Income Tax

The entire Section 80 CCD deals with tax benefits provided on the basis of contributions made to the pension fund schemes notified by the central government. There are various sub-sections to Section 80CCD of the Income Tax Act. Apart from the sections mentioned above, there are a few sections that deal with how the money is treated, the tax treatment of premature withdrawals, and other rules and regulations regarding money deposited in your pension fund account. 80 CCD deduction is not limited to part 1 for the employees. There is an additional benefit available under section 80CCD(1B). These income tax deductions sections are for investments made in a pension scheme notified by the central government. 80CCD (1) deals with the investment or contribution made by an employer to such a pension scheme, whereas section 80CCD (2) deals with employer contribution to an employee’s pension account. National Pension Scheme (NPS) is the scheme notified by the central government. The section 80CCD deals with tax deductions and reliefs given for contributions made to the pension fund account. What is Section 80CCD? Section 80CCD of the Income Tax Act, 1961 provides deductions for contributions to the National Pension System (NPS) or Atal Pension Yojana (APY). The National Pension Scheme and Atal Pension Yojana are retirement-oriented investment schemes launched by the Government of India. Both schemes provide pension income after the specified time period. If you choose to invest in the avenue under Section 80CCD, you can claim a total deduction of INR 2 lakhs in a financial year. Section 80CCD is further divided into two subsections: Section 80CCD(1) and Section 80CCD(2). Section 80CCD (1) has a subsection called 80CCD(1B). Deductions under Section 80CCD(1) Section 80CCD(1) of the Income Tax Act, 1961 provides deductions for contributions made towards the National Pension Scheme and Atal Pension Yojana scheme. Here are the key points to understand about Section 80CCD(1): Eligibility: Any individual, whether employed or self-employed, can claim deductions under Section 80CCD(1) for contributions made towards their NPS account or any other eligible pension scheme. Deduction Limit: The deduction limit under Section 80CCD(1) is as follows: For employees: The maximum deduction allowed is 10% of the individual’s salary (basic salary plus dearness allowance). This limit applies to employees contributing to their NPS account through their salary. For self-employed individuals: The maximum deduction allowed is 20% of the individual’s gross total income (before considering deductions under Section 80C, 80CCC, and 80CCD(1)). This limit applies to self-employed individuals contributing to their NPS account. Overall Deduction Limit: The deduction claimed under Section 80CCD(1) is part of the overall limit of Rs. 1.5 lakh under Section 80CCE, which includes deductions under Sections 80C, 80CCC, and 80CCD(1) combined. Tax Treatment on Withdrawal: When the individual withdraws or receives the maturity amount from the NPS account or eligible pension scheme, it is taxable in the year of receipt. However, a certain portion of the withdrawal amount may be tax-exempt, subject to the prevailing tax rules and conditions. Reporting: The contributions made towards the NPS account or eligible pension scheme need to be reported while filing the Income Tax Return (ITR) under the relevant sections and schedules. In the Union Budget of 2015, an amendment was made to Section 80CCD(1) of the Income Tax Act, introducing a new subsection, Section 80CCD(1B). Here are the key details about Section 80CCD(1B): Additional Deduction: Section 80CCD(1B) allows individuals, whether employees or self-employed, to claim an additional deduction of up to ₹50,000 over and above the limit mentioned under Section 80CCD(1). Eligible Contributions: The additional deduction of ₹50,000 can be claimed for contributions to the National Pension System (NPS) or the Atal Pension Yojana (APY). Non-Duplication of Claims: While claiming deductions under Section 80CCD(1B), it is important to ensure no claims are duplicated. This means that the contribution amounts claimed under Section 80CCD(1) should not be claimed again under Section 80CCD(1B). Overall Deduction Limit: Tax deduction up to ₹50,000 under section 80 CCD(1B) over and above the overall ceiling of Rs. 1.50 lakh under Sec 80 CCE. Reporting: The contributions made towards NPS or APY, along with the deductions claimed under Section 80CCD(1B), need to be reported while filing the Income Tax Return (ITR) under the relevant sections and schedules. Deduction under Section 80CCD (2) This Section applies to salaried employees whose employer also contributes to the National Pension Scheme. The employer can contribute towards the National Pension Scheme besides contributions to PPF and EPF. The limit of deduction allowed would be lower of the contributions made by the employer or 14% of the salary (in case the employer is Central Govt or State Govt.)/10% of the Salary (in case of other employers). This deduction is available over and above the deduction under Section 80 CCD (1). Sections Description Deduction Limit 80CCD(1) Employee contributions to NPS/Atal Pension Yojana up to 10% of salary + dearness allowance Up to ₹1,50,000 80CCD(2) Employer contributions to NPS/Atal Pension Yojana Up to 10% of basic + dearness allowance 80CCD(1B) Self contributions to NPS and Atal Pension Yojana above the Section 80CCD(1) limit Up to ₹ 50,000 Section 80CCD Deductions under the New Tax Regime Section Particulars New Tax Regime Deductions Old Tax Regime Deductions 80 CCD (1) Employee contributions to National Pension Scheme (NPS) Not Available Available 80 CCD (2) Employer contributions to National Pension Scheme (NPS) Available Available Atal Pension Yojana (APY) under 80CCD This is also a retirement-oriented investment scheme that seeks to provide a regular income to investors after they retire. The scheme can choose a fixed monthly pension amount of INR 1000 to INR 5000 when the investor attains 60. The amount of pension would depend on the investor’s age on joining the APY and the amount of investment done by him/her. Joint life annuities can also be availed under the scheme wherein the annuitant’s spouse would receive the annuity payouts on the annuitant’s death. Moreover, the contributed amount is paid back to the nominee on the spouse’s death. Individuals aged between 18 and 40 years can join the Atal Pension Yojana scheme as it

Challan 280 is a form that can be used by a person to make an income tax payment of self-assessment tax, tax on distributed income and profit, regular assessment tax, advance tax, and surtax. Another name for the form is “ITNS 280.” Whether you pay your taxes online or offline, you must use Challan 280 for the transaction. If you’ve opted for the offline method, you must take the form to a specified bank branch, where you must also make the payment. However, if you’ve chosen to pay online, you can finish the transaction by going to the TIN NSDL website. Income tax can be paid online or manually. Payment of tax is facilitated through designated banks by furnishing a hardcopy of the challan. Currently, online income tax payment has been mandated for various taxpayers. Also, more and more assesses are paying taxes online Income Tax Challan 280 This challan should be used for making payment of Income-tax, including Corporate tax. While completing Challan 280, the taxpayer should make a correct selection of the type of tax which is applicable to the assessee. Also, the correct code of the tax-payment should be mentioned. In Challan 280, Code 0020 is for income-tax paid by companies. Code 0021 is for income tax paid by non-corporate taxpayers. Further, the taxpayer should make the correct selection of an applicable type of payment along with the correct code of the respective type of payment. The following list enables an assessee to ascertain the correct code which should be applied: S. No. Code Number Purpose of the Field 1 100 Payment of advance tax 2 300 Payment of self-assessment tax 3 400 Tax on regular assessment 4 106 Dividend distribution tax 5 107 Tax on distributed income to unitholders 6 102 Surcharge tax Different Types of Challan for Tax Payments Challan 280: This is the most commonly used challan for income tax payment. It is used for the payment of income tax, surcharge, and education cess. Individuals and non-corporate taxpayers can use this challan to pay their income tax liabilities. Challan 281: This challan is used for the payment of tax deducted at source (TDS) or tax collected at source (TCS). It is used by taxpayers who are required to deduct or collect tax at source on behalf of the government. Challan 282: This challan is used for the payment of advance tax, self-assessment tax, and regular assessment tax. Individuals and non-corporate taxpayers who are not required to deduct or collect tax at source can use this challan for their tax payments. Challan 283: This challan is used for the payment of wealth tax. However, it is important to note that wealth tax has been abolished from the assessment year 2016-17 onwards. Challan 284: This Challan is used by the collectors to deposit TCS on the sale of specified goods such as scrap, minerals etc. Challan 285: The Income Declaration Scheme (IDS) Challan is used to pay the IDS tax. The IDS Challan was valid for a certain period of time and allowed taxpayers to report undisclosed income and pay tax on it. How to Pay Income Tax Online through Challan 280 Step 1: Visit the official website of Income Tax at https://www.incometax.gov.in/iec/foportal/ and Click on the ‘e-pay Tax’ under Quick Links as shown in the image below. Step 2: Once you click on e-pay tax, you will be re-directed to a new page. Now, Fill all the required details like PAN / TAN, Mobile Number. Now, click on ‘Continue’ Step 3: Enter the ‘OTP’ received on your Mobile and Click on Continue button. Step 4: You have successfully verified through mobile OTP; it will take you to new page where you have to select ‘Income Tax’ Option and ‘Proceed’ Step 5: Now, you will be redirected to the payment page where you have to fill the required fields like Assessment Year (AY) and Next, select the correct ‘Type of Payment’ from the given options including – (100) Advance Tax, (102) Surtax, (106) Tax on Distributed Profit, (107) Tax on Distributed Income., (300) Self-Assessment Tax, and (400) Tax on Regular Assessment. Step 6: Then, Fill the amount under Tax Head and Proceed to click on ‘Continue’ button Step 7: Then, choose the mode of payment. The payment can either be made using ‘Net Banking’ or through ‘Debit Card’. Once you select the convenient option, click the bank name from the drop-down menu next to the selected option. Step 8: Once the online payment of Income Tax  is successful, a challan counterfoil will display. It serves as proof of payment made. Make a copy for PDF for future reference.   Download Challan 280 (Offline) The Challan 280 can be downloaded from the internet by following the steps which are mentioned below: Step – 1: Visit the official website of Income Tax India at www.incometaxindia.gov.in Step – 2: On the home page, click on the ‘Forms/Downloads’ option from the top menu. Step – 3: Click on the ‘Challans’ option under the ‘Forms/Downloads’ menu. Step – 4: You will be redirected to a new webpage with a list of all the downloadable Challans. Step – 5: From this list click on the ‘ITNS-280’ which is located at the top of the list. Step – 6: The Challan 280 and all other Challans are available in 2 different formats – a PDF format and a Fillable Form. Click on the feasible option and download the form. FAQs What kind of income tax payments can Challan 280 be used? Challan 280 can be used for income tax payments like advance tax, self-assessment tax, surcharge, regular assessment tax, and tax on distributed profits or distributed income. What are the ways through which I can make income tax payments? Income tax payments can be made either online or offline. To pay income tax online, you will have to visit the TIN NSDL website. To pay income tax online, you will have to deposit it into a designated bank branch through demand draft, cheque or cash.

According to the Income-tax Act, the deduction of expenses is typically based on the accounting method followed by the assessee. However, Section 43B outlines certain expenses that are deductible only on a payment basis, irrespective of the accounting method. The Finance Act of 2023 introduced a new clause (h) to Section 43B, emphasizing timely payments to Micro and Small Enterprises (MSEs). This amendment, viewed as a Socio-Economic Welfare Measure, aims to address working capital shortages in the MSE sector by promoting prompt payments. The Law and Analysis: Section 43B(h) stipulates those payments to MSEs must adhere to the time limits specified in Section 15 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSME Section 43B(h): New MSME 45 Days Payment Rule The newly added clause (h) states that any sum payable by the assessee to a Micro & Small Enterprise beyond the time limit specified in Section 15 of the MSMED Act shall be allowed as a deduction only in the previous year in which the sum has been actually paid (irrespective of the accounting method employed). Applicability of Section 43B(h) Section 43B(h) applies when an enterprise purchases goods or services from a supplier registered under the MSMED Act, 2006. Importantly, the buyer’s registration under the MSMED Act is not required for this clause to apply. This provision, which encourages prompt payment to registered micro and small enterprises, will take effect on April 1, 2024. This ensures that the benefits of Section 43B(h) are available as long as the supplier is registered under the MSMED Act. Section 43B(h) Applicability On Traders As per Office Memorandum No. 5/2(2)/2021-E/P and G/Policy dated July 2, 2021, wholesale and retail traders are entitled to Udyam registration only for the benefit of Priority Sector Lending. So, Section 43B(h) is not applicable for dues outstanding to traders as per the MSMED Act’s definition of enterprise. Example: Mr. A purchased Goods from Mr. B. Mr.B is a trader. Is section 43B(h) applicable? No, section 43B(h) is not applicable as the supplier is a trader. It is applicable to Manufacturing and services Providers Only. Benefits of Clause (h) of Section 43B for MSMEs Smooth Payment Cycle: Section 43B(h) encourages large companies to settle their dues with MSMEs within the specified timeframe: 15 days without a written agreement and 45 days with an agreement. This ensures that MSMEs receive timely payments, which are crucial for maintaining their cash flow, sustainability, and growth. Better Bargaining Power: With the enforcement of this provision, MSMEs can negotiate payment terms with larger entities more confidently. Knowing that delayed payments have tangible consequences bolsters their negotiation position. Reduced Disputes: Timely payments lead to fewer disputes and legal issues related to outstanding dues. This reduction in conflict saves time and resources for both MSMEs and larger businesses, fostering a more harmonious business environment. Effective Date of Section 43B(h) for MSME Payments Section 43B(h), introduced in the Finance Act, takes effect from April 1, 2024. This means the amendment applies from the assessment year (AY) 2024-25, corresponding to the financial year (FY) 2023-24. Example: Mr. A purchased goods from Mr. B on March 31, 2023. Is Section 43B(h) applicable? No, Section 43B(h) does not apply to purchases made before March 31, 2023. The provision only affects payments for goods and services from April 1, 2024. Payment Time Limits Under Section 43B(h) for MSMEs Under Section 43B(h), business enterprises must adhere to specific payment timelines to MSMEs as dictated by Section 15 of the MSMED Act, 2006. These payment terms are contingent on a written agreement between the buyer and the supplier. No Written Agreement: If there is no written agreement specifying the payment terms, the business enterprise must pay within 15 days of purchasing goods or services from an MSME. With Written Agreement: If there is a written agreement, payments should be made according to the timeline specified in the agreement, provided that this period does not exceed 45 days from the date of acceptance or deemed acceptance of the goods or services. Here is the structured information about payment timelines for MSMEs under Section 15 of the MSMED Act, presented in tabular format  : Scenario Timelines for Payment Details Payment timelines specified under an agreement Payment should be made within the earlier of the following dates:     a) Due date specified in the agreement This is the date the buyer and MSE agreed upon for making the payment.   b) 45 days from the ‘day of acceptance’ The ‘day of acceptance’ is when the goods are delivered or the services are rendered.     Note: If the buyer objects in writing within 15 days of the delivery or rendering of services, the ‘day of acceptance’ is adjusted to the day when the MSE resolves the objection. Payment timelines not specified under an agreement Payment should be made within 15 days from the ‘day of acceptance’. The ‘day of acceptance’ is when the goods are delivered or the services are completed.     Note: If the buyer writes an objection to the goods or services within 15 days, the MSE resolves the objection on the ‘day of acceptance’. Penalties For Failure To Pay MSMEs In the case of late payment to an MSME, interest is applicable. Rate of interest: Compound interest at the 3 times the bank rate notified by the Reserve Bank of India (RBI). Date from which interest is payable: The date as per the agreement or the day following immediately after the expiry of the period of fifteen days from the day of acceptance or the day of deemed acceptance of any goods or any services by a buyer from a supplier (appointed day), as the case may be. The deduction of this interest is not allowed as an expense, as per the Income-tax Act (ITA), 1961. FAQs Who is affected by Section 43B(h)? Businesses that deal with Micro, Small and Medium Enterprises (MSMEs) will need to be more diligent in tracking and ensuring timely payments to these entities. Since deductions for delayed payments to micro and small enterprises can only be claimed upon actual payment, businesses

The process of verifying the data a taxpayer has supplied in the returns they have filed to the income tax department is known as income tax assessment. Following the submission of an assessee’s income tax return, the Income Tax department conducts an assessment. The assessment is being done so that the Income Tax department may check the return that was submitted to make certain that the amount of taxable income stated and tax that was paid were accurate Income Tax Assessment The term “assessment” in the context of income tax refers to the process where the Income-tax Department evaluates a taxpayer’s return of income. This evaluation is done to verify the accuracy and correctness of the information provided by the taxpayer in their Income tax return. The assessment process involves various methods, including: Regular assessments examine the details submitted in the taxpayer’s return for accuracy. Re-assessment might occur in specific situations as specified by the tax laws. Best judgment assessment under Section 144, where the evaluation is based on the best judgment of the Assessing Officer, is typically used when the taxpayer fails to comply with specific requirements of the tax laws. Notably, the Finance Act of 2018 introduced Section 143(3A), which implemented an e-assessment scheme for regular assessments carried out under Section 143(3). Further expanding this, the Finance Act 2020 included the best judgment assessments under Section 144 within the scope of e-assessment. By leveraging digital platforms, E-assessment aims to make the entire process more efficient and less cumbersome. Scrutiny Assessment Under Section 143(3) A thorough review of an income tax return that has been filed by a taxpayer is a scrutiny assessment in income tax Under Section 143(3). During a scrutiny assessment, a tax officer will carry out numerous tests and procedures to verify the accuracy and legitimacy of the taxpayer’s claims, deductions, and other items in their income tax return. A scrutiny assessment in income tax aims to make sure that the taxpayer hasn’t understated their income, calculated an excessive loss, or underpaid their taxes in any other way. For the following situations, scrutiny evaluation on Section 143(2) would be appropriate:  A Section 139 income tax return or a Section 142 answer to something like an scrutiny assessment in income tax notification has been submitted (1).  In order to make sure that the taxpayer hasn’t underestimated their income, calculated an excessive loss, or underpaid their income taxes in any way, the Assessing Officer or Income Tax Authority believes it essential or expedient to conduct an audit. Scrutiny Assessment in Income Tax Notice u/s 143(2) To initiate a scrutiny assessment, the concerned Income Tax officer must first issue an income tax notice under Section 143(2). In the income tax notice under Section 143(2), the Assessing Officer would request the taxpayer to appear in person or complete the process through e-Assessment and/or produce information and documents which the tax officer ascertains to be important for determining the taxable income and tax payable. An income tax notice under Section 143(2) should be served within a period of six months from the end of the financial year in which the return is filed. For example if an income tax return is filed on 2nd November 2018, notice under Section 143(2) can be served on the assessee up to September 30, 2019. If the notice is issued on 29th September 2019 and is received by the assessee after 30th September 2019, it is not a valid notice. If the notification is sent out on September 29, 2019, and the assessee receives it after September 30, 2019, it is not really a legitimate notice.  When is Notice u/s 143(2) Issued? Notice u/s 143(2) is issued to you by the Income Tax Department when your Income Tax Return is selected for scrutiny assessment or detailed assessment u/s 143(3). In simple words, Scrutiny assessment or detailed assessment u/s 143(3) means scrutiny is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by you in your Income Tax Return. The basic purpose of this scrutiny assessment is to ensure that you have filed the return with the correct income and paid the tax accordingly. The objective of this scrutiny is to check that: You have not understated your income You have not computed excessive loss You have not underpaid the tax in any manner Any mismatch in Income figures High value transactions Or any other defect in the ITR So, we can conclude to carry out scrutiny u/s 143(3) of the Income Tax Act, notice u/s 143(2) is issued by the Income Tax Department. Such notice can be issued within three months from the date on which the financial year ends. What is the Time Limit for Issuance of Notice u/s 143(2)? A notice u/s 143(2) of the income tax act for scrutiny assessment can only be issued up to a period of three months from the end of the financial year in which you furnished the return. (before 1 st April 2021, the limit was six months from the end of the financial year) For example, Ms. Sharma filed her return on 25.07.2022 for the financial year 2021-2022. In such a case, the notice u/s 143(2) of the income tax act can be issued to Ms. Sharma only up to 30.06.2023(being the end of three months period from FY 2022-2023 in which the said return was filed). What Exactly is a Scrutiny Assessment? A scrutiny assessment, as defined under section 143(3), involves a detailed examination of the income tax return. During this assessment, the tax authorities meticulously check the authenticity and accuracy of various claims, deductions, and other details you have provided in your return. Scope of Assessment under Section 143(1): The assessment under Section 143(1) is essentially a preliminary check of the income tax return filed by the taxpayer. At this stage, the focus is not on detailed return scrutiny. Instead, it involves a basic verification process where certain adjustments may be made to the income or loss reported by the taxpayer.

Form 16/ 16A, which your employer furnishes before filing your taxes for the relevant financial year. It is to be noted that Form 26AS and Form 16/16A should have the same amount deducted as Tax Deducted at Source (TDS). However, there might be inconsistencies in the TDS amount deducted for various reasons, including clerical mistakes. What is a TDS Statement? According to the Income Tax Act 1961, Tax Deducted at Source abbreviated as TDS refers to a specific amount of money written off at source by the deductor when the deductee’s source of payment is generated. The amount is then remitted into the account of the Central Government through banks that later upload information regarding TDS into the TIN central system. tax deductible payments must file quarterly TDS returns as applicable. This statement contains information about people who have received payment after-tax deductions, or in other words, deductees. It also contains the nature of the payment made to him and the tax deducted from his payment. These are called TDS statements. Based on such statements filed, the deductors generate Form 16 (TDS on salary) and Form 16A (TDS on other income) annually and quarterly respectively. What is Form 26AS? Generally, every entity (individual or company) that has deducted taxes must credit that amount to the government via banks. Banks must upload these TDS details into the Tax Information Network (TIN) central system. The deductors, parallely, would file quarterly statements to TIN, providing quarterly TDS details. Based on these details, the TIN central system matches information related to tax payments before converting it into a comprehensive ledger for the concerned PAN. This is Form 26AS. Basically, the Form 26AS statement provides a consolidated view of the total income earned by you as a deductee from various sources. It also includes the TDS/ TCS amount that has been deducted from your income and credited to the Income Tax Department. Apart from tax deductions, you may also pay taxes by way of Advance Tax and Self Assessment Tax. All such tax-related information appears in Form 26AS. What is Form 16, according to the Income Tax Act? Every detail related to TDS deduction of amount from an individual’s income is recorded in Form 16 Part A and 16A. It stands mandatory for the entity that has deducted any tax at source to issue certified and pre-filled Form 16 annually in either print or in soft copy form. Whereas, Form 16A which provides details of every tax deduction on incomes that do not include an individual’s sustained salary is issued every three months. Importance of Rectifying Mismatches The Income Tax department provides a pre-fill service where all data is automatically captured using PAN matching. When Form 26AS is not up to date, taxpayers cannot use the pre-fill facility. Additionally, if there is a mismatch, the IT return will be rejected, and taxpayers will have to respond to the IT notification online and explain the reasons. It may also cause delays in processing returns, thus, delaying tax refunds. The tax return is a vital document. Thus, rectifying mismatches early will help taxpayers file ITR without any hassles. Reasons for Mismatches between TDS Statement and Form 26AS Failure of the deductor to deposit TDS on time Incorrect amount entered in the TDS return Incorrect PAN quoted in the TDS return Mistake in the CIN (Challan identification number) The deductor’s PAN/TAN wrongly entered Mistake in the chosen Assessment year Omissions in the TDS return Incomplete details of the assessee in the TDS return Mismatch in the TDS quoted and the actual TDS deducted Rectifying TDS Mismatches More often than not, such mismatches can be attributed to wrong information provided in the TDS return. So, please approach your employer/deductor to file a revised TDS return after making the necessary corrections. The Income Tax department allows the assessee to mention the reason for the mismatch in the online portal in answer to a Notice sent by the department. Consequences of TDS Mismatch Computerized ITR processing income tax returns has made it easier to identify matches in Form 26AS and TDS statements. The income tax portal contains links that would provide access to 26AS, allowing the assessee to verify and cross-check the details. Hence, please ensure that TDS details in TDS statements and Form 26AS match to avoid the following consequences: With the prefill facility made available in the website and utilities, all the data available in the 26AS is automatically filled in the ITR. In the event of mismatches, the value prefilled will mismatch with our actual computations. Omission of entries by the deductor will result in you not getting credit for taxes actually  deducted and this could result in a tax payable situation. There will be delay in processing your Income tax return. Receipt of refund of excess tax deducted will be delayed. FAQs What is the time limit for TDS rectification? The taxpayer’s application for rectification should be disposed off within 6 months of the end of the month in which the application is received. Where rectification is done on its own, then such rectification can take place up to four years from the end of the FY in which the rectification order is passed. What to do if Form 26AS is not updated? Usually, it is the deductor’s responsibility to keep your form 26AS updated with all the deductions. In case your form 26AS is not updated, you should bring it to the notice of the deductor and get it updated as soon as possible. Only the deductor can update your Form 26AS details.

Individuals with their total income below the taxable limit can submit Form 15H and Form 15G to the bank and ask them to not deduct TDS on the amount of interest. These forms help claim receipts without any tax deduction. Form 15G and Form 15H are self-declaration forms provided by the Income Tax Department in India. These forms are used to declare that an individual’s income is below the taxable limit, thereby seeking exemption from tax deduction at source (TDS) on certain types of income. It’s important to note that both Form 15G and Form 15H are valid for one financial year and need to be filed every year if the individual continues to meet the eligibility criteria. Submitting these forms does not absolve the individual from paying taxes if their total income exceeds the exemption limit. They are required to file their income tax returns (ITR) and pay taxes accordingly. What is Form 15G And Form 15H? Form 15G and 15H are self-declaration forms to be filed and submitted by individuals to ensure that the banks or financial institutions do not deduct TDS on the interest income earned/accrued in a financial year as their estimated total income will be below the basic exemption limit (i.e., ₹2,50,000 or ₹3,00,000 or ₹5,00,000, as applicable) and there is no tax liability in that particular year. In the case of non-senior citizens, interest income should also be below the basic exemption limit to fill the Form 15G despite no tax liability on the total estimated income. As per the provision of the Income Tax Act, financial institutions and other organizations must deduct TDS while crediting interest income to the account of the person, and the amount exceeds INR 40,000 and INR 50,000 in the case of senior citizens. Normally, people have a myth that interest on fixed deposits is calculated at maturity. Instead, it is calculated, and TDS on interest on the same is deducted periodically, which reflects in your Form 26AS. Type of Form FORM 15G FORM 15H Type of Taxpayer Resident Individual with age less than 60 years or HUF or trust or any other assessee but not a company or a firm  Resident individual aged 60 years or more i.e. Senior citizen. Condition 1. Tax calculated on your total income is Nil 1. Tax calculated on your Total Income is Nil   2. The total interest income subject for the year is less than the basic exemption limit of that year, which is Rs.2.5 lakhs(old regime) or Rs.3 lakhs(new regime)  for financial year 2023-24 (AY 2024-25)   Only for Residents Please note that benefits of Form 15G and 15H cannot be claimed by Non-residents. Who Can File Form 15G and Form 15H & When? Form 15G and Form 15H are valid for one financial year. Ensure you submit these forms every year at the beginning of the financial year. This way, you can avoid the TDS deduction by the bank or any institution that is liable to deduct TDS from your interest income. Forms can be submitted by – Form 15G Any Resident Individual (below 60 years of age)or HUF or trust or any person (other than company or firm) Having interest income from FD below the basic exemption limits of Rs 2.5 lakhs and No final tax liability Anyone having a valid PAN can submit the Form 15G. Form 15H Any resident Individual aged 60 years or above, namely, Resident Senior Citizens Having any Interest Income. The final tax liability should be NIL And Must have a valid PAN What is the Need for Form 15G and Form 15H? Banks or public financial institutions, while crediting the periodic interest in your account, deduct TDS on term deposit interest income.One can avoid deduction of TDS on such interest income if his/her total income is below basic exemption limit and there is no final tax liability in that particular financial year. Filing Form 15G or 15H helps an individual declare that his/her income during the FY is less than the basic exemption limit and ensures that there is no deduction of TDS from his/her income. What are the Differences Between Form 15G and Form 15H? The applicability and effectiveness of both of these forms, how to fill forms 15G and 15H, their uses, etc. Both forms are similar yet distinguished in the following ways   Form 15G Form 15H Applicable on Form 15G can be submitted by any person (other than a company or firm) Form 15H can be submitted only by resident Individuals Age Limit Applies to residents below 60 years of age This applies to resident senior citizens ( aged 60 years and above ) Interest Income shall fall below the basic exemption limit Interest income shall be below the basic exemption limit and not chargeable to tax Interest income may or may not be below the basic exemption limit and not chargeable to tax Provision under the Income Tax Act As per Section 197A (1) and (1A) As per Section 197A (1C) For Which Transactions Can Form 15G or Form 15H be Submitted? Form 15G:Form 15 G is filled by resident individuals whose age is below 60 years during the financial year as mentioned in Form 15G is submitted when an individual expects to earn interest income exceeding ₹40,000 and, for senior citizens, ₹50,000 during that financial year and wants to request exemption from TDS on that income. Form 15HForm 15H is submitted solely for senior citizens, i.e., individuals who are at least 60 years of age. Eligible individuals wanting to claim exemption from TDS deductions on FDR interest income. Individual Senior citizens need to submit it every financial year to avoid a TDS deduction. Forgot to Submit Form 15G or Form 15H? File your income tax return to claim refund of TDS: The only way to seek refund of excess TDS deducted is by filing yourincome tax return. Banks or other deductors cannot refund TDS to you, since they have already deposited it to the income tax department.

A taxpayer pays taxes on every kind of income. Form 26Q is a type of TDS (Tax Deducted at Source) return form used in India. It is specifically used for reporting TDS deductions made on payments other than salaries. Form 26Q is filed by the deductor, who is the person responsible for deducting TDS, to provide information about the TDS deductions made from various payments made to residents. The primary purpose of Form 26Q is to report TDS deductions on payments such as rent, professional fees, commission, interest, and other non-salary payments made to residents. 26Q TDS Return Meaning The Form 26Q is applicable for the TDS under Section 200(3) of the Income Tax Act under Sections 193, 194, 194A, 194B, 194BB, 194C, 194D, 194EE, 194F, and more. This is the statement for the TDS on all payments except for the salary. A deductor will have to submit his TAN to submit this form. The non-government deductors need to quote the PAN, whereas the government deductors will have to quote “PANNOTREQD” on Form 26Q. What are the Sections Under Form 26Q? Under 200(3) of the Income Tax Act, 1961, form 26Q is applicable for the TDS for all of the payments except for the salary. The sections under this law give the details of when the TDS and the amount limit under which it is not applicable.  Section 192 If the net taxable income is lesser than the maximum amount that is not chargeable to tax: a) Rs. 2,50,000 for individuals b) Rs. 3,00,000 for Senior Citizens. c) Rs. 5,00,000 for Super Senior Citizens. There is no TDS at source from salaries. Section 192A Suppose the amount that is paid is less than Rs. 30,000. There is no TDS from the payment of the PF account of an employee. Section 193 If there is an amount paid or payable during the financial year and it is less than five thousand rupees. There is no TDS from the interest paid on the debentures issued by the company in which the public is substantially interested. Provident interest is paid by the account payee cheque to the resident individual.  Section 193 If the amount is paid or it is payable during the financial year, it is less than Rs. 10,000. There is no TDS from the interest of 8% savings paid to the residents. Section 193 If there is a declaration made that the nominal value of such bonds is not more than ten thousand at any time during the previous year. Section 194 If the amount that is paid or payable during the financial year is lesser than Rs. 2,500. Section 194A If the amount that is paid or is payable during the financial year is less than Rs. 10,000. Section 194A If the amount that is paid or is payable during the financial years is less than Rs. 10,000. Section 194A When the amount that is paid or is payable during the financial year is less than Rs. 5,000. Section 194A If the amount that is paid or is payable during the financial year is less than Rs. 50,000. Section 194B If the amount that is paid or is payable during the financial year is less than Rs. 10,000. Section 194BB When the amount that is paid or is payable during the financial year is less than Rs. 10,000. Section 194C Suppose the sum that is paid or is payable to the contractor in a single payment is less than Rs. 30,000. Also, when the sum paid or payable to a contractor in aggregate is less than Rs. 1,00,000 during the financial year. Section 194D When the amount that is paid or is payable during the financial year is lesser than Rs. 15,000. Section 194DA When the amount that is paid or is payable during the financial year is less than Rs. 1 lakh. Section 194EE If the amount paid or payable in the financial year is less than Rs. 2,500. Section 194G When the amount that is paid or payable during the financial year is lesser than Rs. 15,000. Section 194H When the amount that is paid or payable during the financial year is less than Rs. 15,000, also, there is no tax that is being deducted from the commission that is payable. Section 194-I When the amount that is paid or is payable during the financial year is lesser than Rs. 1,80,000. Section 194-IA When the amount that is paid or is payable during the financial year is lesser than Rs. 50 lakhs. Section 194-IB When the amount of the rent is lesser than Rs. 50,000 for a month or a part of a month. Section 194J When the amount that is paid or is payable during the financial year is lesser than Rs. 30,000. Section 194LA When the amount paid or payable during the financial year is lesser than Rs. 2.5 lakhs. Section 206A When the amount that is paid or is even payable during the financial year is lesser than: Rs. 10,000 where the payer is a co-operative society or a banking company. Rs. 5,000 in another case. Details to be filled in the form 26Q Form 26Q only contains one annexure where the details are to be filled. These details are as follows: Challan details The serial number of the challan TDS amount Surcharge amount BSR Code Education cess amount Amount of interest The total tax deposit The number of demand drafts or the cheque (if applicable) The collection code The tax deposit date Method of TDS deposition Payer Details Name Address PAN Number Contact details Payee Details Name of the payee Email ID Full Address Contact number PAN Number Telephone number Due Date of Filing the Form 26Q All taxpayers are supposed to file the TDS return with form 26Q promptly and regularly. The form 26Q is filed quarterly, and the last dates for doing that are as follows: Quarter 1 31st July Quarter 2 31st Oct Quarter 3 31st Jan Quarter 4 31st May While making the

The Income Tax Department, recognizing the significance of fostering savings and investments, has incorporated a comprehensive set of income tax deductions under Chapter VI A of the Income Tax Act. While deduction under 80C stands out as a widely known provision, several other deductions exist, providing taxpayers with opportunities to strategically reduce their tax liabilities. These deductions under section 80C to 80U serve as powerful incentives, allowing individuals to optimize their financial planning and contribute to the nation’s economic growth What is Income Tax Deduction under Chapter VI A of Income Tax Act? Income Tax Deduction under Chapter VIA of Income Tax Act refers to a reduction in the taxable income of an individual or a business entity, which results in a lower tax liability. The Indian Income Tax Act provides for various deductions under sections 80C to 80U, which can be claimed by an individual or a business entity while calculating their taxable income. Tax saving calculation for yearly income-20 lakhs Gross Salary 2,000,000 Less: HRA 200,000 LTA 40,000 Reimbursements 24,500 Children education and hostel allowance 9,600 Standard Deduction 50,000 Professional Tax 2400 Taxable Salary Income Less: Deductions 80C (Refer Note below) 150,000 80D 50,000 80E 22,000 Net Taxable Income 14,51,500 Tax on the above income 2,57,868 Rebate u/s 87A Not applicable Total Tax 2,57,868 Apart from this, you can also claim these tax deductions if eligible: Interest on home loan EMIs under Section 24b -2,00,000 Principal amount of the home loan under section 80EEA -1,50,000 National Pension Scheme (NPS) investments u/s 80CCD(1B) -50,000   Section 80 Deduction List – Who can Claim Income Tax Deductions? Only eligible taxpayers can claim these deductions in their income tax returns. Such eligible taxpayers have been specified under various sections of the Act. It is pertinent to note that the taxpayers who opt to pay tax under the new tax regime can claim only deductions under sections 80CCD(2) and 80JJAA. Income tax deduction needs to be claimed at the time of filing your Income Tax Return, and no separate disclosure compliances are required for claiming such deductions. The number of deductions should be reduced from the gross income to reach the taxable amount. Sections Income Tax Deduction for FY 2023-24(AY 2024-25) Eligible person Maximum deduction available for FY 2023-24(AY 2024-25) Section 80C Investing into very common and popular investment options like LIC, PPF, Sukanya Samriddhi Account, Mutual Funds, FD, child tuition fee, ULIP, etc IndividualOrHUF Upto Rs 1,50,000 Section 80CCC Investment in Pension Funds Individuals Section 80CCD (1) Atal Pension Yojana and National Pension Scheme Contribution Individuals Section 80CCD(1B) Atal Pension Yojana and National Pension SchemeContribution (additional deduction) Individuals Upto Rs 50,000 Section 80CCD(2) National Pension SchemeContribution by Employer Individuals Amount Contributedor14% of Basic Salary + Dearness Allowance (in case the employer is Government)10% of Basic Salary+ Dearness Allowance(in case of any other employer)– Whichever is lower Section 80D Medical Insurance Premium, preventive health checkup and Medical Expenditure IndividualOrHUF Upto Rs 1,00,000 Section 80DD Medical Treatment of a Dependent with Disability IndividualOrHUF Normal Disability (atleast 40% or more but less than 80%): Rs 75000/-Severe Disability (atleast 80% or more) : Rs 125000/- Section 80DDB Medical expenditure for treatment of Specified Diseases IndividualOrHUF Senior Citizens: Upto Rs 1,00,000Others: Upto Rs 40,000 Section 80E Interest paid on Loan taken for Higher Education Individual No limit (Any amount of interest paid on education loan)upto 8 assessment years Section 80EE Interest paid on Housing Loan Individual Upto Rs 50,000 subject to some conditions Section 80EEA Interest Paid on Housing Loan Individual Upto Rs 1,50,000/- subject to some conditions Section 80EEB Interest paid on Electric Vehicle Loan Individual Upto Rs 1,50,000 subject to some conditions Section 80G Donation to specified funds/institutions. Institutions All Assessee (Individual, HUF, Company, etc) 100% or 50% of the Donated amount or Qualifying limit,Allowed donation in cash upto Rs.2000/- Section 80GG Income Tax Deduction for House Rent Paid Individual Rs. 5000 per month25% of Adjusted Total IncomeRent paid – 10% of Adjusted Total Income– whichever is lower Section 80GGA Donation to Scientific Research & Rural Development All assessees except those who have an income (or loss) from a business and/or a profession 100% of the amount donated.Allowed donations in cash upto Rs.10,000/- Section 80GGB Contribution to Political Parties Companies 100% of the amount contributedNo deduction available for the contribution made in cash Section 80GGC Individuals on contribution to Political Parties IndividualHUFAOPBOIFirm 100% of the amount contributed.No deduction available for the contribution made in cash Section 80RRB Royalty on Patents Individuals (Indian citizen or foreign citizen being resident in India) Rs.3,00,000/-OrSpecified Income– whichever is lower Section 80QQB Royalty Income of Authors Individuals (Indian citizen or foreign citizen being resident in India) Rs.3,00,000/-OrSpecified Income– whichever is lower Section 80TTA Interest earned on Savings Accounts IndividualOrHUF (except senior citizen) Upto Rs 10,000/- Section 80TTB Interest Income earned on deposits(Savings/ FDs) Individual (60 yrs or above) Upto Rs 50,000/- Section 80U Disabled Individuals Individuals Normal Disability: Rs. 75,000/-Severe Disability: Rs. 1,25,000/- Expenses that Qualify for Tax Deductions under Section 80C Life Insurance Premiums Employee Provident Fund (EPF) contributions Public Provident Fund (PPF) investments National Savings Certificate (NSC) investments Equity-Linked Savings Scheme (ELSS) investments Sukanya Samriddhi Yojana (SSY) investments 5-Year Fixed Deposit with Banks Senior Citizens Savings Scheme (SCSS) investments Tuition Fees for up to two children Home Loan Principal Repayment Stamp Duty and Registration Charges for a Home Investments that Qualify for Deductions under Section 80C Tax saving options under Section 80C There are several options you can choose to save tax under Section 80C of the Income Tax Act. The Income Tax deduction list include: Equity Linked Saving Scheme (ELSS) National Pension Scheme (NPS) Unit Linked Insurance Plan (ULIP) Public Provident Fund (PPF) Sukanya Samriddhi Yojana (SSY) National Savings Certificate (NSC) Fixed Deposit (FD) Employee Provident Fund (EPF) FAQs Can I claim the 80C deductions at the time of filing the return in case I have not submitted proof to my employer? You need to give evidence of your investments to your employer by the end of the financial year. This helps your employer

An income tax return is a communication made to the Income Tax Department by the taxpayer, informing the department about the financial details of the taxpayer. The details are provided for every financial year and include figures such as the taxable income and tax liability of the taxpayer. Depending on the category of the assessee, different forms are used to file the income tax returns.  Calculating Total Income Income earned through Salaries Income or deemed income generated through house property Profit obtained from a business Capital gains Additional income generated through other resources. How to File Income Tax Returns Filing Income Tax Return Manually Individuals meeting certain criteria can file their income tax return in physical mode. In a physical mode, the individual can prepare and submit the return at an Income Tax Office. ITR-1 Return Filing can be filed by taxpayers with salary income and up to one house property. To file income tax return manually, the following criteria must be met by the taxpayer: The age of the taxpayer is 80 years or above in the financial year. Total Gross Income of the taxpayer is below five lakhs and there is no income tax refund claim. When the income tax return is filed manually, the taxpayer should print out two copies of Form ITR-V. One copy of ITR-V can be retained by the taxpayer. The other copy, duly signed by the taxpayer, has to be sent by post to: Post Bag No. 1Electronic City Office,Bengaluru— 560 100,Karnataka. Return Filing using Excel Income tax return filing can be done using an excel tool provided by the Income Tax Department. The offline excel tool for tax return filing can be used to prepare and file IT return with no internet connection. The taxpayer can follow the steps below to prepare and file an income tax return using the excel tool. Excel macros need to be enabled before the user starts to fill in the form. Cells in which data needs to be entered is highlighted in green colour. Mandatory fields represented in red font must be completed. Non-mandatory fields are represented in black font. The excel sheet contains multiple tabs. All tabs must be completed. After filling in all the required sheets, it needs to be validated. Once these sheets are validated, tax to be paid is automatically calculated. The tool then creates an XML file that can be uploaded on the Income Tax Department website to complete the return filing. Return Filing Java Application The Java tool for filing an income tax return can be used in OS (Operating System) platforms like Windows 7, 8 or Linux or Mac OS provided if it has the JRE (Java Running Environment) in it. The basic steps involved in filing income tax returns using the Java tool is provided below: Latest version of java form in zip format needs to be downloaded and it has to be unzipped. A new ITR java form is created by clicking the “New” command. Data is imported by selecting its path from an XML file using “Open” command. With the help of “Prefill” option, the personal details can be automatically filled in. Then the XML file is saved in the draft form using “Save Draft” command. Data entered in the fields are recalculated to validate the same using “Recalculate” option. Finally, AY2024-25 Income Tax Excel Utility AY2024-25 Income Tax Java Utilitythe filled in form is saved and submitted using “ Save” and “ Submit” commands in e-filing portal on the Income Tax website. Verification of Income Tax Return Verification or substantiation of an income tax return means proving to the Income Tax department that the return filed by or on behalf of the taxpayer was uploaded into the website of the Income Tax department only after obtaining the consent of the taxpayer. The verification allows the department to ascertain that the details in the return are furnished according to the knowledge of the taxpayer. The verification of an income tax return can be done online or by attaching ITR-V form as an addition. Substantiation is done by attesting the signature of the applicant in a digitized format or through physical mode. Filing an income tax return by making use of a digital signature does not require any verification from the applicant’s side; on the other hand, making use of the physical mode requires verification from the applicant’s side. If the ITR-V form is not verified by the applicant, the tax filing process will stay incomplete. Therefore verification must be completed immediately after filing the income tax return. The applicant has various options when it comes to online verification of the income tax return form submitted during the time of uploading the file. Email and phone number can also be used in case the taxpayer has a taxable income which is less than Rs.5 lakhs and the refund amount is less than one hundred rupees. In other cases, it is necessary to generate an OTP by using Aadhar Card. For the Aadhar-based OTP procedure to be possible, the taxpayer should ensure that the mobile number mentioned in the Aadhar card is in an active connection status. FAQs What is an Income Tax Return (ITR)? An Income Tax Return (ITR) is a form that individuals and businesses use to report their income, expenses, and tax liability to the Income Tax Department of India. It helps in calculating the amount of tax payable or the refund due. Who is required to file an Income Tax Return? Any individual or entity whose income exceeds the basic exemption limit, or who is required to do so by law, must file an ITR. This includes salaried employees, self-employed individuals, businesses, and professionals.

The Finance Act of 2020 introduced Section 115BAC into the Indian Income Tax Act. This section allows individuals to choose between old tax rates and new reduced tax rates. Both regimes come with their own share of deductions and exemptions. This article sheds light upon the deductions under the new tax regime introduced under section 115BAC of the Income Tax Act. What is Section 115BAC of the New Tax Regime? According to Section 115BAC of the Income Tax Act, individuals or Hindu undivided families (HUFs) with income other than from a profession or business can choose to be taxed based on earlier years’ income when filing their returns under Section 139(1). This change was applied starting from the 2020-21 financial year and covers income earned from April 1, 2020, onward. A key aspect of this tax regime, outlined in Section 115BAC of the Income Tax Act, is the significant reduction in income tax slab rates. However, those who opt for this new regime will need to give up various deductions and exemptions available in the existing tax structure. Under this new section of the Income Tax Act, the concessional tax rate is applicable only after computing total income, excluding certain deductions or exemptions like set off of a loss and additional depreciation.   What are the Income Tax Slab Rates Under Section 115BAC? The Union Budget 2024 introduced significant changes to the new tax regime. These changes are expected to provide significant tax relief to the middle class and make the new tax regime more appealing. Revised Tax Slab (New Tax Regime) FY 2024-25 along with FY 2023-24 Income Bracket (₹) FY 2024-25 Tax Rate FY 2023-24 Tax Rate 0-3 lakh 0% 0% 3-6 lakh 5% 5% 6-7 lakh 5% 10% 7-9 lakh 10% 10% 9-10 lakh 10% 15% 10-12 lakh 15% 15% 12-15 lakh 20% 20% 15 lakh+ 30% 30% What is the Eligibility for Section 115BAC? Income from business or profession should not be included in the total income. Total income should be calculated without availing deductions/exemptions from various sections such as Chapter VIA (except 80CCD, 80JJAA), sections 24b, 10, 32, 35, etc. Exclusions specified in Clause (5), (13A), (14), (17), (32) of Section 10 or 10AA or Section 16 should be considered. Any losses from past years due to claiming the mentioned deductions or owning a house should not be set off. No exemptions or deductions for allowances or perquisites can be applied. Depreciation under section 32(iia) cannot be claimed when computing the total income under section 115BAC. Which Deductions Are Allowed Under the New Tax Regime? Transport allowance provided to specially-abled persons. A conveyance allowance was received as compensation for the expenditure incurred as a part of the employment. Allowance is received to meet the expenses of tour, transfer, or travel. Daily allowance received in order to meet the ordinary expenses due to his absence from the place of duty. Perquisites received for official purposes. Exemption on voluntary retirement under section 10(10C), leave encashment u/s 10(10AA) and gratuity under section 10(10). Interest on a home loan on the let-out property (section 24). Gifts received upto Rs.50,000. Deduction for employer’s contribution to NPS account under section 80CCD(2). Deduction for additional employee cost. The standard deduction is Rs.50,000 under the new regime, applicable from FY 23-24. Deduction for family pension scheme under section 57(iia). Deduction of the amount deposited or paid in the Agniveer Corpus Fund under section 80CCH(2). FAQs What are the deductions allowed for 115bac? Section 115BAC limits deductions and disallows various expenses such as HRA, medical costs, and education loan interest. Additionally, starting from FY 2023-24, individuals can claim a standard deduction of Rs. 50,000 under both the new and old tax regimes. Is PPF included in the new tax regime? Tax is not levied on maturity proceeds from investments in the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana. However, in the new regime, investments in these accounts do not qualify for the section 80C deductions up to Rs 1.5 lakh offered by the old regime.