Income Tax

Electoral Trusts Scheme, 2013 was notified by the Central Board of Direct Taxes (CBDT). An Electoral Trust is a Trust set up by companies with the sole objective to distribute the contributions received by it from other Companies and individuals to the political parties. Only the companies registered under Section 25 of the Companies Act, 1956 are eligible to make an application for approval as an Electoral Trust. The electoral trusts have to apply for renewal every three financial years. The scheme lays down a procedure for grant of approval to an electoral trust which will receive voluntary contributions and distribute the same to the political parties. The provisions related to the electoral trust are under Income-tax Act, 1961 and Income tax rules-1962. Definition and Purpose Electoral Trusts in India are established under Section 25 of the Companies Act as non-profit entities with the principal aim to ensure transparent and accountable political funding. These trusts facilitate the orderly receipt and distribution of voluntary contributions to political parties registered under Section 29A of the Representation of the People Act, 1951. The primary objective of these trusts is to enhance transparency and reduce potential conflicts of interest by serving as a neutral intermediary in the funding of political parties. Contributions to Electoral Trusts Electoral Trust can receive contributions from various sectors. The following categories of persons can contribute to an electoral trust: Indian citizens Domestic companies which are registered in India Firm or Hindu Undivided Family Group of persons or individuals, who reside in India. An electoral trust cannot accept contributions from: Any person who is not an Indian Citizen. Foreign Entity. Any other electoral trust. Mechanism for Distribution of Funds For administrative expenses, the Electoral Trusts are permitted to set aside a maximum of 5% of the total funds collected during a financial year. The remaining 95% of total income of the Trusts is required to be distributed to eligible political parties. Parties registered under the Representation of the People Act, 1951 are eligible to receive the contributions. Electoral trust are required to keep and maintain books of account including details of receipts, distribution and list of donors and receivers. Procedure for Accepting Contributions An electoral trust can accept contributions only by cheque, demand draft or account transfer to the bank. An electoral trust after receiving the contribution must allocate the same to the political parties. Thus, the job of the trust would be to merely receive it and donate it to the concerned parties. However, as already observed, they cannot donate to any other trust. Receipt for Contribution On receiving any contribution, an electoral trust must provide a receipt mentioning the following: Name and address of the contributor. Permanent account number of the contributor or passport number in the case of a citizen who is not a resident. Amount and mode of contribution including name and branch of the Bank and date of receipt of such contribution. Name the electoral trust. Permanent account number of the electoral trust. Date and number of approval by the prescribed authority. Name and designation of the person issuing the receipt. Electoral Trust Administration An electoral trust can distribute funds only to the eligible political parties. However, the electoral trust can for the purposes of managing its affairs, spend up to 5% of the total contributions received in a year subject to an aggregate limit of Rs.5 lakhs in the first year of incorporation and a sum of Rs.3 lakhs in subsequent years. Distributable Contributions The total contributions received in any financial year along with the surplus from any earlier financial year, if any, on managing its affairs, will be the total amount of distributable contributions for the financial year. An electoral trust will be required to distribute the distributable contributions received in a financial year. Moreover, an electoral trust is required to distribute at least 95% of the total contributions received during the financial year along with the surplus brought forward from earlier financial years to the eligible political parties before 31st March of the concerned financial year. Record Keeping All electoral trust are required to keep and maintain a regular record of proceedings of all meetings and decisions taken, books of account and other documents in reference to its receipts, distributions, and expenditure. The electoral trust should also maintain a list of persons from whom contributions have been received and to whom the same have been distributed. Auditing Records Electoral Trust audit must be conducted and the audit report would be furnished in Form No. 10BC along with its Annexure to the Commissioner of Income Tax or the Director of Income Tax as per its jurisdiction. All electoral trust are required to furnish a certified copy of the list of contributors and a list of political parties to whom sums were distributed. Government Oversight and Guidelines The governance of Electoral Trusts is heavily regulated, with the Central Board of Direct Taxes (CBDT) playing a pivotal role. The CBDT, under the Electoral Trust Scheme 2013, specifies the operational guidelines and approval procedures for these trusts. An electoral trust must apply to the CBDT for approval, which can be granted for up to three years but may be withdrawn if the trust fails to comply with the regulations or ceases to operate legitimately. FAQs What is an Electoral Trust? An Electoral Trust is a non-profit organization formed in India to receive voluntary contributions from individuals, companies, or other entities. These contributions are then distributed to political parties to promote transparency in the funding of elections. How does an Electoral Trust work? An Electoral Trust collects donations from various sources and distributes them to registered political parties. The trust is required to distribute at least 95% of the total contributions received to political parties, ensuring transparency and accountability in political funding.

TR filing is mandatory for individuals who have an annual income exceeding the basic exemption limit. There are various types of Income Tax return forms that taxpayers have to fill to complete e filing Income Tax Return process. These ITR forms are classified on the basis of the nature of income. However, the ITR form required in each case is different, and it can be confusing to select the right one. Before filing an ITR, any taxpayer can assess their tax liability and make payments. For instance, in the event of a failure carryforward and setoff of brought-over losses, you can file an ITR. Check form 26AS for information on TDS and other taxes, such as FD interest, while filing your ITR. You’ll just use your Form 16 to fill out the particulars of your income and tax-saving deduction statements. What are ITR forms? ITR is a prescribed form through which you communicate the details of your income earned, deductions claimed, and taxes paid in a financial year to the Income Tax Department. It also allows you to carry forward the losses and claim a refund from the Income Tax Department. Different ITR forms are prescribed for different categories of taxpayers (individual, HUF, company, LLP, Partnership firms, etc). The department has notified seven various form types prescribed for different categories of taxpayers (individual, HUF, company, LLP, Partnership firms, etc). The department has notified 7 various forms, i.e., ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 & ITR-7, till date. The selection will depend upon the Taxpayer’s status, Nature of income, Residential Status in India, etc. Types of ITR  ITR 1 Who Can File ITR 1? This form is for a resident individual whose total income includes- Income earned from salary or Pension. Income from other sources, excluding income from winning a lottery or income from owning and maintaining race horses, income taxable under section 115BBDA or section 115E. However, income from One House Property, in this form, the loss brought forward from previous years or carried forward of losses are not eligible. Income from agriculture activities up to Rs 5000. The total income of the individual should not exceed 50 Lakhs. Who Cannot File ITR 1(Sahaj)? Non-Resident Not Ordinarily Resident A person having a business or profession Anyone having a total income exceeding Rs 50 lakhs If you own more than one house property Income arising from Winnings from Lottery or Race Horses, Gambling, or speculation income An assessee having Capital Gains income Individuals having a financial interest in assets located outside India, which includes any signing authority for accounts held outside India. Person having foreign income or claiming relief u/s 90/90A/91 for taxes paid in foreign country Loss under income from other sources One who desires to carry forward or bring forward loss under income from house property. An individual who is holding the position of a Director in a company An Individual who has held any unlisted equity shares at any time during the previous year Agricultural income exceeding Rs. 5,000/- Any claim of credit of TDS in the hands of any other person Any tax has been deducted under Section 194N In cases where payment or deduction of tax has been deferred on ESOP  ITR 2  Who Can File ITR 2? This form is for individuals or a HUF (Hindu Undivided Family) whose income includes: Income from salary or Pension Income from House Property(one or more) Income from other sources, including income from winning a lottery, income from owning and maintaining horse races, or income taxable at special rates. Persons who had investments in unlisted equity shares at any time during the entire financial year. An individual who is a director in a company. An individual who is a Resident(ROR/RNOR)or non-resident. Income earned from capital gains Income from foreign assets/ other foreign income. Agricultural income of more than Rs 5,000/- Incomes where clubbing provisions are applicable Individuals having a financial interest in assets located outside India, which includes any signing authority for accounts held outside India. One who desires to carry forward or bring forward loss under income from house property. Any tax has been deducted under Section 194N In cases where payment or deduction of tax has been deferred on ESOP(Total income can exceed 50 lakhs in this ITR Form) Who Cannot File ITR 2? Individuals or HUFs whose accruing income is from business or profession Partner of a partnership firm having income from a partnership. ITR 3  Who Can File ITR 3? This form is to be used by either an individual or a Hindu Undivided Family who are carrying on a profession or a business. The following persons are eligible to fill this form: The residential status can be either Non-resident or Resident(ROR/RNOR) If a person is the director of the company. Persons who had investments in unlisted equity shares at any time during the entire financial year. Income from other sources Income of a person who is a partner in a firm. Income from salary or Pension Income from House Property(one or more) Total income can exceed 50 lakhs in this case. Income earned from capital gains or foreign assets/foreign income. who has income under the head profits or gains of business or profession and who is not eligible to file Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam). In short, individuals or HUFs who are not eligible to file ITR-1, ITR-2, and ITR-4 should file ITR-3 Who Cannot File ITR 3? Companies Trusts Co-operative Society Local Authority Artificial Juridical Person Firm including LLP AOP, BOI ITR 4  Who Can File ITR 4? This form is applicable to both the resident individuals and HUFs. Other than LLPs, all partnership firms which are residents and have an income which is either professional or from business. Those persons who have opted for a presumptive income scheme according to Section 44AD, Section 44AE, and Section 44ADA of the Income Tax Act. If the person’s business turnover exceeds Rs. 2 crores, then he is required to file ITR-3 with

Under the Income Tax Act of India, Section 80CCD is a provision that allows individuals to get a tax deduction for contributions made to their pension account, including the National Pension Scheme (NPS) and the Atal Pension Yojana (APY). Section 80CCD is a provision in the Income Tax Act that offers a deduction for taxpayers earning pension income related to the National Pension Scheme. Section 80CCD is incorporated into Chapter VI-A of the Income Tax Act, which provides deductions for assessees corresponding to various expenditures, subject to the satisfaction of the specified conditions. The section provides deductions for the contribution to pension schemes governed by the Central Government, including the National Pension Scheme (NPS). What is Section 80CCD? Section 80CCD deduction can be availed by taxpayers contributing to a pension fund like the National Pension Scheme or Atal Pension Yojana. In the case of employment, up to 10% of the salary in the previous year can be claimed as a deduction. For all other cases, 10% of the gross total income in the previous year is allowed as a deduction. In addition to claiming a deduction under Section 80CCD, taxpayers can also claim a deduction of up to Rs.50,000 for contributions to the National Pension Scheme. The deduction for contribution to the National Pension Scheme is admissible over and above the ceiling of deduction of Rs.1.5 lakhs under sections 80C, 80CCC and 80CCD. Section 80CCD subsections Sub-section 80CCD(1) Sub-section 80CCD defined the various rules concerning the income tax deduction offered to members of the NPS. This subsection applies to everyone, irrespective of who made the contribution, be it a government employee, a private employee or a self-employed individual. The provisions prescribed under this Section apply to every Indian citizen between the ages of 18 and 60 years who is a member of the NPS and has been contributing consistently. This section is also applicable to Non-Resident Indians. The following are the key provisions stated under Section 80CCD(1): The maximum deduction permissible under Section 80CCD(1) is 10% of an individual’s salary (Basic Salary + Dearness Allowance) or 10% of their gross income. From Financial Year 2017-18, this limit has been increased for self-employed individuals from 10% to 20% of the Gross Total Income, with the maximum limit capped at INR 1.5 Lakhs for a given financial year. The new amendment of Section 80 CCD that was introduced as Sub-section 1B in the Union Budget 2015 mentions that individuals may also claim an additional deduction of INR 50,000. The benefit is offered to both salaried as well as self-employed individuals. Therefore, this raises the maximum deduction available under Section 80CCD to INR 2 Lakhs. Tax benefits under Section 80CCD (1B) may be claimed over and above the deductions prescribed under Section 80CCD(1). Sub-section 80CCD(2) The provisions prescribed in Section 80 CCD(2) come into effect when an employer contributes to the NPS fund of their employee. An employer can contribute to the NPS along with those made towards EPF and PPF. The contributions made by an employer may be equal to or higher than that of the employee. This section is only applicable to salaried individuals and not to self-employed individuals. The tax deductions under this Section may exceed those prescribed under Section 80 CCD(1). Section 80CCD(2) permits salaried individuals to claim deductions up to 10% of their salary. This salary would include the basic pay along with their dearness allowance or is equal to the contributions made by their employer towards the NPS. Sub-section 80CCD(3) When any amount standing to the credit of the assessee in his account referred to in Section 80CCD(1) or (1B), in which a deduction has been approved under those sub-sections or section CCD(2), together with the amount accrued thereon, if any, is obtained by the assessee or nominee, in whole or in part, in the previous year. As the pension received from the annuity plan purchased on such closure or opting out, the whole of the amount referred to in clause (a) or (b) would be deemed to be the income of the assessee or nominee, as the case may be, in which such amount is received in the previous year, and would be charged to tax as income of that previous year. The amount that is received by the nominee, on the death of the assessee, under the circumstances that referred in clause (a) would not be deemed into the income of the nominee. Any payment obtained from the National Pension System Trust to an employee on account of closure or his opting for the pension scheme referred to in Section 80 CCD, to the extent that it does not exceed more than 40% of the total amount that is payable to him during the closure or his opting out of the scheme, would be exempt from tax as per Section 10(12A). Section 10(12A) As per the amendment, any payment from the National Pension System Trust to an employee under the Pension Scheme referred to in Section 80CCD, on partial withdrawal that is made out of his income account in accordance with the specific terms mentioned under the Pension Fund Regulatory & Development Authority Act, 2013, and the provisions made thereon, to the extent it does not exceed 25% of the amount of the contribution. Deduction for Contribution to the NPS The Union Budget of 2015 improved the scope of tax benefits offered under Section 80CCD of the Income Tax Act to attract more members to the NPS and make relevant investments. The latest amendments helped increase the deduction limit from INR 1 Lakh to INR 1.5 Lakhs under Section 80CCD(1A). As per the new Sub-section 1B, an additional deduction of up to INR 50,000 was provided. These additional tax benefits are offered over and above the deduction limit prescribed under Section 80C of the Income Tax Act. The contribution made by the employer would also be allowed as a deduction under Section 80CCD(2) while calculating the total income of the employee. The deduction amount under this section should not exceed 14% of the salary in the case of Central

Section 80C of the Income Tax Act allows for certain expenditures and investments to be exempt from income tax. If you plan your investments across different financial assets such as PPF, NSC, ELSS, etc., you can claim deductions of up to Rs.1.5 lakh under Section 80C, thereby lowering your tax liability. Section 80C of the Income Tax Act of India is a clause that points to various expenditures and investments that are exempted from Income Tax. It allows for a maximum deduction of up to Rs 1.5 lakh every year from an individual’s total taxable income. Tax exemptions for investment under 80C are applicable only for individual taxpayers and Hindu Undivided Families. Corporate bodies, partnership firms, and other businesses are not qualified to avail of tax exemptions under Section 80C.  What is 80C in Income Tax and its Sub-sections Section 80C of the Income Tax Act in India lets you reduce your taxable income by up to Rs. 1.5 lakh per year. This benefit applies to investments you make in things like Employee Provident Funds (EPF), Public Provident Funds (PPF), life insurance premiums, and certain mutual funds. It also covers expenses on your children’s tuition fees and principal repayment of your home loan. Section 80C permits certain investments and expenses to be tax-exempted. By well-planning the 80C investments that are spread diversely across various options like NSC, ULIP, PPF, etc., an individual can claim deductions up to Rs 1,50,000. By taking tax benefits under 80C, one can avail of a reduction in tax burden. Under the Income Tax Act of India, deductions under Section 80C of Income Tax Act are divided into certain sub-sections. These are –  80C Deduction List – Tax Saving Sections  Eligible Investments for Tax Exemptions Section 80C Investments in Provident Funds such as EPF, PPF, etc., payments made towards life insurance premiums, Equity Linked Saving Schemes, payments made towards the principal sum of a home loan, SSY, NSC, SCSS, etc. Section 80CCC Payment made towards pension plans, as well as mutual funds. Section 80CCD(1) Payments made towards certain Government-backed schemes such as the National Pension System, Atal Pension Yojana, etc. Section 80CCD(1B) Investments of up to Rs.50,000 in NPS are considered for exemption under this section. Section 80CCD(2) Employer’s contribution towards NPS (up to 10%, comprising basic salary and dearness allowance, if any) is exempted under this category.  Eligibility of Deduction Under 80C of Income Tax Act Individuals and HUFs are both eligible for Section 80C deductions. This section also applies to both Indian residents and non-resident Indians. Companies, partnerships, and other corporate bodies are not eligible for the deduction. Investments Eligible for Deduction Under Section 80C of the Income Tax Act Here are some of the 80C tax saving options an individual can opt for- Investment options Interest Minimum lock-in period Assured Return Associated Risk ELSS  12% to 15% (depending on market fluctuation) 3 years No High NPS 8% to 10% Till the investor reaches 60 years of age (retirement) No High SCSS 8.20% 5 years Yes low PPF 7.10% 15 years Yes Low NSC 7.7% 5 years Yes Low ULIP 8% to 10% (depending on market fluctuation) 5 years No Moderate Fixed Deposit Up to 8.40% 5 years Yes Low Sukanya Samriddhi Yojana 8.20% 8 years Yes Low Life Insurance Premiums Premiums paid towards life insurance policies are eligible to receive tax benefits as per 80C limit. These exemptions are available against policies held by self, spouse, dependent children, etc. Hindu Undivided Family members can also benefit from the same exemptions.  Currently, an annual premium of up to 10% (of the insurance policy’s total sum assured) is tax exempted under this scheme. This clause was revised on 1st April 2012, prior to which premiums of up to 20% (of the sum assured) were liable for tax exemption under Section 80C deduction. Public Provident Fund Any contribution towards the Public Provident Fund (PPF) can be filed for tax deduction under Section 80C. Public Provident Funds come with a maximum deposit limit of Rs.1,50,000, allowing an investor to claim the entire deposited amount as an exemption under this Income Tax Act.  Any voluntary contribution made by the employee towards the provided fund is also eligible for tax deduction under Section 80C of the Income Tax Act. NABARD Rural Bonds  NABARD stands for National Bank for Agriculture and Rural Development. Rural Bonds offered by NABARD are eligible for tax exemption under the Income Tax Act of India. The maximum deductible amount is capped at Rs.1.5 lakh under Section 80C.  Unit Linked Insurance Plans (ULIPs)  Unit Linked Insurance Plans offer more returns in the long term when compared to conventional insurance policies. They have become especially popular in recent years thanks to the tax benefits offered under Section 80C of the Income Tax Act 1961. Investors can avail of tax exemptions up to Rs. 1.5 lakh on the invested amount u/s 80C income tax provisions. National Savings Certificate  NSC, or National Savings Certificate, is one of the most popular tax-saving instruments for risk-avert individuals. Interest earned on NSC is compounded semi-annually, and the maximum maturity period ranges from 5 to 10 years. Investors do not have to follow any limitation on the total sum invested towards NSC in a financial year; however, only a maximum of Rs.1.5 lakh will be subject to exemption every financial year under Section 80C.  Tax Saving FD Tax Saving FDs are fixed deposit schemes offered by both banks and post offices that allow tax deduction under Section 80C. These FDs have a lock-in period of 5 years and offer a maximum of Rs 1.5 lakh tax exemption (on the principal amount). However, the returns of such instruments are liable for taxation.  EPF The return earned from Employee Provident Fund (EPF), including the interest, is eligible for tax exemption under Section 80C of the Income Tax Act, 1961. It is only eligible for employees who have continued his or her service for at least 5 years. If individuals make voluntary contributions to their EPF accounts, such an amount is eligible for tax exemptions under Section 80C.  Infrastructure Bonds Section

Tax Credit Statement or Form 26AS is an important document for tax filing. Gone are the days when one has to download Form 26AS to file IT returns manually. The scope of the statement has now been expanded to include details of foreign remittances, mutual funds purchases, dividends, refund details, etc.  Form 26AS gives a consolidated record of every tax-related information associated with your PAN (Permanent Account Number). It can be viewed and downloaded easily from the TRACES website. It is useful to verify the contents of the TDS certificate and ensure that the TDS deducted from your income is actually deposited with the income tax department. What is Form 26AS Form 26AS means a Tax Credit Statement and is an important document for taxpayers. 26AS full form is Annual Information Statement (AIS). Form 26AS provides a detailed overview of your financial activities for a specific year, going beyond just TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) transactions. It serves as proof of income and tax payments, linked to your PAN number. Based on the details mentioned in Form 26AS, the taxpayers file annual returns. When filing your tax return, verify that the taxes you claim match the tax values stated in Form 26AS. Information Available on Form 26AS Details of tax deducted at source Details of tax collected source *Advance tax paid by the taxpayer *Self-assessment tax payments *Regular assessment tax deposited by the taxpayers (PAN holders) *Details of income tax refund received by you during the financial year *Details of the high-value transactions regarding shares, mutual funds, etc. Details of tax deducted on sale of immovable property Details of TDS defaults (after processing TDS return) made during the year Turnover details reported in GSTR-3B Structure and Parts of Form 26AS (From FY 2022-23 and onwards) PART-I Details of Tax Deducted at Source TDS on salary, business, profession, interest income etc., shall be reported here PART-II Details of Tax Deducted at Source for 15G/15H TDS on which no TDS is made because of Form 15G/15H due to income being less than the basic exemption limit. Mainly applicable for senior citizen taxpayers PART-III Details of Transactions under Proviso to section 194B/First Proviso to sub-section (1) of section 194R/ Proviso to sub-section(1) of section 194S TDS made on payment made in kind (car in a lottery, foreign trips for meeting sales targets etc.) PART-IV Details of Tax Deducted at Source u/s 194IA/ 194IB / 194M/ 194S (For Seller/Landlord of Property/Contractors or Professionals/ Seller of Virtual Digital Asset) TDS made on sale of house property/rent payment in excess of Rs. 50,000 per month, payment to a contractor/professional services in excess of Rs.50 lakhs/sale of virtual digital asset (cryptocurrency) PART-V Details of Transactions under Proviso to sub-section(1) of section 194S as per Form-26QE (For Seller of Virtual Digital Asset) PART-VI Details of Tax Collected at Source TCS made under various sections of 206C PART-VII Details of Paid Refund (For which source is CPC TDS. For other details refer AIS at E-filing portal) PART-VIII Details of Tax Deducted at Source u/s 194IA/ 194IB /194M/194S (For Buyer/Tenant of Property /Person making payment to contractors or Professionals / Buyer of Virtual Digital Asset) These details consist of the TDS made by you in relation to the purchase of house property/rent payment in excess of Rs. 50,000 per month, payment to a contractor/professional services in excess of Rs.50 lakhs/purchase of virtual digital asset (cryptocurrency). This is just for information purposes.  PART-IX Details of Transactions/Demand Payments under Proviso to sub-section(1) of section 194S as per Form 26QE (For Buyer of Virtual Digital Asset) PART-X TDS/TCS Defaults* (Processing of Statements) TDS defaults value (after processing of TDS returns) but do not include demands raised by the assessing officer. For any clarification regarding Form 26AS, contact the authorities as mentioned below: Part of Form 26AS Contact in case of any clarification I Deductor II Deductor III Deductor IV Deductor V Buyer VI Collector VII Assessing Officer / Bank VIII NSDL / E-Filing/ Concerned Bank Branch IX E-Filing/ Concerned Bank Branch/Seller X Deductor How to View Form 26AS? You can view Form 26AS through the following two modes: The TRACES portal The net banking facility of your bank account FAQs How do I download the Tax Credit Statement or Form 26AS? To view or download Form 26AS, log in with your income tax portal account credentials. Go to the ‘e-File’ tab on the home page, click ‘Income Tax Returns’ from the drop-down, and select ‘View Form 26AS’.  Read the disclaimer and click on ‘Confirm’, and you will be redirected to the TRACES portal. Agree to the acceptance and usage of Form 16/16A generated from TRACES, and click on the ‘Proceed’ button.  Now, click ‘view tax credit (Form 26AS)’ to view Form 26AS.  Select the ‘Assessment Year’ and ‘View type’ (HTML, Text or PDF).  Click on the ‘View/Download’ button.  Form 26AS will open up on the screen. If you want to download it as PDF, click on the ‘Export PDF’ button. A PDF file of the Form 26AS will be downloaded. How to check Form 26AS online without login? To view or download Form 26AS from the income tax e-filing portal, you must register yourself. However, if you wish to download without login, you can do the same through your net banking facility of the authorised bank where your account is maintained. Login to your net banking account using your internet banking login credentials and click on the ‘Tax Credit Statement’ to view details.

Form 16 is a TDS certificate that shows the salary earned and the TDS deducted from your salary. It is issued by the employer before June 15th every year, after the end of the financial year in which the income was earned. Keep in mind that you should receive Form 16 from all the employers you have worked with.  Form 16 plays a very important role when it comes to filing income tax returns for salaried individuals. It has two components: Part A and Part B. What is Form 16? Form 16 is a certificate issued to salaried employees by their employer that provides a detailed summary of TDS deducted and deposited to the Income tax authorities. Form 16 is an important document issued under the Income Tax Act of 1961 provisions. Each salaried employee can obtain Form 16 from the employer on or before the 15th of June of the following year, immediately after the financial year in which the tax is deducted. If any employer delays or fails to issue Form 16 by the specified date, he is liable to pay a penalty of Rs.100 per day until the default continues. Employers are required to issue Form 16 to their salaried employees on or before the 15th of June of the assessment year for which the income tax return is being filed. For example, for the financial year 2023-24 (assessment year 2024-25), Form 16 should be issued by 15th June 2024. Types of Form 16 There are two types of Form 16: Form 16A and Form 16B. Both are related to Tax Deducted at Source (TDS), but they serve different purposes. Here is what each form is used for: Form 16A: Form 16A is a certificate for Tax Deducted at source (TDS) and is provided along with Form 16. Both Form 16 & 16A are TDS certificates, but Form 16 is for individuals who receive income from salary. On the other hand, Form 16A is for all incomes other than salary. Form 16B: Form 16B is a certificate of tax deducted on the purchase of property; TDS under section 194IA is required to be deducted when a person buys an immovable property for consideration greater than 50 lakhs of rupees. In such a case, the buyer will be required to deduct the TDS of the seller and file form 26QB; after filing 26QB, form 16B will be generated, which serves the basic purpose of the TDS certificate depicting the basic details of the buyer and seller of property and consideration and amount of TDS deduction. What are the Components of Form 16? Part A: This section contains details such as the employer’s and employee’s PAN (Permanent Account Number), employer’s TAN (Tax Deduction and Collection Account Number), summary of tax deducted and deposited by the employer (TDS), and other relevant details. Part A consists of the following – Name and Address of the employer PAN and TAN of the employer Employee’s PAN Quarterly summary of total salary payments for the relevant FY. Summary of quarterly tax deducted and deposited as certified by the employer. Part B: Part B provides a more detailed picture of your income like the employee’s salary, allowances, deductions claimed by the employee (such as under Section 80C, 80D, etc.), and the resultant taxable income. It is an annexure to part A. It also includes details of income from other sources, if any. Some constituents of Part B are – Detailed breakup of salary Detailed breakup of allowances exempted under section 10 Deductions allowed under the IT Act under Chapter VI-A TDS deducted by the employer What is Form 16A? Form 16A is also a TDS Certificate. While Form 16 is for only salary income, Form 16A is applicable for TDS on ‘Income Other than Salary’. For example, a Form 16A shall be issued to you – when a bank deducts TDS on your interest income from fixed deposits, for TDS deducted on insurance commission, for TDS deducted on your rent receipts. In fact, when TDS is deducted from any other income you receive, that is liable for such deduction. This certificate also has details of the name and address of the deductor/deductee, PAN/TAN details, and challan details of the TDS deposited. It also has details of income you have earned and the TDS deducted and deposited on such income. All details that are there in Form 16A are available on Form 26AS.  What are the Components of Form 16A? Form 16A includes details like: Employer’s name, PAN and TAN Employee’s name, PAN and TAN Payment details TDS payment number Date of deposit and deposited tax amount These details are also available in Form 26AS.  Difference between Form 16 and Form 16A Parameters Form 16 Form 16A Eligibility Individuals with salary Professionals and self-employed individuals Issuer The employer Financial institutions, tenants, banks, etc. Issued against salaried individuals Non-salaried Issuance frequency  Annual Quarterly Applies to Salary Income  Income from Rent, professional charges, commission agents, hired machinery, etc. Law Section 203 of the Income Tax Act Section 203 of the Income Tax Act What is the Use of Form 16 in Income Tax Return Filing? Form 16 serves as a vital document for salaried individuals when filing their income tax returns. It provides key information about the employee’s salary, TDS, and deductions. It shows the breakup of salary income and the TDS amount deducted by the employer. The details from Form 16 need to be accurately filled in the relevant sections of the income tax return form. There are certain details that need to be derived from Form 16 while filing ITR. Here is the information required – Exempted allowances under section 10 Break down of deductions under section 16 Taxable salary Income from house property reported by an employee and offered for TDS Income under ‘Other sources’ offered for TDS Section 80C deductions in detail Aggregate of section 80C deductions Tax payable or refund due. Why is Form 16 required? Proof of Income and Tax Paid: Form 16 is a certificate provided

Verifying your income tax return is a crucial step in the tax filing process in India. ITR filing is not considered complete until it has been properly verified. The verification of an income tax return confirms that the information provided in the return is true and accurate to the best of the taxpayer’s knowledge. It also helps prevent fraudulent or incorrect filings. Electronic verification can be done using various methods:- Digital Signature Certificate Aadhaar OTP Electronic Verification Code (using bank account / demat account) Physical verification In cases where electronic verification is not possible, taxpayers can physically verify their return by submitting a signed ITRV (Income Tax Return-Verification) form to the Centralized Processing Center (CPC) in Bangalore. The ITR-V serves as proof of verification.  What is ITR verification? Verification means proving the authenticity of your income tax return. After you file your income tax return, the income tax department will need to verify the authenticity of your return. If the verification of your ITR is not done within 30 days, then your ITR filed earlier will be considered invalid. To do so, the department sends ITR Form V, which stands for ‘Income Tax Return – Verification.’ You are required to sign and submit it to the income tax department for verification, after which your filing process will be complete How to Download ITR-V Acknowledgement Step 1:Visit the official website of the income tax department and log in to your account. Step 2:On your dashboard, click on the e-file and hover over the Income tax return. Click on ‘View Filed Returns. Step 3:You will see a page with your filed returns. Click on the download form button next to your return details. Step 4:Once the receipt is downloaded, send it to CPC Banglore within 30 days of filing the return.   Ways to e-verify Income Tax Return ITR verification via Aadhaar-based OTP Choose ‘I would want to verify using OTP on the mobile number registered with Aadhaar’ and click ‘Continue’ on the ‘e-Verify’ page. On your screen, a pop-up will display. You must check the box next to ‘I agree to validate my Aadhaar details’ and then click ‘Create Aadhaar OTP’. Your registered cellphone number will receive an SMS with the 6-digit OTP. ITR verification via net banking Choose ‘Via Net Banking’ and click ‘Continue’ on the ‘e-Verify’ page. Choose the bank where you wish to validate your ITR and press the ‘Continue’ button. A disclaimer will appear on your screen as a pop-up. Read and then press the ‘Continue’ button. You will next be asked to log in to your bank account’s net banking. Choose the e-verify option, generally found under the ‘Tax’ page. You will be transferred to the income tax department’s e-filing website. Go to the appropriate ITR form and select e-verify. Your tax return will be successfully e-verified. ITR verification via bank account The third method of validating an ITR is to generate an Electronic Verification Code (EVC) through one’s bank account. To create EVC, you must have a pre-validated bank account. Remember that pre-validation of a bank account is required to get an income tax refund. Choose ‘Via Bank Account’ and click ‘Continue’ on the e-verify screen. The EVC will be generated and sent to the mobile number and email address associated with your EVC-enabled bank account. Input the EVC received on your registered mobile number and email address and click on e-verify. ITR verification via Demat account The method of certifying ITR via a Demat account is similar to that of validating ITR via a bank account. Choose ‘Via Demat Account’ and click ‘Continue’ on the e-verify screen. The EVC will be generated and sent to the cellphone number and email address associated with your EVC-enabled Demat account. Enter the EVC obtained on your registered mobile number and email address and click e-verify. ITR verification via bank ATM EVCs can also be generated with a bank ATM card. This service is only provided through a few banks: Axis Bank, Canara Bank, Central Bank of India, ICICI Bank, IDBI Bank, Kotak Mahindra Bank, and State Bank of India. Swipe your ATM card at your bank’s ATM, input your ATM PIN, and select ‘Create EVC for Income Tax Filing’. An EVC will be delivered to your registered mobile number and email address with the e-filing portal. Remember that your PAN must be registered with the bank. Go to the ‘e-verify returns’ tab. To verify the ITR, pick the option ‘I already have an Electronic Verification Code’ (EVC). Input the EVC code and press the e-verify button. ITR-V Submission to CPC in Bangalore If the assessee manually verifies the income tax returns, they must print a copy of the ITR-V form obtained by email or the income tax portal. The taxpayer should sign and keep the printed acknowledgement in an A4 envelope. Each envelope should only contain one ITR-V. There is no necessity to keep any other documents besides the signed ITR-V. The envelope must then be mailed (no courier services) to the CPC in Bangalore within 30 days of filing the income tax return. ITR-V should be sent to the following address: Income Tax Department – CPCPost Box No.1,Electronic City Post Office, FAQs What is ITV-V Status? ITR V status refers to the process of checking the status of your Income Tax Return (ITR) verification. This is crucial to ensure that your return has been successfully processed by the Income Tax Department. What is the due date for submitting ITR-V for verification? You get a period of up to 30 days from the date of filing your returns for submitting Form ITRV.

In a circular, the Income Tax Department stated, “The Central Board of Direct Taxes (CBDT) has decided to extend the specified date for filing various audit reports for the Previous Year 2023-24. The original deadline of September 30, 2024, for assessees referred to in clause (a) of Explanation 2 to sub-section (1) of Section 139 of the Act has been extended to October 7, 2024.” According to the circular, the CBDT specified the category of taxpayers for whom the deadline has been extended to October 7. This includes individuals, companies, and other assessees who are required to undergo a tax audit and whose income tax returns must be filed by October 31. These taxpayers were originally required to submit their audit reports by September 30. Central Board of Direct Taxes (CBDT), through Circular No. 10/2024 dated 29th September 2024, has extended the deadline for filing various audit reports under the Income-tax Act, 1961 for Assessment Year 2024-25. Initially set for 30th September 2024, the due date for furnishing audit reports has now been extended to 7th October 2024. This extension applies specifically to assessees mentioned under clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income-tax Act, who faced difficulties in electronically filing the required reports. The extension has been granted under the powers conferred to the CBDT by Section 119 of the Income-tax Act, addressing challenges faced by taxpayers and other stakeholders in meeting the original deadline. This move is intended to ease the compliance process for taxpayers during the current assessment period for the Previous Year 2023-24. Circular No. 10/2024 dated 29th September, 2024 F. No. 225/205/2024/ITA-ll Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, ***** Subject: – Extension of time lines for filing of various reports of audit for the Assessment Year 2024-25- reg. On consideration of difficulties faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961 (Act), the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Act, extends the specified date of furnishing of report of audit under any provision of the Act for the Previous Year 2023-24, which was 30th September, 2024 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 071h October, 2024. (Dr. Castro Jayaprakash. T) Under Secretary to the Government of India Copy to: 1. PS to F.M.I PS to MoS (F). 2. PS to Revenue Secretary. 3. Chairman (CBDT)& All Members ofCBDT. 4. All Pr. CCsIT/CCsITlPr. DGsIT/DGsIT. 5. All Joint Secretaries/CsIT, CBDT. 6. Directors/Deputy Secretaries/Under Secretaries ofCBDT. 7. Web Manager, with a request to place the’order on official Income-tax website. 8. CIT (M&TP), Official Spokesperson of CBDT with a request to publicize widely. 9. JCIT, Data Base Cell for placing it on irsofficersoniine.gov.in. 10. The Institute of Chartered Accountants of India, IP Estate, New Delhi. 11 . All Chambers of Commerce. 12. The Guard File. Why has the income tax audit report deadline been extended? In the circular, the CBDT stated: “Considering the challenges faced by taxpayers and other stakeholders in electronically filing various audit reports under the provisions of the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT), exercising its powers under Section 119 of the Act, has extended the deadline for submitting the audit report.”

The Budget 2023 caused a lot of confusion among taxpayers regarding the choice between the old and new tax regimes. The government introduced various incentives in the 2023 Budget and 2024 Budget to encourage the adoption of the new regime.  These changes show that the government intends to have taxpayers transition to the new regime and eventually phase out the old one. Though the new regime is now the default tax regime, the old tax regime will continue to exist. New Tax Regime A new tax regime was introduced in Budget 2020 wherein the tax slabs were altered, and taxpayers were offered concessional tax rates. However, those who opt for the new regime cannot claim several exemptions and deductions, such as HRA, LTA, 80C, 80D , and more. Because of this, the new tax regime did not have many takers. The government in the Budget 2023 introduced 5 key changes, which remain the same even for FY 2024-2025 since no changes were made in the Interim Budget 2024, to encourage taxpayers to adopt the new regime. They are: Higher Tax Rebate Limit: Full tax rebate on an income up to ₹7 lakhs has been introduced. Whereas this threshold is ₹5 lakhs under the old tax regime. This means that taxpayers with an income of up to ₹7 lakhs will not have to pay any tax at all under the new tax regime!  Streamlined Tax Slabs: The tax exemption limit has been increased to ₹3 lakhs, and the new tax slabs are:  Tax Slab for FY 2023-24 Tax Rate  Tax Slab for FY 2024-25 Tax Rate Upto ₹ 3 lakh  Nil Upto ₹ 3 lakh  Nil ₹ 3 lakh – ₹ 6 lakh 5% ₹ 3 lakh – ₹ 7 lakh 5% ₹ 6 lakh – ₹ 9 lakh  10% ₹ 7 lakh – ₹ 10 lakh  10% ₹ 9 lakh – ₹ 12 lakh  15% ₹ 10 lakh – ₹ 12 lakh  15% ₹ 12 lakh – ₹ 15 lakh 20% ₹ 12 lakh – ₹ 15 lakh 20% More than 15 lakh 30% More than 15 lakh 30% The tax rates under both regimes are compared as below:   Old Tax Regime (FY 2022-23, FY 2023-24 and FY 2024-25) New Tax Regime Income Slabs Age < 60 years & NRIs Age of 60 Years to 80 years Age above 80 Years FY 2022-23 FY 2023-24 FY 2024-25 Up to ₹2,50,000 NIL NIL NIL NIL NIL NIL ₹2,50,001 – ₹3,00,000 5% NIL NIL 5% NIL NIL ₹3,00,001 – ₹5,00,000 5% 5% NIL 5% 5% 5% ₹5,00,001 – ₹6,00,000 20% 20% 20% 10% 5% 5% ₹6,00,001 – ₹7,00,000 20% 20% 20% 10% 10% 5% ₹7,00,001 – ₹7,50,000 20% 20% 20% 10% 10% 10% ₹7,50,001 – ₹9,00,000 20% 20% 20% 15% 10% 10% ₹9,00,001 – ₹10,00,000 20% 20% 20% 15% 15% 10% ₹10,00,001 – ₹12,00,000 30% 30% 30% 20% 15% 15% ₹12,00,001 – ₹12,50,000 30% 30% 30% 20% 20% 20% ₹12,50,001 – ₹15,00,000 30% 30% 30% 25% 20% 20% ₹15,00,000 and above 30% 30% 30% 30% 30% 30% Salary income: The standard deduction of ₹50,000, which was only available under the old regime, has now been extended to the new tax regime as well. This amount has been increased to ₹75,000 for the new regime only with effect from FY 2024-25. Family pension: Those receiving a family pension can claim a deduction of ₹15,000 or 1/3rd of the pension, whichever is lower. This amount has been increased to ₹25,000 for the new regime with effect from FY 2024-25. Reduced Surcharge for High Net Worth Individuals: The surcharge rate on income over ₹5 crores has been reduced from 37% to 25%. This move will bring down their effective tax rate from 42.74% to 39%.  Higher Leave Encashment Exemption: The exemption limit for non-government employees has been raised from ₹3 lakhs to ₹25 lakhs, an 8-fold increase. Default Regime: Starting from FY 2023-24, the new income tax regime will be set as the default option. If you want to continue using the old regime, you must submit the income tax return along with Form 10-IEA before the due date. You will have the option to switch between the two regimes annually to check the tax benefits. Old Tax Regime The old regime is the tax system that prevailed before the introduction of the new regime. Under this regime, there are over 70 exemptions and deductions available, including HRA and LTA, that can reduce your taxable income and lower tax payments. The most popular and generous deduction isSection 80C, which allows for a reduction of taxable income up to Rs.1.5 lakh. The taxpayers are given a choice between the old and the new tax regime. Budget 2024 Updates Financial Minister Nirmala Sitharaman has proposed changes in the tax structure under the new tax regime. The new tax regime has been updated as follows – Comparison of pre-budget and post-budget tax slab   Tax Slab for FY 2023-24 Tax Rate  Tax Slab for FY 2024-25 Tax Rate Upto ₹ 3 lakh  Nil Upto ₹ 3 lakh  Nil ₹ 3 lakh – ₹ 6 lakh 5% ₹ 3 lakh – ₹ 7 lakh 5% ₹ 6 lakh – ₹ 9 lakh  10% ₹ 7 lakh – ₹ 10 lakh  10% ₹ 9 lakh – ₹ 12 lakh  15% ₹ 10 lakh – ₹ 12 lakh  15% ₹ 12 lakh – ₹ 15 lakh 20% ₹ 12 lakh – ₹ 15 lakh 20% More than 15 lakh 30% More than 15 lakh 30% Budget 2024 has increased the standard deduction under the new tax regime to ₹ 75,000. The family pension deduction has also been increased from ₹ 15,000 to ₹ 25,000. With the revised tax structure the taxpayer will save ₹17,500. Difference Between Old Vs New Tax Regime: Which is Better for FY 2023-24? The decision to switch to the new or remain in the old tax regime or which regime is better for you shall be based on the tax savings deductions and exemptions you are eligible for in the old tax regime. To make it easier, we have calculated a breakeven point for various income levels (refer

There has been rapid digitization in recent years which has changed the way governments function. The old Income Tax Portal was operational till 6th June 2021 and the new portal was introduced on 7th June 2021. The new income tax portal is easier to use and more convenient and provides a seamless experience to the users. E Filing 2.0 is an upgraded version of the previous e-filing portal with several improvements. Some of these upgraded features are as follows: Enhanced security features More user-friendly interface Faster processing times E-filing 2.0 has become increasingly popular due to its convenience and efficiency, allowing individuals and organizations to submit their paperwork easily from anywhere. Features of the New e-filing portal The new portal is integrated with the ITR processing unit, which will ensure the quick issue of refunds to the taxpayers. The current ITR processing system takes a few weeks and even months to credit refunds to the taxpayers account. The Income tax returns filed will be transmitted quickly to the CPC. Consequently, intimations will be sent sooner to the taxpayers resulting in quick refunds to the taxpayers. The new e-filing portal will provide various payment options such as net banking, RTGS/ NEFT, credit card, etc., from any of the taxpayer’s accounts. The new payment of tax facility will be enabled after 18th June to avoid advance payment difficulty to the taxpayers. Free of cost income tax return preparation software will be available online and offline for the taxpayers with a pre-filling facility. Currently, ITR-2 is available online, and ITR-1 & ITR-4 software are available online and offline. ITR preparation software for ITR-3, ITR-5, ITR-6, ITR-7 will be available shortly. The taxpayer can take follow up of all the interactions or pending actions through a single dashboard. A new helpdesk centre is for the assistance of the taxpayers for any queries through various means such as chatbot, videos tutorials, user manuals, FAQs, etc. A mobile application embedded with all key portal functions will be enabled for full time access on the mobile network. The new portal allows pre-filling of some details related to various incomes such as salary, house property, business/profession, etc. Additionally, it enables the detailed pre-filling of details of salary income, interest, dividend and capital gains. The pre-filling will happen when the concerned entities upload the TDS and SFT statements. Benefits of Income Tax Portal in India The integration of the new portal with the ITR processing system facilitates swift refunds for taxpayers, ensuring a user-friendly and efficient experience. The new income tax portal provides benefits such as complimentary ITR preparation software for ITR 1 and 4 (both online and offline) and ITR 2 forms (offline). Taxpayers can utilize the portal to file income tax forms, respond to various scrutiny processes, and engage with a diverse range of tax professionals. Users have the option to upload all their professional details, which can be conveniently accessed when it’s time to file Income Tax Returns (ITRs). The dashboard feature on the new portal assists taxpayers in managing various interactions, and it allows them to track pending requests. The newly established call center is equipped to address inquiries related to online income tax filing, simplifying the process of tax payment through the portal. FAQs Why was the e-filing portal 2.0 launched? It was launched to increase the ease of compliance of filing income tax returns for the taxpayers. How can I register on the new e-filing portal? You can register on the new e-filing portal by providing your PAN, mobile number, and email address. You will then receive an OTP on your mobile number and email ID, which you need to enter to complete the registration process.