exempt if total dividend doesn’t exceed Rs 10 lakh during a financial year.

Q2. My wife sold her flat in March 2018 for Rs 1 crore and bought a flat for Rs 1.5 crore in April 2018. Since sale and purchase fall in two different financial years, how can she show in ITR the sale amount which is offset against her purchase? She also wants to claim as refund the TDS on the sale. 

Under Section 54, if a long term capital asset is sold, the resultant gain can be invested in another house property within one year before or two years after, or within three years if the house is constructed; for claiming LTCG exemption. Assuming that the house sold by your wife is a long term capital asset, the gains shall be exempt from tax as the new house is acquired within the specified time limits irrespective of change in financial year.

While filing her return, she would need to disclose the capital gains and put it u/s 54 for exemption. Also, for TDS which has been withheld on sale of house, she will need to disclose this amount in ITR and she shall be allowed the credit/refund of the same accordingly. Also, ensure that the amount is reflected in her Form 26AS and Form 16B has been taken from the deductor.

Q3. My wife has equity shares and mutual funds worth Rs 15 lakh. She is a housewife and has income from private tuition of Rs 5,000 per month. Which income tax returns form should she use for FY 2017-18? 

Since your wife has only one source of income in the nature of a venture, it could be considered as business income and she will be required to file ITR-3. She would also be eligible to claim the presumptive taxation scheme and if opted, she can file her return in ITR-4. Further, if she intends to treat this as income from other sources, then she will be required to file ITR-1.


 Source: Financialexpress.com

Income tax returns (ITR) filing: How to avoid excess deduction of TDS from salary income



Income tax savings

Income tax returns (ITR) filing: How to avoid excess deduction of TDS from salary income

At the beginning of a financial year, employees are supposed to furnish their ‘Income-tax declaration’ comprising of details of the investments and expenses they planning to make during such financial year. Based on their declaration, the employer deducts income tax at source on a periodic basis and a true up is done, before the end of such financial year, either by deducting further taxes or deducting less taxes for the remaining period as per the actual proofs of investments/savings furnished by the employee. Hence, it should not be surprising if you find yourself in a situation where you are doing an annual drill of collecting and furnishing tax-saving proofs to your employer before the due date.

Keeping in mind  the provisions of section 192(2D) of the Income-Tax Act, 1961 (Act) read with Rule 26C of the Income Tax Rules, 1961 (Rules) and the industry best practices, with this article we attempt to guide you as what could be the right proof for a given investment or savings in order to save income tax.

House Rent Allowance: To claim such allowance, an employee may need to produce particulars such as name, address and PAN of the landlord in case the total rent paid during an FY exceeds Rs 1 lakh. In case PAN of the landlord is not available to be showcased then, declaration in Form number 60 should be obtained.

Interest on loan taken for residential house property: This is another way to save income tax wherein, name, address and PAN of the lender, a certificate from the lender bank/ institution consisting details such as date of availing the loan, interest chargeable and installment amount need to be submitted. Such document would also be helpful where the employee may want to set off loss under the head income from house property against his salary income.

Tuition Fees: Copies of tuition fee receipts duly signed/stamped by the educational institution.

Leave Travel Allowance (LTA): One needs to gather the copies of travel tickets including original copies of boarding pass in case of travel by air.

Investments under Section 80C: Investment/savings as prescribed under Section 80C gain importance as one can claim a total deduction of Rs 150,000.

In case of a Public Provident Fund (PPF) account, which is the most popular investments avenues for people wanting to save tax, an employee may produce copies of relevant extracts of the passbook containing the evidence of deposits made and in case of an online account, the e-receipts showing your account details and transactions could be showcased.

In case of investments or deposits made in NABARD Rural Bonds, Sukanya Samriddhi Yojana, National Saving Certificate (NSC), Infrastructure Bonds and 5-year tax saving fixed deposit, one can submit the deposit receipts, bond certificates or certificates etc., receipt from the bank may be produced. In case of an Equity Linked Savings Schemes (ELSS) of mutual funds (MFs) and life insurance, one may submit the ELSS fund statement and premium paid receipts, respectively.

For employees who have taken a life insurance (LIC) policy and wish to claim deduction on yearly premium paid, they may furnish the receipt obtained at the time of payment from the insurance companies and the relevant bank statement evidencing such payment made.

Employees can claim a deduction on installments made of housing loan taken on furnishing of a certificate from the lender bank or institution specifying the amount paid towards principal repayment.

National Pension System (NPS): A copy of receipt for amount deposited during the year and a copy of relevant bank statement to show the extract can be submitted.

Medi claim Premium: Employees may also show an 80D tax certificate obtained by the insurance companies in support of deduction of premium paid coupled with copies of extract of bank statement/ passbook evidencing such payment. Additionally, an employee may also furnish receipts/bills for any health routine/preventive check-up undergone during the financial year.

Donations: In case of donations to certain approved trusts,  funds, charitable institutions/donations for renovation or repairs of notified temples, Prime Minister’s National Relief Fund, National Defence Fund  etc., proof of donation can be submitted by way of a receipt containing the particulars viz., Name and address and PAN of trust or institution, Name of donor, Registration number and the validity of the same.

However, there are no standard guidelines is made available by the department with respect to investment proofs to be produced for all the prescribed investments. However, as per the annual circular issued by the Central Board of Direct Taxes, the responsibility of confirming the genuineness and completeness of the proofs lies with the company the employee is working for. Further, the circular also says that it is the duty of an employer, that in case there is a doubt about the genuineness of the employee’s claim regarding any deposit/ payment made by the employee/ subscription, he should not approve of it, and the employee would then be free to claim the deduction by filing his return of income and furnishing the necessary proof etc.

Hence it is strongly advised that one needs to be abundantly cautious while furnishing all relevant proofs obtained while making such investments at the satisfaction of the employer to prevent any excess deduction of taxes.

Bank Fixed Deposits (FDs) That Save Income Tax Under Section 80C




Bank Fixed Deposits (FDs) That Save Income Tax Under Section 80C

Time to revisit your yearly earnings and check on the investments you have done throughout the year to save income tax. It’s a common knowledge that there is a deduction of INR 1.5 lacs under section 80C of Income Tax Act. This can be easily done through tax saving fixed deposits with a minimum tenure of 5 years. However you need to lock in your amount for a minimum of 5 years. Many banks nowadays offer online provisions for such tax saving fixed deposits. The interest rates are similar to the non-tax savings fixed deposits with senior citizens given a premium on the regular rates. Other popular investment plans are insurance premium, EPF or PPF contribution.

10 Points you need to remember that will help you save income tax:

1) All income tax saving fixed deposits have a lock in period of minimum 5 years. The amount cannot be withdrawn pre maturely in such cases

2) Some banks such as SBI offer Fixed deposits with minimum tenure of 5 years and maximum ten years.

3) Below is a comparative interest rates of common banks in India

Banks Interest Rate General Rates For Senior Citizens
SBI 6% 6.50%
ICICI Bank 6.50% 7%
HDFC Bank 6% 6.50%

4) The maximum investment under 80 C through income tax saver fixed deposits is Rs. 1.5 lakh.

5) This fixed deposit can be started with a minimum amount of as low as INR 100. SBI for instance gives this investment opportunity with a minimum amount of INR 1000.

6) Interest earned on such tax saving fixed deposit is taxable according to the individual slabs.

7) Tax deducted at Source also known as TDS is applicable on the earned interest. TDS is applicable on payable interest or interest reinvested on fixed deposits across all branches exceeding INR 10,000 in a complete financial year.

8) Interest can be earned monthly, quarterly, semi-annually or annually and can be reinvested according to the investors’ discretion.

9) For joint holder fixed deposit the tax benefits can be paid only to the primary holder..

10) All Tax savings deposits have nomination facilities.


Govt has deactivated over 11 lakh PANs. Is yours still valid?

Income Tax, ITR, News Update


Over 11 lakh PAN cards have been deactivated by Government. Is yours still valid?

It is important to check if your PAN is still active or not as the deadline to link Aadhaar with PAN no. ends on August 31 2017.

Recently, over 11 lakh PAN cards have been termed as fake and duplicate by The Income Tax Department. The individuals under the radar are those having PAN cards which are issued under false documents and those with multiple PAN cards. The government will be helped by this move, as it will prevent theft and identify the purchase of benami properties.

The deadline of linking Aadhar number with PAN card is 31st August. Hence it becomes important to check if your PAN is still active or not.

Following are the simple steps which needs to be followed to check whether you PAN is valid:

> Log in to the e-filing website.

> Under Services on the left side of the page, Click on ‘Know Your PAN

> After clicking, you will be directed to a page where in you have to fill your details.

> After you have filled in the details, you will receive a one-time password (OTP) on your registered mobile number for verification.

> After you have keyed in the OTP, click on ‘Validate

> If your PAN is still valid, it will show that it is ‘Active

> If there are multiple PAN numbers with same details, a message will pop-up saying that, ‘There are multiple records for this query. Please provide additional information’ and it will ask you to fill in the additional details. You will then be directed to a new page which will tell you the validity of your PAN.

A quick checklist for NRIs who are filing tax returns in India


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A quick checklist for NRIs who are filing tax returns in India

NRIs applying for tax refunds have to share foreign bank account details

India’s overseas population is the largest in the world with 16 million people. Most non-resident Indians (NRIs) have bank accounts, investments in shares/bank deposits, house property and other assets in India and are required to file tax returns in India by 31 July 2017.Here are the certain check points from NRIs perspective, which they should consider while filing their tax returns in India.Determination of their residential status in India

For a particular financial year (1 April to 31 March), depending upon the period of stay, the NRIs have to ascertain their residential tax status in India. This is an appropriate check point as, for an individual who is an Indian resident, the global income is taxable and for the non-residents, only taxable income is the amount earned from the sources in India.


It may be pointed out that residency test under the Foreign Exchange Management Act (FEMA) is different from the test given under the Income Tax Act and the same is not relevant for tax purpose.

Under the Income Tax Act, an Indian citizen who leaves India for an employment purpose, or an NRI who visits India, can stay for up to 181 days without losing his non-residential status in India. The day of arrival, as well as the day of departure, is considered as stay in India.

Changes in the return of income for AY 2017-18

For reducing compliance burden ITR 1 – (SAHAJ) has been introduced replacing SAHAJ ITR-1 for individuals. The simpler ITR-1 form can be used for filing the tax returns if the NRIs have only the passive income.

ITR 1 – (SAHAJ) is relevant to individuals having one house property, salary income, and other sources of income such as interest. One of the new conditions for usage of this form is that the total income should be less than Rs 5 million.

ITR 2 is introduced, which will replace previous ITR 2, 2A and 3. Individuals not covered in SAHAJ ITR-1 will be covered in ITR 2. It is also applicable to HUFs. However, individuals and HUFs must not carry any business or profession. NRIs, who have taxable capital gains or income from more than one house property, shall be required to file their return of income in ITR-2.

Quoting of Aadhar card number not mandatory for NRIs in their return

The Central Board of Direct Taxes (CBDT) has clarified that the requirement to quote Aadhaar as per section 139AA of the Income Tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016.

Details of assets and liabilities to be furnished in schedule AL of the ITR for AY 2017-18

NRIs having total income above Rs 5 million are required to report the cost of certain assets (movable as well as immovable) located in India and the corresponding liabilities under the schedule of assets and liabilities (Schedule AL). This schedule is contained in ITR 2, 3 & 4.

Recent CBDT explanation on discretionary reporting of particulars of one foreign bank account in refund cases by the non-residents

CBDT on 24 July 2017, made it clear that it is not necessary, for the non-residents who are not requesting refund or non-residents who are requesting a refund but are having a bank account in India, to furnish the details of their foreign bank account in their income tax return.

However, for non-residents who are applying for income tax refund but are not having a bank account in India will have to provide the particulars of one foreign bank account in their income tax return for the issuance of refund. Moreover, non-residents do not have to report their assets and financial interests outside India. 

Obligation to file return income in case of exempt long-term capital gain 

If the taxable income of NRIs is below the basic exemption limit, but the income to be exempted is more than the basic exemption limit (i.e. Rs 250,000), then it is mandatory for the NRIs to file income tax return.

Until last year, up to FY 2015-16, a taxpayer (individual or HUF) was required to file his return of income if his total income without considering the deduction under Chapter VI-A exceeds the basic exemption limit. For example, if an NRI has no other income except the only exempt long-term capital gains income of Rs 575,000, he still has to file his income tax return because the long term capital gains exceeds Rs 250,000 (without considering the exemption).

Availing benefit under the Double Tax Avoidance Agreement (DTAA)

In order to claim the benefit of DTAA, it has to be discovered whether that income is taxable or not as per Indian domestic tax law. After determining that the income is taxable in India, it has to be checked whether India has signed a comprehensive DTAA with the country of residence of NRI and in such a case, NRI has to furnish a TRC (Tax Residency Certificate) which is issued by the tax authorities of that country (in certain case also furnish a self-declaration in Form 10F). 90 such DTAAs have been signed by India, including USA, UK, UAE, Singapore.

Relief can be claimed under DTAA, depending on the type of income, (income may well be completely exempted, or may be taxed at a lower rate). If the income is taxable under the DTAA, then the NRIs have to pay tax in India and can claim credit of such taxes paid against the tax liability in their country of residence subject to certain conditions.


Various aspects that needs to be taken care of while finalising the Indian tax returns:

Reporting of passive income – It is apposite to state all the post office interest, bank interest (savings and fixed deposit) in the Income Tax Return. CBDT has explained that the interest credited/received on deposits is taxable unless exempt under section 10 of the Income-tax Act. Such interest income should be shown in the return of income even in cases where Form 15G/15H has been filed if the earning is not exempt under section 10 of the Income-tax Act and the total income of the person exceeds the maximum amount not chargeable to tax.

Filing of exempt income details – Also, report the exempt income like interest on NRE/FCNR deposit, dividends, interest on tax-free bonds, eligible gifts received, long-term capital gains on listed securities, among others, even though there is no tax impact under the schedule of exempt income.

Reconciliation of Income and Taxes with Form 26AS – Do reconcile the TDS credit or advance taxes paid, which you are claiming in the tax return with TDS credit /advance tax paid reflected in Form 26AS.

Time limit for filing a belated return reduced by 1 year – Effective FY 2016-17 (The assessment year 2017-18), a belated return can be filed till the end of the relevant assessment year. Hence, time available for filing a delayed income tax return for 2017-18 assessment year, would be up to 31-3-2018 and not 31.03.2019.

E-filing income tax return: How individuals can upload any ITR using excel utility

Income Tax, ITR, News Update, Save Tax Tips


E-filing income tax return: How individuals can upload any ITR using excel utility

Every year the Income tax department is trying to make the process of filing tax returns easier for taxpayers. Here is a step by step guide on the procedure of uploading and filing income tax returns online.

There are two ways to file income tax return online. One is to download the applicable I-T form from the income tax website, fill the form offline, save it, generate an xml file and then upload it. Another way of doing it is to enter the relevant data directly in an online form and submit it

However, the latter method is available only for ITR 1 and ITR 4 and not for forms for other categories of individual taxpayers.

This e-filing method can be used to file any ITR applicable to individuals whereas e-filing totally online method is available as an alternative only for filing ITR 1 and ITR 4.

Visit website – www.incometaxefiling.gov.in

Download the ITR form applicable to you depending on the types of income you have received in the financial year for which the return is to be filed. The form is available in two alternative software formats-excel and java. The ITR forms are available under the “Downloads” tab given on the website for the relevant year. You can download whichever software you are comfortable in using.

Prepare the return by filling all the relevant information in the form which is available in two alternative software formats-excel and java. Tip: The cells with text in red colour have to be filled mandatorily and data has to be entered in green coloured cells by the taxpayer. While filling up the sheets some white background cells automatically pick up data as they are system calculated based on data entered by you in other cells. Also, while filling the form, click the validate button once  (after filling the sheet) to ensure all the relevant sections have been filled.

Some excel functions have to be enabled before filing up the ITR form in excel format. The side buttons i.e. validate and other buttons of the excel file will work only if ‘Macros’ and ‘ActiveX’ function of the Excel workbook is enabled. The Macros can be enabled by visiting File > Excel options > Trust Centre > Trust Centre Settings > Macro Settings > Enable All Macro > Click ‘OK’ button twice to save this setting. The ‘ActiveX settings’ is also enabled in the similar fashion  like macros in the Trust Centre settings.

The ITR form will have multiple sheets – some relate to general information and computation of tax whereas others relate to different types of income and tax rebates. Open each sheet and fill the ones that are applicable to you depending on the types of income you have earned in the year for which the return is being filed. The general information sheet will have to be filled in all cases. Most of the fields (with white colour background) in the tax computation sheet get filled automatically once you fill the income sheets relating to those fields.

After you have entered all the information in the different worksheets (which are applicable to you) of excel file, save the sheet and then click ‘Generate XML’ button to generate xml version of your return. It is advisable to open the XML file generated and check that all the information filled in the form by you is showing correctly.

Now visit the e-filing website again to upload and file the return. If you are a first time user or filing your returns for the first time then click on ‘New Registration’ and register yourself by providing the relevant information. One should make sure that email ID and mobile number is correctly mentioned while registering. This is because the I-T department sends all communication to you on your email. If you have already registered yourself then click on the ‘Registered user’.

Enter your user ID i.e. your PAN, password, Date of birth and enter ‘Captcha’ to sign in.

Click on ‘e-file’ tab and select the ‘Upload Return’ option.

After clicking the ‘Upload Return’ option, the website will direct you to page where you will be required to enter few details while uploading your ITR for the relevant year. Enter details required: the relevant assessment year, ITR form name, digital signature. PAN detail will be pre-filled.

Attach the ITR XML file using the browse button. (The same file which you have generated after filling the required information in excel/java utility software.)

Click on ‘digital signature certificate’ yes, if you are using this option. While using a digital signature, one should ensure that the signature is registered with the e-filing website

If you are using ‘digital signature’ option and click on the ‘Submit’ button, after all the information is entered, then the website will ask you to upload the pre-registered signature. Once the signature is uploaded successfully, the process of submitting ITR online is completed. The acknowledgement receipt will be sent to your email id. You’re not required to send the signed physical copy.

If you are not using digital signature then you will be required to verify your return using any of the options provided by the income tax department. Process of uploading return in xml format is the same as described above. Once the return is successfully uploaded in the XML format, go to ‘My Account’ tab and click ‘e-filed returns’ option. Here the website will show you the status of all the returns uploaded and filed (old and new) by you along with the status (processed, uploaded or pending for e-verification).

Once the return is uploaded, a person is required to verify his return using electronic verification code, Aadhaar OTP or by sending the signed acknowledgement copy (ITR-V) to CPC, Bengaluru.

If you wish to e-verify your return then go to ‘My account’ tab and select ‘e-verify’ option. A person can e-verify his return by using either Aadhaar OTP option or electronic verification code option.

Once the verification process is chosen and completed then the process of filing ITR completes. The I-T department will then process your verified returns and sent you an email confirmation stating the same.

IT Returns – Guide for e-Filing of Income Tax Return (ITR) Online

Income Tax, ITR, Save Tax Tips


IT Returns – Guide for e-Filing of Income Tax Return (ITR) Online

As per section 139(1) of the Income Tax Act, 1961 in the country, individuals whose total income during the previous year exceeds the maximum amount not chargeable to tax, should file their income tax returns (ITR).

The process of electronically filing income tax returns is known as e-filing. You can either seek professional help or file your returns yourself from the comfort of your home by registering on the income tax department website or other websites. The due date for filing tax returns (physical or online), is July 31st.

Who should e-file income tax returns?

Online filing of tax returns is easy and can be done by most assessees.

    • Assessee with a total income of Rs. 5 Lakhs and above.
    • Individual/HUF resident with assets located outside India.
    • An assessee required to furnish a report of audit specified under sections 10(23C) (IV), 10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB of the Act.
    • Assessee required to give a notice under Section 11(2) (a) to the assessing officer.
    • A firm (which does not come under the provisions of section 44AB), AOP, BOI, Artificial Juridical Person, Cooperative Society and Local Authority (ITR 5).
    • An assessee required to furnish returns U/S 139 (4B) (ITR 7).
    • A resident who has signing authority in any account located outside India.
    • A person who claims relief under sections 90 or 90A or deductions under section 91.
    • All companies.

Types of e-Filing:

      • Use Digital Signature Certificate (DSC) to e-file. It is mandatory to file IT forms using Digital Signature Certificate (DSC) by a chartered accountant.
      • If you e-file without DSC, ITR V form is generated, which should then be printed, signed and submitted to CPC, Bangalore by ordinary post or speed post within 120 days from the date of e-filing.
      • You can file e-file IT returns through an E-return Intermediary (ERI) with or without DSC.

    Checklist for e-Filing IT Returns

    There are a few prerequisites to filing your tax returns smoothly and effectively. Major points have been highlighted below.

      • How to choose the right form to file your taxes electronically
      • It can be confusing deciding which form to submit when filing your tax returns online. The different categories of Income Tax Return (ITR) forms and who they are meant for are tabulated below.
        ITR 1 (SAHAJ) Individuals with income from salary and interest
        ITR 2 Individuals and Hindu Undivided Families (HUF) not having income from business or profession
        ITR 3 Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
        ITR 4 Individuals and HUFs having income from a proprietary business or profession
        ITR 4S (SUGAM) Individuals/HUF having income from presumptive business
        ITR 5 Firms, AOPs,BOIs and LLP
        ITR 6 Companies other than companies claiming exemption under section 11
        ITR 7 Persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D

    • Check your tax credit – Form 26AS vs. Form 16You should check Form 26AS before filing your returns. It shows the amount of tax deducted from your salary and deposited with the IT department by your employer. You should ensure that the tax deducted from your income as per your Form 16 matches with the figures in Form 26AS. If you file your returns without clarity on errors, you will get a notice from the IT department.
    • Claim 80G, savings certificates and other deductionsYou can claim extra deductions if you forgot to claim them. Similarly, you can also claim deductions under section 80G on donations made to charitable institutions.
    • Interest statement – Interest on savings accounts and fixed depositsA deduction for up to Rs.10,000 is allowed on interest earned on savings accounts. However, interest earned on bank deposits, if any, forms a part of your taxable income and is taxable at applicable slab rates.
    • In addition to the above, have the following at hand.
      • Last year’s tax returns
      • Bank statements
      • TDS (Tax Deducted at Source) certificates
      • Profit and Loss (P&L) Account Statement, Balance Sheet and Audit Reports, if applicable
    • Ensure your system is equipped with the below.

      List of Required Documents for e-filing of tax returns

      It is always good to stay a step ahead, especially when it comes to tax filing. The checklist provided below will help you to get started with the e-filing of tax returns.

      General details:

      • Bank account details
      • PAN Number

      Reporting salary income:

      • Rent receipts for claiming HRA
      • Form 16
      • Pay slips

      Reporting House Property income:

      • Address of the house property
      • Details of the co-owners including their share in the mentioned property and PAN details
      • Certificate for home loan interest
      • Date when the construction was completed, in case under construction property was purchased
      • Name of the tenant and the rental income, in case the property is rented

      Reporting capital gains:

      • Stock trading statement is required along with purchase details if there are capital gains from selling the shares
      • In case a house or property is sold, you must sought sale price, purchase price, details of registration and capital gain details
      • Details of mutual fund statement, sale and purchase of equity funds, debt funds, ELSS and SIPs

      Reporting other income:

      • The income from interest is reported. In case of interest accumulated in savings account, bank account statements are required
      • Interest income from tax saving bonds and corporate bonds must be reported
      • The income details earned from post office deposit must be reported

      Income Tax Slab Rates

      Income Tax Slab rates For Financial Year 2017 – 2018 And Assessment Year 2018-2019

      (As Declared in the New Budget) :

      For Individuals and HUF (Age – Less than 60 years):

      Income Tax Slab Tax rate
      Up to Rs.2,50,000 NIL
      Above Rs.2,50,000 and up to Rs.5,00,000 5%
      Above Rs.5,00,000 and up to Rs.10,00,000 20%
      Above Rs.10,00,000 30%

      *10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.

      *15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.

      For Individuals and HUF (Age – 60 years and more, but less than 80 years):

      Income Tax Slab Tax rate
      Up to Rs.3,00,000 NIL
      Above Rs.3,00,000 and up to Rs.5,00,000 5%
      Above Rs.5,00,000 and up to Rs.10,00,000 20%
      Above Rs.10,00,000 30%

      *10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.

      *15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.

      For Super Senior Citizens (age – 80 years and more):

      Income Tax Slab Tax rate
      Up to Rs.5,00,000 NIL
      Above Rs.5,00,000 and up to Rs.10,00,000 20%
      Above Rs.10,00,000 30%

      *10% of tax will be imposed as surcharge in case the total income is between Rs.50 Lakhs and Rs.1 crore.

      *15% of tax will be imposed as surcharge in case the total income is above Rs.1 crore.

      Income Tax Slab Rates for Year 2016 – 2017 :

      For Individuals and HUF (Age – Less than 60 years):

      Income Tax Slab Tax Rate
      Up to Rs.2,50,000 NIL
      Above Rs.2,50,000 and up to Rs.5,00,000 10%
      Above Rs.5,00,000 and up to Rs.10,00,000 20%
      Above Rs.10,00,000 30%

      *12% surcharge is imposed in case the total income is above Rs.1 crore.

      For Senior Citizens (Age – 60 years and more, but less than 80 years):

      Income Tax Slab Tax Rate
      Up to Rs.3,00,000 NIL
      Above Rs.3,00,000 and up to Rs.5,00,000 10%
      Above Rs.5,00,000 and up to Rs.10,00,000 20%
      Above Rs.10,00,000 30%

      *12% surcharge is imposed in case the total income is above Rs.1 crore.

      For Super Senior Citizens (Age – 80 years and more):

      Income Tax Slab Tax Rate
      Up to Rs.5,00,000 NIL
      Above Rs.5,00,000 and up to Rs.10,00,000 20%
      Above Rs.10,00,000 30%

      *12% surcharge is imposed in case the total income is above Rs.1 crore.

      Income Tax Return Due Date:

      Generally, the due date for filing Income Tax Return (ITR) for Hindu Undivided Family (HUF)/ Individuals/ AOP (Association of Persons)/ BOI (Body of Individuals) is 31st July of the next Financial Year. For example – The ITR due date for Financial Year 2016-17 would be 31st July, 2017.

    Here is how you e-verify your income tax return

    Income Tax, ITR


    Here is how you e-verify your income tax return

    After filing income tax returns, you are supposed to get it verified. Earlier it was mandatory to send the physical copies to income tax department, now you can e-verify it in minutes.

    Your income tax return filing process is not complete until you have successfully verified your income tax return. Earlier, returns could be verified via posting the ITR-V or use of digital signatures.

    In a very welcome move the income tax department has now introduced several means to e-verify your income tax return. Your return can be verified by generating an EVC or electronic verification code. If you verify your return via EVC, you are no longer required to send the physical ITR-V. EVC is a 10 digit alphanumeric code and is unique to a PAN. One EVC code can validate only one return, so if you revise your return, you have to generate another EVC. This code can be obtained through various ways, lets understand them in detail –

    EVC through net banking –

    –Check if your bank is authorised by the income tax department for providing direct access to the government’s e-filing website. Also, your PAN must have been validated via KYC. You will need your internet banking password and login and transaction password to proceed. Once you login to bank’s site and request access to www.incometaxindiaefiling.gov.in, you will be able to generate an EVC which will be displayed on the screen and will also be sent to your registered mobile number. You can then e-verify your return with this EVC. This will be a big relief to Non Resident Indians who face distress with sending physical ITR-Vs if they don’t have digital signatures.

    EVC through Aadhaar OTP –

    Verification of your return through aadhaar is also done via the government’s e-filing website www.incometaxindiaefiling.gov.in. You have to link your aadhaar card from within the government’s site and then link it with your PAN on the website mentioned above. After aadhaar is authenticated & linked, an OTP will be sent to the taxpayer’s registered mobile number. And then this OTP can be used to verify the tax return. Do note that this OTP is valid for 10 minutes.

    The government has asked tax payers to mention their aadhaar number in the tax return. However, do note that mentioning your aadhaar number does not relieve you of e-verification of your tax return. Your return must be separately e-verified using any of the means mentioned here.

    EVC through ATM –

    Banks which have been registered with the income tax department for providing this service can be used for generating EVC through ATM machines. EVC can be generated by logging into the bank account via an ATM and selecting option ‘Generate EVC for income tax return filing’. The bank’s systems will then request the income tax department’s website to send an EVC to the taxpayers registered mobile number which can be then used for verifying your tax return. So if you are not able to login to your net banking for some reason, you will be able to generate an EVC through ATM, if your bank has been specified for this purpose by the tax department.

    EVC though the website -www.incometaxindiaefiling.gov.in 

    Where the tax payer’s gross total income less deductions is Rs 5 lakhs or less and there is no refund due to the tax payer, EVC can be generated from within the government’s tax filing website. Such EVC shall be sent to the registered email id and mobile number of the taxpayer. However, this option may be restricted based on the risk assessment the department has for a taxpayer, so use another method if you are unsuccessful.

    Physical ITR-V –

    Failure of all four options could be a streak of bad luck or possibly travails of a new system. Don’t lose sleep over it. You can still verify by sending your ITR-V using the old way of printing, signing and sending via speed post. Do remember though, this document must be sent within 120 days of your e-filing.

    Bear in mind that returns must be e-verified or a digital signature must be used, failing which your return submission would be considered incomplete and you may have to submit your return again.

    Recently, the CBDT has extended the timeline for submitting ITR-Vs for assessment years AY 2013-14 and AY 2014-15. The ITR-V for these assessment years can now be submitted up till 31st October 2015. This is applicable for your return for AY 2013-14 which has been filed on or after 1st April 2014 till 31st March 2015. And your return for AY 2014-15 which has been filed on or after 1st April 2014 till 30th June 2015.

    Which ITR form to fill for FY 2016-17 and tips on how to fill it

    Income Tax, ITR, Save Tax Tips


    Which ITR form to fill for FY 2016-17 and tips on how to fill it

    The Central Board of Direct Taxes (CBDT) notified tax return forms for the Financial Year (FY) 2016-17 on March 31, 2017.

    The government also mandated quoting of Aadhaar number/ Aadhaar enrolment number while filing the tax return if the same is filed on or after July 1, 2017.

    As per a recent notification dated May 11, 2017, relief from obtaining Aadhaar has been provided to below taxpayers:

    * Taxpayer residing in the states of Assam, Jammu and Kashmir and Meghalaya;

    * A Non-resident taxpayer as per Income-tax Act, 1961;

    * A taxpayer of the age of eighty years or more at any time during the previous year;

    * A taxpayer who is not a citizen of India.


    1. Below is a brief synopsis of the tax return forms applicable to an individual taxpayer for filing income tax return for the FY 2016-17:

    It is very important to file the correct tax return form, as filing of incorrect tax return form may make the tax return defective.

    Below is a table to help you pick the right form

    Applicability of the different ITR forms
    For ITR-1 Form, only the income which is eligible to be reported in ITR-1 can be clubbed with the income of the taxpayer. 
    For example, if spouse of the individual taxpayer has income only from other sources which needs to be clubbed, Form ITR-1 can be used to report such income. However, if the spouse has earned income from capital gains, then the individual taxpayer will have to file ITR-2. 


    2. Major changes from last year:

    A separate column has been inserted in all forms to disclose aggregate cash deposited in excess of INR 2 lakh during the demonetisation period i.e. 9 November 2016 to 30 December 2016.

    A. ITR-1 form

    * The form has been simplified and reduced to one pager;

    * ‘Asset and Liability’ schedule has been done away with in ITR-1 form since it is required to be filled only when the total income of the taxpayer is more than INR 50 lakh.

    B. ITR-2 form
    * ‘Asset and Liability’ schedule (applicable to individuals having total income more than INR 50 lakh) now requires reporting of additional information with respect to bank balance (including deposits) as on 31 March 2017, description and address of immovable assets, cost of shares and securities as on 31 March 2017, insurance policies, loans and advances given, interest held in assets of a firm or association of persons (AOP) as a partner or member etc.;

    * ‘Schedule IF (i.e. information regarding partnership firms in which the taxpayer is a partner) has been inserted to report details of the partnership firm in case the taxpayer is a partner in one;

    *’Schedule BP (i.e. details of income from firms in which the taxpayer is a partner)’ has been inserted to report details of income in the nature of salary, bonus, commission or remuneration received from partnership firms;

    * Under the ‘Schedule OS (i.e. Other Sources)’, additional information is sought with respect to cash credits, unexplained investments, unexplained money, unexplained expenditure, amount borrowed or repaid on hundi, dividend income from Indian companies in excess of INR 10 lakh, royalty income from patents etc.

    C. ITR-3 form

    * Under the ‘Schedule OS’, additional information is sought with respect to cash credits, unexplained investments, unexplained money, unexplained expenditure, amount borrowed or repaid on hundi, dividend income from Indian companies in excess of INR 10 lakh, royalty income from patents etc.


    3. General guidance on filling and submitting the tax return forms:

    * The name filled in the ITR form should be as per the Permanent Account Number (PAN) card;

    *The taxpayer should ensure that e-mail address, phone number and postal address are correctly stated in the tax return since the same are used by Income-tax Department for future correspondence with the taxpayer. Quoting of PIN code is mandatory;

    * Quote Aadhaar/ Aadhaar enrolment number (if applicable) if filing the tax return after 30 June 2017;

    * ITR-1 form can be filed in paper form only by:
    a) An individual of the age of 80 years or more at any time during the financial year for which the return is being filed ; or

    b) An individual or HUF whose income does not exceed INR 5 lakh and no refund is claimed in the return of income.

    * In case the return is filed in paper form, no document (including TDS certificate) should be attached to the return;

    * While filling ITR-1 in paper form, ITR-V should be duly filled;

    *All other return forms have to be filed electronically;

    * Check Form 26AS for income and taxes reported by the deductor so that there is no mismatch with the income and credit of taxes claimed in the tax return vis-à-vis Form 26AS;

    * Ensure that outstanding taxes are paid before filing the tax return and use correct challan to avoid mismatch;

    *Report all bank accounts held in India at any time during FY 2016-17 provided they have been operated in last three years. This includes reporting of joint accounts in which the taxpayer is the primary holder;

    * Bank balance (including deposits) and cash in hand as on 31 March needs to be reported in ‘Asset and Liability’ schedule. While a common man may not know exact amount of cash held physically on 31 March 2017, it should be ensured that the amount declared in the tax return can be reasonably justified in case of scrutiny by the Income-tax Department;

    * Foreign Asset schedule requires reporting of assets held outside India at any time during the relevant year only by a taxpayer qualifying as Resident and Ordinarily Resident of India. Since the Black Money Act 2015 imposes a stringent penalty of INR 10 lakh for non-disclosure of foreign assets and income, it is recommended to take help from a subject matter expert to avoid non-compliance in terms of type of asset to be reported and the value at which the asset should be reported;


    * As per the CBDT notification on foreign tax credit rules, a resident taxpayer claiming credit of taxes paid outside India on doubly taxed income should file Form 67 along with specified certificate or statement on or before the due date of filing the tax return. The manner to file Form 67 and certificate or statement is yet to be prescribed by the CBDT;

    * Reporting and disclosure requirement in ITR-3 form has been enhanced to ensure compliance by the taxpayers. However, a layman may not have complete details of requisite information sought in the tax return form and hence seeking help of a tax expert may be advisable;

    * Taxpayers should ensure that the tax returns they file are verified, either manually or electronically, within 120 days of filing to avoid annulment of the tax return;

    * In case the taxpayer wishes to manually verify the ITR-V form by sending a signed hard copy to CPC Bangalore, he should ensure that ITR-V is printed on A4 size paper and signed with blue ink only before sending to CPC Bangalore;

    * ITR-V can be e-verified by generating electronic verification code using Aadhaar, net banking, bank account number, demat account or registered e-mail address and mobile number etc. of the taxpayer;

    * Instructions for filling the tax return forms issued by CBDT and annexed to the relevant ITR form should be referred to before filing the tax return.

    Disclaimer : The facts and opinions written in this column are those of the author and do not reflect the views of economictimes.com