Income Tax

Form 16 is a document issued under Section 203 of the Income Tax Act 1961. It is issued by an employer to their employee and serves as a certificate of Tax Deducted at Source (TDS) on salary income. It ensures that the employer successfully submits the TDS to the Income Tax Department. Simply put, Form 16 is a certificate that provides a detailed summary of the following heads in a particular financial year (April to March):  Salary earned by an employee Allowances Deductions Taxes paid on the employee’s behalf Form 16 is a certificate that denotes the fine breakup of salary income and the Tax Deducted at Source amount deducted by the employer. It is associated with Income tax and is used by companies to provide their salaried individuals’ information on the tax deducted. In simple words, Form 16 means a document provided by your employer that certifies the salary details earned during a particular year and how much TDS has been deducted. Form 16 is among the necessary forms for salaried individuals when it comes to taxation.  It comprises all crucial information related to one’s salary and accumulated tax amount deducted by the issuer. What makes the said form so important is its role in filing ITR, among others.  What is Form 16 in Income Tax Form 16 is a certificate that contains vital information required to file income tax returns. An employer issues it every year on or before 15 June of the next year, immediately after the financial year in which the tax is getting deducted. This certificate is issued according to Section 203 of the Income Tax Act 1961. Form 16 is also known as a salary TDS certificate and comprises details related to the salary paid by an employer to an employee in a given fiscal year. It also has the details of the income tax that has been deducted from the salary of the individual in question. Suppose the income from your salary for a financial year is more than the basic exemption limit of Rs. 2,50 000; then your employer is required to deduct TDS from your salary and deposit it with the government. Those who have worked with more than one employer at the same time or have changed jobs in a financial year will receive Form 16 from all the employers. It must be noted that it is not issued to an employee whose income for a particular year is below the threshold of tax exemption with no provision for TDS. Significance of Form 16 The information contained in this form comes in handy for filing ITR. It helps taxpayers to prepare their ITR easily without seeking the help of any financial planner or CA. The said certificate helps to verify the deposited tax amount by comparing the same with Form 26AS. It serves as proof of TDS. Form 16 also serves as proof of income. It is an important document that is used in the verification process while availing of a loan. Several organisations require individuals to submit Form 16 issued by their previous employers as a part of the onboarding process.  It also serves as a visa checklist and comes in handy while planning a foreign trip. How to Download Form 16 From TRACES Firstly, go to the TRACES portal. Log in to the portal with your login ID and password. Hover over to the downloads tab, where you can find Form 16A. Once you have opened the Form, fill in all the required details.  FAQs What is the use of Form 16? Form 16 is a certificate denoting salary income and the TDS amount breakup. It is useful for verifying the TDS that was deducted by the employer from the employee’s salary and finally submitted to the income tax department. Form 16 is a certificate that is issued by an employer. It consists of a salary breakup, which is required to file the ITR. What is the difference between Form 16 and ITR?

The Indian income tax system levies a tax on individual taxpayers depending on their income level. However, from 2020-21, the method of levying taxes changed. A new tax regime was announced wherein the tax rates were reduced significantly, along with a massive reduction in tax-saving opportunities. The government has incorporated many incentives in the 2023 Budget to support implementing the new system The Indian tax system offers salaried individuals two options for filing their Income Tax Return (ITR): the old tax regime and the new tax regime. Each regime has its own set of tax slabs, deductions, and exemptions. Choosing the right regime can significantly impact your final tax liability.  New Tax Regime The new tax regime was introduced in budget 2020 with concessional tax rates. However, the taxpayers who opted for the new tax regime could not claim major deductions like HRA, LTA, 80C, and many others. This leads to a smaller number of taxpayers opting for this regime. Hence, in Budget 2023, to make the new tax regime more lucrative, the following key changes were introduced:- Default Regime:- New tax regime is set as a default regime which means if you haven’t informed your employer about which regime to choose from, the TDS calculation will be done on the basis of the new tax regime only from FY 23-24. Tax Rate:- The basic exemption limit under the new tax regime has been raised to Rs 3 lakh from Rs 2.5 lakh from FY 23-24 to make the new tax regime more attractive. Also, the highest tax rate of 30% will be levied above Rs 15 lakh income. Rebate Limit:- The rebate under section 87A has been hiked to Rs 7 lakh from Rs 5 lakh under the new tax regime from FY 23-24. The rebate benefit will be up to Rs 25000, provided income doesn’t exceed the limit of 7 lakhs. Standard Deduction:- Individuals with salary income can claim a standard deduction of Rs. 50,000 from their gross salary income from FY 23-24. Family pensioners opting for the new tax regime can claim a standard deduction of Rs 15,000 from their pension income. Slashed the surcharge limit:- Reduction in the surcharge on annual income above 5 crores from 37% to 25% under the new regime. The highest tax rate is 42.74%, which would slash the maximum tax rate to 39% after this reduction. Leave encashment exemption:- The limit of Rs. 3 lakh for tax exemption on leave encashment on non-government salaried employees has been raised to Rs. 25 lakh. Insurance plans:- As per the announcement in the Budget 2023-24, income from traditional insurance policies where the premium is more than Rs 5 lakh will not be tax-free. Tax Slabs:- The new tax regime has reduced the income tax slabs from 6 to 5.  The tax exemption limit has been raised to 3 lakhs, and the new tax slabs are as follows. Here are the new vs old tax regime slab- Annual Income Income Tax Slab Old Regime Up to Rs. 3 lakhs Nil Rs.3 – 6 lakh 5% Rs.6 – 9 lakh 20% Rs. 9-12 lakh 30% The following table illustrates the changes in New Tax Regime slabs with respect to changes announced in Union Budget 2024- Tax Slab for FY 2023-24 Tax Rate Tax Slab for FY 2024-25 Tax Rate Upto Rs 3 lakh  Nil Upto Rs 3 lakh  Nil Rs 3 lakh – Rs 6 lakh 5% Rs 3 lakh – Rs 7 lakh 5% Rs 6 lakh – Rs 9 lakh  10% Rs 7 lakh – Rs 10 lakh  10% Rs 9 lakh – Rs 12 lakh  15% Rs 10 lakh – Rs 12 lakh  15% Rs 12 lakh – Rs 15 lakh 20% Rs 12 lakh – Rs 15 lakh 20% More than 15 lakh 30% More than 15 lakh 30% Old Tax Regime The tax system that existed before the implementation of the new regime is the old tax regime. Approximately 70 exclusions and deductions are available under this system, including HRA and LTA, that can reduce your taxable income and minimise your tax payments. Section 80C, the most prevalent and substantial deduction, allows for a reduction in the taxable income of up to Rs.1.5 lakh. Additionally, the taxpayers are offered the option of choosing between the existing and new tax regimes. List of a Few Exemptions and Deductions in Old Tax Regime Slabs Here’s the list (not exhaustive) of exemptions- Leave Travel Allowance  House rent allowance Deductions available under Section 80TTA/80TTB (on interest from savings account deposits ) Entertainment allowance deduction and professional tax (For government employees) Tax relief on interest paid on home loan for self-occupied or vacant property u/s 24 Deduction of Rs 15000 permitted from family pension under clause (ii a) ( Section 57) Tax-saving investment deductions under Chapter VI-A (80C,80D, 80E,80CCC, 80CCD, 80D, 80DD, 80DDB,, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc) (Except, deduction under Section 80CCD(2)—employers contribution to NPS, and Section 80JJA) and so on. These popular tax-saving investment options include ELSS, NPS, PPF, and a tax break on insurance premiums.  One can still claim a deduction under sub-section (2) of section 80CCD, basically an employer’s contribution towards an employee’s account in NPS and section 80JJAA ( for new employment). Difference Between Old Vs New Tax Regime: Which should a person choose? The choice of switching to the new tax regime or staying in the old tax regime, or whether the regime is best for you, must be based on the tax savings deductions and exemptions available in the previous tax system. Old Vs New Regime Example Suppose an individual has an income of Rs. 7,75,000. The following table shows the tax calculation under the new and old regimes: Particulars Old Tax Regime Proposed New Tax Regime Gross Salary 7,75,000 7,75,000 Interest deduction on housing loan (self-occupied) deduction/HRA exemption – – Standard Deduction -50,000 -75,000 Gross Total Income 7,25,000 7,00,000 Deduction under Section 80C -50,000 – Deduction under Section 80D – – Deduction under Section 80CCD(1B) – – Total Taxable Income 6,75,000 7,00,000 Tax 47,500 20,000 Rebate – -20,000

TDS is a specific amount that is deducted when a certain payment like salary, commission, rent, interest, professional fees, etc. is made.The TDS rates are set on the basis of the age bracket and income of different individuals. The person who makes the payment deducts tax at the source, while the person who receives a payment/income has the liability to pay tax. It lowers tax evasion because the tax will be collected at the time of making a payment. TDS or tax deducted at source is a deduction made by someone while making a payment or crediting the account, whichever is early. This could be your employer, customer or even a bank paying you interest on a fixed deposit. Before making a payment to you, the payer deducts and pays tax on your behalf to the Income tax department. You can claim/adjust TDS credit while filing your income tax return against income tax payable. You can view the details of the TDS credit in Form 26AS by logging into your income tax efiling account. What is TDS? TDS or Tax Deducted at Source is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest etc. by the persons making such payments. Usually, the person receiving income is liable to pay income tax. But the government with the help of Tax Deducted at Source provisions makes sure that income tax is deducted in advance from the payments being made by you. The recipient of income receives the net amount (after reducing TDS). The recipient will add the gross amount to his income and the amount of TDS is adjusted against his final tax liability. The recipient takes credit for the amount already deducted and paid on his behalf. This will help the government to collect the taxes in advance and to track the transactions in an effective manner. Example of TDS Let’s assume that a start-up company pays Rs.90,000 as rent every month to whoever owns the property. The TDS applicable to the amount is 10%, so the company must subtract Rs.9,000 and pay Rs.81,000 to the property owner. In this case, the owner of the property will receive Rs.81,000 following TDS. The owner can add the gross amount of Rs.90,000 to his income, thereby allowing him to take credit for the Rs.9,000 that has already been deducted by the company. Types of TDS Salary Amount under LIC Bank Interest Brokerage or Commission Commission payments Compensation on acquiring immovable property Contractor payments Deemed Dividend Insurance Commission Interest apart from interest on securities Interest on securities Payment of rent Remuneration paid to the director of a company, etc Transfer of immovable property Winnings from games like a crossword puzzle, card, lottery, etc. When Should TDS be Deducted and by Whom? Any person making specified payments mentioned under the Income Tax Act is required to deduct TDS at the time of making such specified payment. But no TDS has to be deducted if the person making the payment is an individual or HUF whose sales from business or profession doesn’t exceed Rs.1 crore or Rs.50 lakhs, respectively. However, in case of rent payments made by individuals and HUF exceeding Rs 50,000 per month, are required to deduct TDS @ 5% even if the individual or HUF is not liable for a tax audit. Also, such Individuals and HUF liable to deduct TDS @ 5% need not apply for TAN. Your employer deducts TDS at the income tax slab rates applicable. Banks deduct TDS @10%. Or they may deduct @ 20% if they do not have your PAN information. For most payments rates of TDS are set in the income tax act and TDS is deducted by the payer basis of these specified rates. If you submit investment proofs (for claiming deductions) to your employer and your total taxable income is below the taxable limit – you do not have to pay any tax. And therefore no TDS should be deducted from your income. Similarly, you can submit Form 15G and Form 15H to the bank if your total income is below the taxable limit so that they don’t deduct TDS on your interest income. In case you have not been able to submit proofs to your employer or if your employer or bank has already deducted TDS and your total income is below the taxable limit) – you can file a return and claim a refund of this TDS. The complete list of Specified Payments eligible for TDS deduction along with the rate of TDS. How to Deposit TDS? Tax Deducted at Source has to be deposited via Income Tax Portal based on the TAN login. Direct tax payments facility has been migrated from OLTAS ‘e-payment: Pay Taxes Online’ to e-Pay Tax facility of e-Filing portal. You have to click on ‘e-Pay Tax’ option of Income Tax Department on https://www.incometax.gov.in/ to make direct tax payments including TDS. How and When to file TDS returns? Form No Transactions reported in the return Due date Form 26Q TDS on all payments except salaries Q1 – 31st July Q2 – 31st October Q3 – 31st January Q4 – 31st May Form 24Q TDS on Salary Q1 – 31st July Q2 – 31st October Q3 – 31st January Q4 – 31st May Form 27Q TDS on all payments made to non-residents except salaries Q1 – 31st July Q2 – 31st October Q3 – 31st January Q4 – 31st May Form 26QB TDS on sale of property 30 days from the end of the month in which TDS is deducted Form 26QC TDS on rent 30 days from the end of the month in which TDS is deducted TDS Credits in Form 26AS It is important to understand how TDS is linked to your PAN. TDS deductions are linked to PAN numbers for both the deductor and deductee. If TDS has been deducted from any of your income you must go through the Tax Credit Form 26AS. This form is a consolidated tax statement that is available to all PAN holders. Since all TDS is linked to your PAN, this form lists out the details

The Income Tax Department is going to launch its new e-filing portal on 7th June 2021 to make the routine ITRs filing process easier and hassle-free. This is another initiative by the Central Board of Direct Taxes (CBDT) towards providing ease of compliance to its taxpayers and other stakeholders. In preparation for this launch and migration activities, the existing portal of the IT Department would not be available to taxpayers as well as other external stakeholders for a brief period of 6 days i.e. from 1st June 2021 to 6th June 2021. What is New in the Advanced Portal Easy filing of ITRs and speedy processing to avail returns and refunds on the ITRs is an important upgrade to the site. Enhanced security, along with multiple ways to log in to your account. Improved, user-friendly dashboard that is simple to navigate. The interface is readable and the very role-based, categorized menus assist the processing of commands and edits made to your profile. The ‘Help’ section is the most notable feature. It hosts a myriad of videos and other forms of content like articles, user manuals, detailed FAQs, that aid in understanding the workings of the site as well as the procedures on the site. Adding on to the Help, the updated site also has a dedicated call centre for taxpayer assistance. A chatbot and live agents on request are always active to help with the queries and functionalities. Alongside a multitude of ways to log in and ensure the security of your account, there are equally many ways to pay your taxes and seek returns. Filing ITR forms 1 and 4 (online and offline) and ITR form 2 (offline) can be done using free of cost software that easily and swiftly processes the tax requests. CBDT mentioned that the facilities for ITRs 3, 5, 6, and 7, facilities will soon be made available. The dashboard interface also makes it easier for the user to update and keep track of personal details without a hitch of doubt. The dashboard also provides updates about pending actions, interactions, and uploads the user is yet to take action upon. Soon after the transitions from the older site to the newer are done and the users are acquainted, the MoF promised to roll out a mobile application for Android and iOS. Features Of New Income Tax E-Filing Portal ITR Processing: The new user-friendly portal will immediately process a taxpayer’s income tax return. This will enable faster refunds to the taxpayers. Free ITR Preparation Software: The taxpayers will benefit from the free ITR preparation software – Excel-based as well as Java based utility. Every year after considering the changes in ITR forms, the department releases the ITR forms specific to each financial year. Taxpayers can prepare returns by downloading the ITR preparation software or also prepare and submit online within the website itself. The interactive questions available in the software will make the e-filing process simpler. Call Centre Services: The new web portal is integrated with a ‘new call centre’ for immediate response to queries. Additionally, detailed FAQs, tutorials, videos, and chatbot/live agents address taxpayers’ issues. Single Dashboard Interaction: A taxpayer can see all the interactions, uploads, and pending actions in a single dashboard along with the follow-up action. Multiple Payment Options: The new portal offers multiple payment options for taxpayers. These options include RTGS/ NEFT, credit card, UPI, and net banking via any taxpayer’s account in any bank. It has enabled easy tax payment.   Mobile Application: The income tax department has launched the Aaykar Setu app that helps taxpayers understand taxation and provides solutions to many of their queries. The app was launched in July 2017. The app provides utilities such as Ask IT (answers to your queries), Tax calculation Tools, Apply for PAN online, Pay your taxes online, Tax Gyaan etc.,  Pre-filled ITRs: The new portal allows the pre-filling of some details related to certain incomes. These can relate to Salary, house property, business/profession, etc. In addition, 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. Annual Information Statement (AIS): It consists of a comprehensive view of information for a taxpayer displayed in Form 26AS. Taxpayers can provide feedback on information displayed in AIS. AIS shows both reported value and modified value (i.e. the value after considering taxpayer feedback) under each section (i.e. TDS, SFT, and Other information). The National Faceless Appeals Centre (NFAC): It has been set up to implement the Scheme and facilitate the centralized conduct of e-appeal proceedings. This includes assigning appeals for disposal to Commissioners of Income Tax (Appeal) units through an automated allocation system. Electronic verification: Taxpayers can electronically verify their returns using methods such as Aadhaar OTP, net banking, or digital signature. Communication with the Income Tax Department: Taxpayers can receive notices, updates, and communicate with the Income Tax Department through the portal. The notices, responses/submissions and orders etc., will be available within the income tax portal itself, without the requirement to chase behind the income tax officials. Pre-validate bank account to get income tax refund: Upon the filing of ITRs, the income tax department will review them and process the refund, if any. Such refunds are now transferred electronically to your bank account linked with your PAN.  Taxpayers Update Re-register their Digital Signature Certificate (DSC) as the old registered DSCs are not migrated due to security issues. They are advised to update the user ID and mobile number under primary contacts in their profile, Link Aadhaar and pre-validate bank account if not done previously and Reset e-Filing Vault Higher Security Options FAQs When did the income tax department launch e-filing portal 2.0? The e-filing portal 2.0 was launched on 7th June 2021. What are the services that taxpayers can access pre & post login to the new IT portal? Taxpayers can access options on the bar like Home, Individual/HUF, Company, Non-Company, Tax Professionals & Others, along with additional options called Downloads and Help before logging in to the new portal. Moreover,

Taxpayers use Income Tax Returns (ITR) to provide reports to the IRS about their earnings and tax payments. It is essential for individuals, businesses, and even various different entities to file their Income Tax Returns within the stipulated timelines. Filing on time saves the unnecessary penalty that may incur on failure or delayed payment of taxes. What is Income Tax Return (ITR)? An Income Tax Return (ITR) is a form or document that individuals, businesses, and other entities use to report their annual income, deductions, exemptions, and tax liabilities to the tax authorities. It is a declaration of their taxable income and the taxes they owe or are eligible to receive as a refund. The Income Tax Return allows taxpayers to provide comprehensive information about their financial transactions, sources of income, and expenses to the tax authorities. It helps determine the taxpayer’s tax liability and enables the government to assess and collect taxes effectively. Financial Year (FY) and Assessment Year (AY) for Filing ITR From an income tax perspective, the financial year (FY) is the year in which you earn your income. The assessment year (AY) is the year following the financial year when you evaluate the previous year’s income and pay taxes on it. For example, if your financial year is from April 1, 2023, to March 31, 2024, it is known as FY 2023-24. The assessment year for the income earned during this period would start after the financial year ends, from April 1, 2024, to March 31, 2025. Therefore, the assessment year would be AY 2024-25. When is the Last Date to File ITR 2024? Last Date to File Income Tax Return (ITR) for FY 2023-24 (AY 2024-25) Without Late Fees: 31st July 2024. If you miss the July 31st deadline, you can still file a belated return by December 31, 2024. However, late filing may result in penalties and interest charges. Taxpayers are typically required to file their ITR annually, providing details of their income and relevant financial information for a specific period, such as a financial year (FY). ITR filing start date for AY 2024-25 is 1st April 2024, and last date is 31st July 2024. Missing out on the Income Tax Return filing last date can lead to penalties and notices from the Income Tax Department. To avoid these notices, make sure you file your ITR accurately and within the specified deadlines. Why You Must File Your ITR Before July 31 Avoid Penalties and Interest Charges: To avoid any fines and penalties under different sections of the Income Tax Act. Late filing of ITR can attract penalties upto Rs.5000 on income above Rs.5 lakh and Rs.1,000 on income upto Rs.1,00,000. Accurate Tax Reporting: Early filing gives you ample time to gather all necessary documents and information. This helps ensure your tax return is accurate, reducing the likelihood of errors or omissions. Claiming Refunds: Timely filing is essential for claiming refunds. If you’ve paid more tax than you owe, filing early ensures you receive your refund promptly from the Income Tax Department. Loss Adjustment: Timely filing allows you to carry forward losses incurred during the year. These losses can be adjusted against future profits, reducing your tax liability in subsequent years. Verification within 30 Days: After filing, you must verify your ITR within 30 days under tax laws. Filing early provides sufficient time to verify your return and rectify any errors if needed. Maintaining a Good Credit Score: Banks and financial institutions often require ITR as proof of financial stability when you apply for loans or credit cards. Filing your ITR on time showcases financial discipline, potentially improving your chances of securing credit on favorable terms. Avoiding Last-Minute Rush: Filing early helps you avoid the rush closer to the deadline, reducing stress and minimizing the risk of making hasty errors. Effective Financial Planning: Early filing allows you to plan your finances more effectively for the upcoming year, based on your tax obligations and refunds. Income Tax Filing Due Dates for FY 2023-24 (AY 2024-25) Category of Taxpayer Due Date for Tax Filing – FY 2023-24*(unless extended) Individual / HUF/ AOP/ BOI     (books of accounts not required to be audited) 31st July 2024 Businesses (Requiring Audit) 31st October 2024 Businesses requiring transfer pricing reports   (in case of international/specified domestic transactions) 30th November 2024 Revised return 31 December 2024 Belated/late return 31 December 2024 Updated return 31 March 2027 (2 years from the end of the relevant Assessment Year) Consequences of Missed Income Tax Return Due Date Up to Rs. 5,000: For incomes exceeding Rs. 5 lakh. Rs. 1,000: For incomes below Rs. 5 lakh. No penalty: No penalty if your income is below the taxable limit. Interest on Tax Owed: If you owe any tax, you’ll also have to pay interest on it from the due date until you pay it. This interest is calculated at one percent per month or part of a month on the unpaid tax amount from the due date until the date of filing. Delay in Refunds: If you’re due a refund, you won’t receive it until you file your return. Ineligibility to Carry Forward Losses: Missing the deadline results in the inability to carry forward losses under most heads of income, except for house property. This is particularly disadvantageous for businesses and investors, as it can lead to a significant financial setback. Reduced Time for Rectifications and Revisions: Late filing reduces the available time for correcting errors or revising the return. Typically, the deadline for revising an ITR is until the end of the assessment year. Filing late compresses this timeline, limiting the opportunity to rectify mistakes effectively. Prosecution: The income tax department can initiate prosecution proceedings against you. This could lead to imprisonment for up to seven years and a fine. Difficulty Processing Loans: Some banks and financial institutions may not process loan applications from people who haven’t filed their ITRs. Selection of Old Tax Regime: It is important to note that taxpayers must file their income tax returns by the due date, which is July 31st. If they fail to file by this deadline, they will not be able to choose

The income tax department has categorised taxpayers based on income, source of income and many other factors to ensure easy compliance. Taxpayers with incomes from different categories, thus, have to download and fill out different income tax return forms. Who should file the Income Tax Return? People having deposits of amount exceeding Rs.1 crore or more in a current account. Anyone who wants to claim a tax refund. Person who wants to carry forward or set-off losses should file return irrespective of income/loss. Person who needs to produce returns as an income proof for loans etc. People having income from foreign assets. What is Form-ITR-1 (SAHAJ) ? ITR-1 form (SAHAJ) is simplest Income Tax Return form. This form is to be filed by Resident Individuals. Income Tax Department has divided these forms on the basis of source of income and category of taxpayer. In this case also there are guidelines as to that who can file their return of income under ITR-1. Applicability of ITR-1 This form can be used by a resident individual. The income of the person should be less than Rs.50 lakhs. The source of income should be salary, house property or income from other sources. A person for whom, income from any of above sources is clubbed for spouse/minor. Has agriculture income up to Rs.5000/- What is ITR-2? TR-2 is utilized by individuals and Hindu Undivided Families (HUFs) for filing their Income Tax returns when they do not earn income from business or profession. Typically, it is used by those receiving income from sources like salary, pension, capital gains, and other sources. Who is eligible to file ITR-2 for AY 2024-25? ITR-2 form is for individuals and HUF receiving income other than income from ‘Profits and Gains from Business or Profession’. Thus, individuals with income from the following sources are eligible to file Form ITR-2: Income from salary/pension Income from house property (income can be from more than one house property) Income from capital gains/loss on sale of investments/property (both short-term and long-term) Income from other sources (including winning from lottery, bets on racehorses and other legal means of gambling) Agricultural income of more than Rs 5,000 Resident not ordinarily resident and a non-resident The total income from the above sources may exceed Rs 50 lakh. Understanding Forms ITR-1 and ITR-2 Applicable Basis ITR-1 ITR-2 General Information Basic details like name, address, DOB, type of employer, option to avail new and old tax regime Gross Total Income Income Details under all heads of income. Income under all heads of income. Details of Foreign Source Income, Exempt Income, Tax Relief u/s 90,90A and 91 Deductions Deductions to be claimed under chapter VI-A. Details for medical insurance and donations Deduction to be claimed under chapter VI-A. Deduction for medical insurance, donations, donation for scientific research or rural development. Taxable total income Computation of  Total income     Computation of Tax Payable     Details of tax payable, Details of Advance Tax, Self-Assessment Tax and TDS deducted Other Schedules   Past year and current year losses to be carried forward Statement of income after set-off of current year and carried forward losses. Schedule for Assets Outside India Schedule for calculation of AMT and AMTC. Schedule of Assets and Liabilities if income more than Rs.50 lakhs. Other Information Bank Account for refund of tax Verification and Submission Verification using EVC, Aadhaar OTP Who cannot file ITR-2 for AY 2024-25? Any individual or HUF having income from business or profession Individuals who are eligible to fill out the ITR-1 form (Sahaj) Major changes in ITR-2 in AY 2023-24 and AY 2024-25 Schedule VDA: Income from transfer of Virtual Digital Assets A new schedule is added to compute income from cryptocurrencies or other virtual Digital assets Relief u/s 89A: An additional clause has been added related to relief to residents who have income from foreign retirement benefits accounts: Point No. 1(e)4: Income taxable during the previous year on which relief u/s 89A was claimed in any earlier previous year Sec 10(12C): In other Exempt Income one new exemption added under Sec 10(12C) – Any payment from the Agniveer Corpus Fund to a person enrolled under the Agnipath Scheme or to his nominee. Schedule SI: New point added 115BBH – Income by way of transfer of Virtual Digital assets Section 80 CCH: Under Chapter VI A deduction new clause was added- The entire amount contributed by applicants employed by the Central Government to the Agniveer Corpus Fund is eligible for tax deductions. ARN: In schedule 80G clause D additional information is required for ARN (donation Reference number) FAQs Which ITR to file if you have only income from the sale of shares or mutual funds? If you have only income from the sale of shares and securities or mutual funds, you can file ITR-2. I am supposed to file ITR-2 and not ITR-1 if my maximum exempted income exceeds Rs.5,000. I am confused – what qualifies as exempt income? Incomes that are not taxable are specified under Section 10 of the Income Tax Act. Such incomes are excluded from the total income while calculating the taxes. The income can be partly or fully exempt depending on the guidelines or conditions prescribed in Section 10. Allowances that may be exempt to a certain extent include HRA, LTA, transport allowance, etc. Gratuity, leave encashment, and pension may be exempt under Section 10 of the Act.

To get the consolidated file from TRACES, we need to get the consolidated file. It is relevant to the financial year, quarter, and form type. If you want to download the file or the consolidated file, check that the states of the submitted return are correct. It needs to be “Statement Processed with Default or Statement Processed without Default”. The portal won’t fetch the file in case of a paper return. Thus, we will guide you through a series of steps to import the consolidated file from TRACES.  The Entire Procedure to Download Consolidated File Step 1 – Getting into the TRACES- The first step is to log into your TRACES Account using the user ID, Password, and Captcha. Along with it, you need to provide TAN or PAN. That will take you inside your Consolidated File From TRACES.  Step 2 – To the Conso File- The second part is to navigate to the Conso File under the Statement/Payments Section. It will help you to get to the window for putting the request for downloading the Consolidated File From TRACES. It will be named ‘Request for Conso File”. Step 3 – Putting down the details-The window will need you to fill in the ‘Financial Year’, ‘Quarter’, and the ‘Form Type’ through the drop-down menus in the ‘Request for Conso File’ window. Then you click on the ‘Go’ button on the right side.  Step 4 – Validate the KYC to Proceed- You will have two options for yourself, either through Digital Signature Support KYC Validation or through Normal KYC Validation. Step 4.1 – Digital Signature Support KYC Validation Click on Validate DSC after selecting the financial year, quarter, and form type. Enter the DSC Password in the provided space, click ‘ok’, select the DSC Certificate, and click on the ‘Sign’ Button. You must have the Token Number from the TDS Return Filed for the Financial Year and Quarter you are fetching the Conso File for. Enter it in the space provided. Check the checkbox for ‘Nil Challan’ or ‘Book Adjustment.’ BSR Code, Challand Serial Number, Challan Amount, and the date of tax deposition must be entered into the Challan Details section. Enter the Unique PAN-Amount Combination – it will be in the TDS Return and amount deposited. After the success page pops up on the screen, it is time to click on the ‘Request for Conso File’ button.  Step 4.2 – Normal KYC Validation If you select the Normal KYC Validation, you must select the financial year, quarter, and form type without the DSC Password.  After selecting the Normal KYC Validation option, you will be taken to the page to put down more information for the further steps.  You must have the Token Number from the TDS Return Filed for the Financial Year and Quarter you are fetching the Conso File for. Enter it in the space provided. Check the checkbox for ‘Nil Challan’ or ‘Book Adjustment.’ BSR Code, Challand Serial Number, Challan Amount, and the date of tax deposition must be entered into the Challan Details section. Enter the Unique PAN-Amount Combination – it will be in the TDS Return and amount deposited. After the success page pops up on the screen, it is time to click on the ‘Request for Conso File’ button.  You will have the authentication code generated for you on the success screen. Copy that authentication code, paste it into the Authentication Code Blank Box, and click on ‘Request for Conso File’.  Step 5 – Check the Request Number- After the Authentication and Request success, you will get a screen with the Request Number that says you can download it from the ‘Downloads’ Section. Step 6 – Download the File- Downloads > Request Downloads. You can either enter the request number and date or go for the view all section. Check the status of your request and if available, click on the download button. Step 7 – The Password- Last is the password to the HTTP Download of the zip file. To Open it, you need to enter the ‘TAN_Request Number‘ in all CAPS. Some Important Info To Keep in mind before you Download the Conso File. Consolidated File From TRACES processes the statement from the Financial Year of 2007-2008 onwards. That means, if you want the Conso File from before that financial year, you won’t be able to fetch it from TRACES.  It is important to check the status of the Conso File’s Request before you can download it. After the status is available, you can download it from HTTP Download or through Download Manager. The file format of the download will be ZIP Format. Therefore, you need to use an extractor tool and shift using proper tools to the software for any corrections. TRACES cannot provide you with any Conso File for any Paper Return filed. Hence, the Paper Return in the file type will not let you download the Conso File. The Digital Signature Support can only help you if you have updated it on TRACES. A previous update is compulsory; else, you will be denied the e-Signature and have to choose the Normal Method. It is important to remember that the Conso File is Password-Protected. Hence, you need to use the unique combination of your TAN and Request number to open the file. The format is ‘TAN_Request Number” in all Caps.  There are four details for the Request Statues: Submitted: The request has been successfully submitted. The Request is Processing Available: The consolidation File is ready to be downloaded Disabled: You may have submitted a duplicate request for the Conso File Failed: Please Content CPC (TDS) for support. FAQs What is a TDS Conso File? TDS Conso File is a consolidated file that contains all the details of the TDS (Tax Deducted at Source) returns filed by a deductor for a particular financial year. It includes information about the deductions made and deposited with the government. What is the TRACES portal? TRACES (TDS Reconciliation Analysis and Correction Enabling System) is an online portal managed by the Income Tax Department of India.

Sec 194Q introduced in the finance act 2021 to cover the high volume transaction in the ambit of TDS. Under this section the buyer is liable to deduct tax on the purchase of goods exceeding threshold limit. The primary motive of this section is to increase transparency and be able to track large transactions. What is Section 194Q of Income Tax Act? Section 194Q of Income Tax Act, 1961 was introduced on July 1, 2021, by the Central Board of Direct Taxes. This section deals with the Tax Deducted at Source on the purchase of goods. It is predominantly a buyer-specific section that specifies the TDS provisions for buyers who purchase goods from Indian sellers. Under section 194Q, buyers having purchases exceeding 50 lakhs in a previous year will have to pay a TDS at the rate of 0.1%. However, the same is not applicable to purchases made from a seller outside India. Let’s take an example –Mr. A., located in Delhi, bought goods worth 60 lakhs from Mr. B in Rajasthan in the previous year. Since the purchases exceed the threshold of INR 50 lakhs, the TDS will be calculated on (60 lakhs – 50 lakhs), i.e., 10 lakhs @ 0.1%. Who does Section 194Q of the Income Tax Act apply to? Section 194Q is applicable to buyers making purchases in India in the following cases – Any buyer with a total turnover, gross receipts, or sales exceeding 10 crores in the previous financial year. The buyer purchases goods from an Indian seller and is liable to make payment to a resident Indian seller. The payment made should be for the purchase of goods exceeding the aggregate value of 50 lakhs. The introduction of section 194Q helps the government to trace the huge amount of transactions without compliance of various tax provisions and to identify the cases of under disclosure of Income What is the role of GST in Section 194Q? GST is excluded from the calculation of turnover GST is included in the calculation of TDS at the rate of 0.1% When to deduct TDS? Particulars Applicability/ Non-applicability of TDS u/s 194Q TDS is deducted at the time of credit of the amount in the account of the seller; and Agreement/ contract between buyer and seller indicates GST component separately. TDS provisions u/s 194Q will not be applicable to the GST component. When TDS has been deducted on the payment basis (as payment is earlier than credit) TDS provisions u/s 194Q will apply to the GST component (i.e. TDS is deductible on the whole amount) Non-furnishing of PAN If a seller does not furnish Permanent Account Number (PAN) to the buyer, deductible tax at source (TDS) would be at 5% instead of 0.1%. **Without PAN, the applicable tax rate in other cases is 20%. For Section 194Q, the TDS rate is 5%.** TDS Return: Form 26Q The due date for filing a TDS return is July 31, October 31, January 31, and May 31, respectively, for a quarter ending 30th June, 30th September, 31th December, and 31st March. What Happens If You Fail to Comply With Section 194Q of the Income Tax Act? If you fail to comply with the provisions and requirements of section 194Q of the Income Tax Act, it might attract severe penalties and consequences. Given below are the penalties for non-compliance on section 194Q – If the buyer does not deduct TDS, it attracts a penalty under section 40A (IA). As per this section, if the buyer fails to deduct TDS, 30% of the total purchases on which TDS has not been deducted will be disallowed as an expense. Consequently, this 30% will be treated as your income and will be liable to tax. 30% of the total purchases will be clubbed into your net income and taxed along with your total income. Exemptions Available Under Section 194Q of the Income Tax Act If the buyer does not primarily reside in India and the goods purchased are not directly connected with India, the buyer does not have to deduct TDS. The buyer does not need to deduct TDS in the year of incorporation. For example, if your company has been incorporated in the current financial year, you are not required to deduct TDS. If the buyer purchases products from a seller whose income is exempt from tax, then the buyer does not have to deduct TDS. If the tax is deducted under section 206C, excep31str transactions on which 206C(1H) is applicable, Such transaction shall not be taxable under section 194Q. Any purchases made by the central or state government institutions are not required to deduct TDS. If any transaction attracts both section 194Q and section 194O, tax shall be deducted under section 194O by the e-commerce platform provider. However, if the e-commerce platform fails to deduct the TDS, the buyer is responsible for the same. If a stock exchange purchases goods or commodities, it is exempted from deducting TDS. Transactions involving renewable energy and electricity are also exempted from deducting TDS. When The Person Is Liable To Deduct TDS? The person being the buyer will deduct TDS at the time which is earlier of the following: At the time of credit of such sum to the account of the seller. At the time of payment which is obtain in any mode. TDS Rate The tax deduction at source(TDS) is deducted at 1% on the purchase of goods if the seller has its PAN If the seller does not hold PAN then 5% TDS will be deducted. Due Date Of Depositing TDS With Government The due date for TDS payment is always the 7th day of the next month, with a few exceptions. For example, if an organization wants to pay TDS for the month of July, then the TDS payment due date for the same will be the 7th of August.For the month of  March, the due date will be 30th April. Due Dates Of Returns Quarter Period Due date Q1 April – June 31st July Q2 July –