Income Tax

India’s taxation system is perceived to be the most complex globally. With the direct taxation laws in India constantly amending to reflect the changes in the economy and policy of the government, handling tax function in most companies can be challenging. There are number of additional restrictions on domestic as well as international transaction between companies. It becomes imperative to manage the tax in order meet the deadlines of income tax compliances.

Returns Applicable on Individuals, Firms & Body Corporates

1. ITR-1 (SAHAJ) – Applicable for Individual

This return is applicable for a Resident (other than Not Ordinarily Resident) Individual having Total Income from any of the following sources up to ₹ 50 lakh. Generally, Salary / Pension, One house Property, Other sources (Interest, Family Pension, Dividend etc.) and Agricultural Income up to ₹ 5,000 are considered in ITR-1.

Note: ITR-1 cannot be used by a person who:

(a) is a Director in a company

(b) has held any unlisted equity shares at any time during the previous year

(d) has signing authority in any account located outside India

(e) has income from any source outside India

(f) is a person in whose case tax has been deducted u/s 194N

(g) is a person in whose case payment or deduction of tax has been deferred on ESOP

(h) who has any brought forward loss or loss to be carried forward under any head of income

2. ITR-2 - Applicable for Individual and HUF

This return is applicable for Individual and Hindu Undivided Family (HUF)
Not having Income under the head Profits and Gains of Business or Profession
Who is not eligible for filing ITR-1

3. ITR-3- Applicable for Individual and HUF

This return is applicable for Individual and Hindu Undivided Family (HUF)
Having Income under the head Profits and Gains of Business or Profession
Who is not eligible for filing ITR-1, 2 or 4

4. ITR-4 (SUGAM) – Applicable for Individual, HUF and Firm (other than LLP)

This return is applicable for an Individual or Hindu Undivided Family (HUF), who is Resident other than Not Ordinarily Resident or a Firm (other than LLP) which is a Resident having Total Income up to ₹ 50 lakh and having income from Business or Profession which is computed on a presumptive basis (u/s 44AD / 44ADA / 44AE) and income from any of the following sources such as Salary / Pension, One House Property, Other sources (Interest, Family Pension, Dividend etc.) and Agricultural Income up to ₹ 5,000.

Note: ITR-4 cannot be used by a person who:

is a Director in a company
has held any unlisted equity shares at any time during the previous year
has any asset (including financial interest in any entity) located outside India
has signing authority in any account located outside India
has income from any source outside India
is a person in whose case payment or deduction of tax has been deferred on ESOP
who has any brought forward loss or loss to be carried forward under any head of income

Please note that ITR-4 (Sugam) is not mandatory. It is a simplified return form to be used by an Assessee, at his option, if he is eligible to declare Profits and Gains from Business or Profession on presumptive basis u/s 44AD, 44

5. ITR-5 Applicable for Firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals), Artificial Juridical Person (AJP), co-operative society

ITR – 5 form is applicable on firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals), Artificial Juridical Person (AJP), co-operative society, Estate of deceased, Estate of insolvent, Business trust and investment fund, subject to some conditions.

6. ITR-6 Form

ITR 6 is a tax return form for all the companies which are not claiming the exemption u/s 11 (Income from property held for charitable or religious purposes).

7. ITR-7 Form

ITR 7 Form is meant for all the Charitable /Religious trust u/s 139 (4A), Political party u/s 139 (4B), Scientific research institutions u/s 139 (4C), University or Colleges or Institutions or Khadi and Village industries u/s 139 (4D) which are requiring the exemptions.

Forms Applicable on Individuals, Firms, Body Corporates and Others

1. Form 16 - Certificate of Tax Deducted at Source on Salary

Provided by An Employer(s) to his Employee at the end of the financial year.

Details provided in the form is related to Income of the such person, Deductions / Exemptions and Tax Deducted at Source for the purpose of Computing Tax Payable / Refundable.

2. Form 16A – Certificate for TDS on Income other than Salary

Provided by TDS Deductor to Deductee.

In the form Form 16A is a Tax Deducted at Source (TDS) Certificate issued quarterly that captures the amount of TDS, Nature of Payments and the TDS Payments deposited with the Income Tax Department

3. Form 26AS - Annual Information Statement

Provided by Income Tax Department (It is available in TRACES portal that may be accessible after logging on to Income Tax e-Filing portal or Internet Banking)

Form 26AS disclosed the information related to Tax Deducted / Collected at Source, Advance Tax / Self Assessment Tax paid, Specified Financial Transactions, Demand / Refund and Pending / Completed Proceedings

4. Form 15G - Declaration by resident taxpayer (not being a Company or Firm) claiming certain receipts without deduction of tax

Submitted by A Resident Individual less than 60 years or HUF or any other Person (other than Company / Firm) to Bank for not deducting TDS on Interest Income if the income is below basic exemption limit.

In Form 15G Assessee need to furnish estimated income for the respective FY.

5. Form 15H - Declaration to be made by a resident individual (who is sixty years age or more) claiming certain receipts without deduction of tax

Submitted by A Resident Individual, 60 years or more to Bank for not deducting TDS on Interest Income.

In Form 15H Assessee need to furnish estimated income for the respective FY.

Get Multiple Benefits of Filing Income Tax Return on time

Easy Loan Approval

Filing the ITR will help individuals, when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), House Loan etc. All major banks can ask for a copy of tax returns as a proof of income statement. This is a mandatory document for the loan approval.

Claim Tax Refund

There can be instances when tax has been deducted (TDS) from your income even when your total taxable income is less than the basic exemption limit and you have nil tax liability for that year. In such a case, you will have to claim TDS refund for which you will have to file an Income Tax Return mandatorily.

Income & Address Proof

Income Tax Return can be used as proof of your Income and Address.

Quick Visa Processing

Most embassies & consultants require you to furnish copies of your tax returns for the past couple of years at the time of the visa application. These are amongst mandatorily required documents and hence it is always advisable to timely file your ITR.

Carry Forward Your Losses

If you file the return within the original due date, you will be able to carry forward losses to subsequent years, which can be used to set off against the income of subsequent years. This means you can deduct certain losses from the relevant income which will help you reduce your tax liability of the future income. This is not possible without filing of the income tax return.

Avoid Penalty

If you are required to file your tax returns according to the income tax act, but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000.

We Recognised among best tax advisors in Delhi, Pointax can advise you on all direct tax-related matters and offer you services like income tax assessment, tax assessment, income tax notice, income tax filling in India, with innovative tax efficient strategies, identifying the tax risks associated with your business and evaluating them in order to execute effective controls in time. With a myopic vision for the development of client businesses, we can collaborate with you in each exercise to deliver productive results.

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