Income Tax Salaried Individuals for FY 2020-21 AY 2021-22

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Rajesh SarrafLeave a Comment on Income Tax Salaried Individuals for FY 2020-21 AY 2021-22
1. ITR-1 (SAHAJ) – Applicable for Individual

यह रिटर्न एक निवासी (सामान्य निवासी के अलावा अन्य) के लिए लागू है, जिसकी कुल आय निम्नलिखित में से किसी भी स्रोत से ₹50 लाख तक है

Salary / Pension One House Property Other sources (Interest, Family Pension, Dividend, etc.) Agricultural Income up to ₹ 5,000

Note: ITR-1 का उपयोग वह व्यक्ति नहीं कर सकता जो:
(a) एक कंपनी का डायरेक्टर हो
(b) पिछले वर्ष के दौरान किसी भी समय किसी भी गैर-सूचीबद्ध equity शेयरों का आयोजन किया है
(c) कोई भी सम्पति इंडिया से बाहर हो
(d) has signing authority in any account located outside India
(e) इंडिया से बाहर किसी भी स्रोत से इनकम
(f) is a person in whose case tax has been deducted u/s 194N
(g) is a person in whose case payment or deduction of tax has been deferred on ESOP

 

2. ITR-2 – Applicable for Individual and HUF

यह रिटर्न व्यक्तिगत और हिंदू अविभाजित परिवार के लिए लागू है (HUF)

Not having Income under the head Profits or Gains of Business or Profession Who is not eligible for filing ITR-1
3. ITR-3- Applicable for Individual and HUF

यह रिटर्न व्यक्तिगत और हिंदू अविभाजित परिवार के लिए लागू है (HUF)

Having Income under the head Profits or Gains of Business or Profession Who is not eligible for filing ITR-1, 2 or 4
4. ITR-4 (SUGAM) – Applicable for Individual, HUF, and Firm (other than LLP)

This return is applicable for an Individual or Hindu Undivided Family (HUF), who is Resident other than Not Ordinarily Resident or a Firm (other than LLP) which is a Resident having Total Income up to ₹ 50 lakh and having income from Business and Profession which is computed on a presumptive basis and income from any of the following sources:

Salary / Pension One House Property Other sources (Interest, Family Pension, Dividend, etc.)

Agricultural Income up to ₹ 5,000

 Income from Business /  Profession computed on presumptive basis u/s 44AD / 44ADA / 44AE

Note: ITR-4 cannot be used by a person who:
(a) एक कंपनी का डायरेक्टर हो
(b) पिछले वर्ष के दौरान किसी भी समय किसी भी गैर-सूचीबद्ध equity शेयरों का आयोजन किया है
(c) कोई भी सम्पति इंडिया से बाहर हो
(d) has signing authority in any account located outside India
(e) इंडिया से बाहर किसी भी स्रोत से इनकम
(f) is a person in whose case payment or deduction of tax has been deferred on ESOP

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

Forms Applicable

1. Form 12BB – Particulars of claims by an employee for deduction of tax (u/s 192)
Provided by Details provided in the form
An Employee to his Employer(s) Evidence or particulars of HRA, LTC, Deduction of Interest on Borrowed Capital, Tax Saving Claims / Deductions for the purpose of calculating Tax to be Deducted at Source (TDS)
2. Form 16 – Details of Tax Deducted at Source on salary (certificate u/s 203 of the Income Tax Act, 1961)
Provided by Details provided in the form
An Employer(s) to his Employee Income of such person, Deductions / Exemptions and Tax Deducted at Source for the purpose of Computing Tax Payable / Refundable
3. Form 16A – Certificate u/s 203 of the Income Tax Act, 1961 for TDS on Income other than Salary
Provided by Details provided in the form
Deductor to Deductee Form 16A is a Tax Deducted at Source (TDS) Certificate issued quarterly that captures the amount of TDS, Nature of Payments, and the TDS Payments deposited with the Income Tax Department
4. Form 67- Statement of Income from a country or specified territory outside India and Foreign Tax Credit
Submitted by Details provided in the form
Taxpayer Income from a country or specified territory outside India and Foreign Tax Credit claimed
5. Form 26AS – Annual Information Statement
Provided by Details provided in the form

Income Tax Department (It is available in TRACES portal that may be accessible after logging on to Income Tax e-Filing portal or Internet Banking)
  • Tax Deducted /  Collected at Source
  • Advance Tax /  SelfAssessment Tax
  • Specified Financial Transactions
  • Demand /  Refund
  • Pending /  Completed Proceedings
6. Form 15G – Declaration by a taxpayer (not being a Company or Firm) claiming certain receipts without deduction of tax
Submitted by Details provided in the form
A Resident Individual or HUF or any other person (other than Company / Firm) to Bank for not deducting TDS on Interest Income Estimated Income for the FY
7. Form 15H – Declaration to be made by an individual (who is sixty years age or more) claiming certain receipts without deduction of tax
Submitted by Details provided in the form
A Resident Individual, 60 years or more to Bank for not deducting TDS on Interest Income Estimated Income for the FY
8. Form 10E – Form for furnishing particulars of Income for claiming relief u/s 89(1) when Salary is paid in arrears or advance
Provided by Details provided in the form
An Employee to the Income Tax Department
  • Arrears / Advance Salary
  • Gratuity
  • Compensation on Termination
  • Commutation of Pension

Tax Slabs for AY 2021-22

Individuals and HUFs can opt for the Existing Tax Regime or the New Tax Regime with a lower rate of taxation (u/s 115 BAC of the Income Tax Act)

The taxpayer opting for concessional rates in the New Tax Regime will not be allowed certain Exemptions and Deductions (like 80C, 80D,80TTB, HRA) available in the Existing Tax Regime.

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For Individual (resident or non-resident) less than 60 years of age anytime during the previous year:

Existing Tax Regime New Tax Regime u/s 115BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up to ₹ 2,50,000 Nil Up to ₹ 2,50,000 Nil
₹ 2,50,001 – ₹ 5,00,000 5% above ₹ 2,50,000 ₹ 2,50,001 – ₹ 5,00,000 5% above ₹ 2,50,000
₹ 5,00,001 – ₹ 10,00,000 ₹ 12,500 + 20% above ₹ 5,00,000 ₹ 5,00,001 – ₹ 7,50,000 ₹ 12,500 + 10% above ₹ 5,00,000
Above ₹ 10,00,000 ₹ 1,12,500 + 30% above ₹ 10,00,000 ₹ 7,50,001 – ₹ 10,00,000 ₹ 62,500 + 15% above ₹ 7,50,000
₹ 10,00,001 – ₹ 12,50,000 ₹ 1,00,000 + 20% above ₹ 10,00,000
₹ 12,50,001 – ₹ 15,00,000 ₹ 1,50,000 + 25% above ₹ 12,50,000
Above ₹ 15,00,000 ₹ 2,12,500 + 30% above ₹ 15,00,000
group2248

For Individual (resident or non-resident), 60 years or more but less than 80 years of age anytime during the previous year:

Existing Tax Regime New Tax Regime u/s 115BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up to ₹ 3,00,000 Nil Up to ₹ 2,50,000 Nil
₹ 3,00,001 – ₹ 5,00,000 5% above ₹ 3,00,000 ₹ 2,50,001 – ₹ 5,00,000 5% above ₹ 2,50,000
₹ 5,00,001 – ₹ 10,00,000 ₹ 10,000 + 20% above ₹ 5,00,000 ₹ 5,00,001 – ₹ 7,50,000 ₹ 12,500 + 10% above ₹ 5,00,000
Above ₹ 10,00,000 ₹ 1,10,000 + 30% above ₹ 10,00,000 ₹ 7,50,001 – ₹ 10,00,000 ₹ 62,500 + 15% above ₹ 7,50,000
₹ 10,00,001 – ₹ 12,50,000 ₹ 1,00,000 + 20% above ₹ 10,00,000
₹ 12,50,001 – ₹ 15,00,000 ₹ 1,50,000 + 25% above ₹ 12,50,000
Above ₹ 15,00,000 ₹ 2,12,500 + 30% above ₹ 15,00,000
group2248

For Individual (resident or non-resident) 80 years of age or more anytime during the previous year:

Existing Tax Regime New Tax Regime u/s 115BAC
Income Tax Slab Income Tax Rate Income Tax Slab Income Tax Rate
Up to ₹ 5,00,000 Nil Up to ₹ 2,50,000 Nil
₹ 5,00,001 – ₹ 10,00,000 20% above ₹ 5,00,000 ₹ 2,50,001 – ₹ 5,00,000 5% above ₹ 2,50,000
Above ₹ 10,00,000 ₹ 1,00,000 + 30% above ₹ 10,00,000 ₹ 5,00,001 – ₹ 7,50,000 ₹ 12,500 + 10% above ₹ 5,00,000
₹ 7,50,001 – ₹ 10,00,000 ₹ 62,500 + 15% above ₹ 7,50,000
₹ 10,00,001 – ₹ 12,50,000 ₹ 1,00,000 + 20% above ₹ 10,00,000
₹ 12,50,001 – ₹ 15,00,000 ₹ 1,50,000 + 25% above ₹ 12,50,000
Above ₹ 15,00,000 ₹ 2,12,500 + 30% above ₹ 15,00,000
info

Note:

1. The rates of Surcharge and Health & Education cess are same under both the tax regimes

2. Rebate u/s 87-A Resident Individual whose Total Income is not more than ₹ 5,00,000 is also eligible for a Rebate of 100% of income tax or ₹ 12,500, whichever is less. This Rebate is available in both tax regimes

Surcharge, Marginal Relief and Health & Education Cess 

What is Surcharge?

सरचार्ज एक टैक्स पर टैक्स है। यह दिये गये टैक्स पर लगता है। इसे इनकम पर नहीं लगाया जा सकता है। जैसे- अगर आपके पास 100 रुपये है जिसका टैक्स 30 रु. और इसपर सरचार्ज इसका 10% यानि 3 रूपये है।, यह लागू दरों के अनुसार गणना किए गए आयकर की राशि पर लगाया जाता है

  • 10% – Taxable Income above ₹ 50 lakh – up to ₹ 1 crore
  • 15% – Taxable Income above ₹ 1 crore – up to ₹ 2 crore
  • 25% – Taxable Income above ₹ 2 crore – up to ₹ 5 crore
  • 37% – Taxable Income above ₹ 5 crore
  • Maximum Surcharge on Income by way of Dividend or Income under the provisions of Sections 111A, 112A and 115AD is 15%
What is Marginal Relief?
Marginal relief is a Relief from Surcharge, provided in cases where the Surcharge payable exceeds the additional income that makes the person liable for Surcharge. The amount payable as Surcharge shall not exceed the amount of income earned exceeding ₹ 50 lakh, ₹ 1 crore, ₹ 2 crore or ₹ 5 crore respectively
What is Health and Education cess?
Health & Education cess @ 4% shall also be paid on the amount of income tax plus Surcharge (if any)

Investments / Payments / Incomes on which I can get tax benefit

Section 24(b) – Deduction from Income from House Property on interest paid on housing loan & housing improvement loan. In case of self-occupied property, the upper limit for deduction of interest paid on housing loan is  ₹ 2 lakh. However, this deduction is not available for a person opting for New Tax Regime.

Interest on loan u/s 24(b) allowable are tabulated below

Nature of Property When loan was taken Purpose of loan Allowable (Maximum limit)
Self-Occupied On or after 1/04/1999

Construction or purchase of house property

 ₹ 2,00,000
On or after 1/04/1999 For Repairs of house property ₹ 30,000
Before 1/04/1999 Construction or purchase of house property ₹ 30,000
Before 1/04/1999 For Repairs of house property ₹ 30,000
Let Out Any time Construction or purchase of house property Actual value without any limit

Tax deductions specified under Chapter VIA of the Income Tax Act  

These Deductions will not be available to a taxpayer opting for the New Tax Regime u/s 115 BAC, except for deduction u/s 80CCD (2) which will be applicable for New Tax Regime as well

80C, 80CCC, 80CD(1)

 Deduction towards payments made to

80C
  • Life Insurance Premium
  • Provident Fund
  • Subscription to certain equity shares
  • Tuition Fees
  • National Savings Certificate,
  • Housing Loan Principal
  • Other various items
80CCC

Annuity plan of LIC or another insurer towards Pension Scheme
80CD(1)
Pension Scheme of Central Government
 

 

 

Combined deduction limit of ₹ 1,50,000
80CCD(1B)
Deduction towards payments made to Pension Scheme of Central Government, excluding deduction claimed under 80CCD (1) Deduction limit of ₹ 50,000
80CCD2

Deduction towards contribution made by an employer to the Pension Scheme of Central Government

If Employer is a PSU, State Government  or Others Deduction limit of 10% of salary
If Employer is Central Government Deduction limit of 14% of salary
80D

Deduction towards payments made to Health Insurance Premium & Preventive Health check-up

For Self / Spouse or Dependent Children
₹ 25,000 (₹ 50,000 if any person is a Senior Citizen)
₹ 5,000 for preventive health check-up, included in above limit
For Parents
₹ 25,000 (₹50,000 if any person is a Senior Citizen)
₹ 5,000 for preventive health check-up, included in above limit

 

Deduction towards Medical Expenditure incurred on a Senior Citizen, if no premium is paid on health insurance coverage

For Self/    Spouse or Dependent Children Deduction limit of ₹ 50,000
For Parents Deduction limit of ₹ 50,000
8DD

Deduction towards payments made towards Maintenance or Medical treatment of a Disabled Dependent or Paid / Deposited any amount under a relevant approved scheme
  • A flat deduction of ₹ 75,000 available for a person with Disability, irrespective of expense incurred
  • The deduction is ₹ 1,25,000 if the person has a Severe Disability (80% or more)
80DD(1B)

Deduction towards payments made towards Medical treatment of Self or Dependant for a specified disease

 Deduction limit of ₹ 40,000 (₹ 1,00,000 if Senior Citizen)
80E
Deduction towards interest payments made on loan for higher education of Self or relative Total amount paid towards interest on loan taken
80EE
Deduction towards interest payments made on loan taken for acquisition of residential house property where the loan is sanctioned between 1st April 2016 to 31st March 2017 Deduction limit of ₹ 50,000 on the interest paid on loan taken
80EEA
Deduction towards interest payments made on loan taken for acquisition of residential house property for the first time where the loan is sanctioned between 1st April 2019 to 31st March 2022 & deduction should not have been claimed u/s 80EE Deduction limit of ₹ 1,50,000 on the interest paid on loan taken
80EEB
Deduction towards interest payments made on loan for the purchase of Electric Vehicle where the loan is sanctioned between 1st April 2019 to 31st March 2023 Deduction limit of ₹ 1,50,000 on the interest paid on loan taken
80G

Deduction towards Donations made to certain Funds, Charitable Institutions, etc.

Donation are eligible for deduction under the below categories

Without any limit 100% deduction, 50% deduction
Subject to qualifying limit 100% deduction, 50% deduction

 

 

Note: No deduction shall be allowed under this section in respect of donation made in cash exceeding  ₹ 2000/-
80GG

Deduction towards rent paid for house & applicable only for whom HRA is not part of Salary

The least of the following shall be allowed as deduction

Rent paid reduced by 10% of Total Income before this deduction ₹ 5,000 per month 25% of Total Income before this deduction
Note: Form 10BA to be filled for claiming this deduction.
80GGA

Deduction towards Donations made for Scientific Research or Rural Development

Donation are eligible for deduction under the below categories

Research Association or University, College or other Institution for

  • Scientific Research
  • Social Science or Statistical Research
Association or Institution for

  • Rural Development
  • Conservation of Natural Resources or for Afforestation
PSU or Local Authority or an association or institution approved by the National Committee for carrying out any eligible project
Funds notified by Central Government for

  • Afforestation
  • Rural Development
National Urban Poverty Eradication Fund as setup and notified by Central Government

Note: No deduction shall be allowed under this Section in respect of donation made in cash exceeding ₹  2000/- or if Gross Total Income includes income from Profit / Gains of Business / Profession
80GGC

Deduction towards Donations made to Political Party or Electoral Trust

 Deduction towards Donations made to Political Party or Electoral Trust
80TTA

Deduction on interest received on saving bank accounts by Non-Senior Citizens

 Deduction limit of
₹ 10,000/-
80TTB

Deduction on interest received on deposits by Resident Senior Citizens

 Deduction limit of
₹ 50,000/-
80U
 

Deductions for an individual taxpayer with Disability

Flat ₹ 75,000 deductions for a person with Disability, irrespective of expense incurred

Flat ₹ 1,25,000 deduction for a person with Severe Disability (80% or more), irrespective of expense incurred

Source: https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1

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Rajesh Sarraf

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