Eligibility

Applicability of professional tax: In India, professional tax is imposed on all types of trades and professions. Every employee of a private company operating in India is required to pay it. Professional tax registration is the responsibility of every business owner, who is also responsible for professional tax deductions and payments.

Professional tax for self-employed: Any self-employed professional who has a regular monthly income is required to pay the professional tax. The term “professional” refers to persons who work in specific professions such as accounting, media, and so on.

Who is exempted from paying online professional tax?

Only a few people are free from professional tax restrictions, and the exemptions vary according to whatever state you live in. Individuals who meet the following criteria are free from professional taxation:

• Badli employees in the textile industry
• Women employed exclusively as agents under the directorate of small savings or Mahila Pradhan
• Members of the armed forces
• Individuals with permanent physical disabilities
• The age varies by state
• Badli workers in the textile industry Kshetriya Bachat Yojana (Kshetriya Bachat Yojana) is a government-
• Parents or guardians of mentally handicapped people.

Benefits

Here are some of the reasons why a professional tax payment should never be missed.

• Judicial requirement: Employers in various Indian states are required by the judiciary to get professional tax registration. They must deduct and pay the service taxes of all employees who work under them after they have registered.
• Avoid paying penalties: Failure to register as a professional taxpayer results in significant fines that increase over time.
• Simple to follow: Professional tax standards are simple to follow. The registration procedures can be completed quickly, and the subsequent steps are also simplified.

• Deductions: On the basis of the professional tax paid, deductions can be claimed in the salary. The deductions will be allowed in the calendar year in which the payments were paid.
• State government tax: Local governments and state governments have the authority to collect all professional taxes, including those based on employment, professional trades, and other factors. The amount of professional tax collected each year should not exceed $2500.

Documents Required

• PAN card of the firm/LLP attested by the company director • Proof of office location with NOC from the property owner • Proof of corporate bank account with the bank statement and a canceled cheque
• Board resolution/statement of consent by the partners • Shop and establishment certificate • Salary register and attendance register from all directors • Passport size photograph, address, and identity evidence from all directors • Board resolution/statement of consent by the partners

Online Professional Tax Registration – Detailed Process

• Step 1: All directors/partners/proprietors of the company must present their PAN card, address, and identity verification.
• Step 2: All personnel information must be provided.
• Step 3: Employees must complete the professional tax application form.
• Step 4: It will be submitted to the appropriate authorities by our expertise.
• Step 5: We will send you a basic acknowledgment within 5 to 7 business days.
• Step 6: In all major cities, the registration hard copy will be issued within 10 days.
• Step 7: It could take up to 15 to 20 working days in other locations.

Understanding the Online Professional Tax Registration Applicability

Firms/Companies/LLPs

Firms, LLPs, corporations, societies, HUFs, associations, clubs, and companies are all considered taxable entities in the case of professional tax. Under professional taxation, all of the branches involved will be treated as independent people.

Individuals (Professionals)

Medical representatives such as dentists, medical consultants, and doctors, as well as management consultants, tax consultants, surveyors, company secretaries, chartered accountants, insurance agents, engineers, architects, and contractors, are all considered professional individuals who must pay professional tax.

Partners and Directors

Professional tax should be paid by company directors, firm partners, LLP partners, and designated partners. Within 30 days of being assigned to these positions, they should register under the professional tax legislation.

Employers

The company/firm must obtain a professional tax enrollment certificate (PTEC) within 30 days of incorporation by registering on the government portal.

Within 30 days of hiring a staff member, the company/firm must have a professional tax registration certificate (PTRC).

Employers are required to deduct professional tax from the salaries of those under their supervision and submit it to the professional tax department when filing returns.

• Employers are required to deduct professional tax from the salaries of those under their employ and submit it to the professional tax department when filing returns. The employer must register with the professional tax department within 30 days of the law’s implementation.

What are the Consequences of Professional Tax Violation?

Though the exact penal interest or penalty varies depending on each state’s legislation board, all states will be penalized if they do not register once the professional tax legislation takes effect. Additionally, penalties will be assessed if payments are not made on time or if the return is not filed by the deadline.

Why Vakilsearch

Vakilsearch is here to help you whenever you need it. Here are some of the ways we may assist you with professional tax registration online:

Preparing the application

Preparing the application might be a difficult effort because the phrases and regulations are often difficult to comprehend. Our skilled tax specialists do a thorough analysis of the firm and develop a document for filing a tax application with the appropriate state government.

Filling out the application form

Our experts will then complete and send the legally signed form to the appropriate city or town agency.

Registration process

The application will next be thoroughly examined by the relevant state government (s). Your professional tax registration is complete once it is determined to be correct.

Professional Tax Registration Glossary

PT

Professional Tax

PTEC

Professional Tax Enrollment Certificate

PTRC

Professional Tax Registration Certificate

Direct Tax

Income, capital gains, and net worth are all subject to direct taxes. Direct taxes include gift taxes, death duties, and property taxes.

Double Taxation

When the same person gets taxed twice on the same income by more than one state, this is known as double taxation. If more than one person gets taxed on the same thing, double taxation is cost-effective.

Also, read: OLTAS: Online Tax Accounting System in India
Professional Tax for different states

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Indian Income Tax Rebate Under Section 87A is one of the Indian income tax provisions that help Indian taxpayers reduce their Indian income tax liability. Indian citizens can claim an Indian Income Tax Rebate under section 87A if their total Indian income does not exceed Rs 5 lakh in a financial year. The Indian Income Tax Rebate under section 87A will make the Indian taxpayer’s India-based India Income Tax Liability become nil.

The key to claiming this rebate is ensuring that your total net taxable income, which includes all incomes from any source, does not exceed Rs 5 lakh in a financial year. Furthermore, you must have been resident in India for at least 182 days during the said financial year and have been outside India for no more than 60 days during the previous Indian financial year. Indian citizens who are Indian residents and not Indian citizens or Indian tax-resident but non-Indian citizens or Indian non-tax-resident do not qualify for Indian Income Tax Rebate under section 87A.

The person can claim an Indian Income Tax Rebate under section 87A only if he/she files an Indian Income Tax Return. If the Indian citizen does not file an Indian Income Tax Return, the Indian Revenue Department will treat him/her as an Indian non-tax-resident even if he/she is an Indian resident, and no Indian Income Tax Rebate under section 87A can be claimed.

Latest Update:

On 9th September 2021, the CBDT announced a new timeline for certain direct tax obligations for AY 2021-22.

• ITR Filing due to date extension:

1. ITR filings by taxpayers who are not under audit will be delayed from September 30, 2021, to December 31, 2021 –
2.  The filing date for IRS tax audit investigations is extended to February 15, 2022.
3. Pricing was extended to February 22 in the case of a transfer Tax reporting for transfers is now ended.
4.  The ITR filing for FY 20-21 is prolonged from December 31, 2021, to March 31, 2022, in order to allow delinquents more time to file their belated or revised returns.

• Furnishing Audit Report:

1. The deadline to submit the audit report has been extended to January 15, 2022.
2. The due date for furnishing the audit report in transfer pricing instances has been extended to January 31, 2022.

Steps to claim a tax rebate under section 87A

Prepare the following items to claim the tax rebate under section 87A.

• You have to file Income Tax Return Indian by Calculate your gross total income for the financial year
• You must not have an income that exceeds Rs 5 lakh in a financial year
• The maximum rebate under section 87A for the AY 2020-21 is Rs 12,500.
• You must have capital gains or losses to be able to claim the tax rebate under section 87A
• Provide details and documents of your income and any eligible deductions applicable
• Provide the number of allowances you claimed as well as their respective rates
• Provide details and documents of any expenditure you last incurred before filing your return
• You must have paid or are liable to pay any income tax on the taxable capital gains referred to in section 115AC

An example of the calculation of a rebate under section 87A in the case of an individual who is below 60 years old in AY 2020-21

You can get a section 80C tax deduction for tax-saving, a section 80D medical insurance deductible, and 80CCD contribution to NPS deductible, an 80G donation deductible, and other deductions to arrive at your total income.

By following the above-mentioned steps, you can claim a rebate under section 87A.

Things to remember to avail rebate under section 87A

• Section 87A is applicable to Indian citizens only.
• Your total income must not exceed Rs 5 lakh in a financial year.
• The rebate under section 87A reduces your income tax liability to nil.
• Rebate under section 87A is also provided for individuals who gain employment or start a business after April 1, 2016.
• Approved charities and trusts can use the rebate under section 87A to reduce their gross income tax liability.
• The discount may be taken from the entire tax before the 4% health and education cess is added.
• Individuals who live in the same home and pay taxes on their property are eligible for this section’s discount.
• Section 87A offers a discount of up to $25 for seniors over 60 years old and under 80 years old.
• Seniors over the age of 80 are not eligible to receive a rebate under Section 87A.
• The rebate will be reduced to the limit specified under section 87A, or the total income tax owing (before cess) before any expenses.
• The old and new tax systems both allow for the payment of a rebate under Section 87A.

Eligibility to claim rebate u/s 87A for FY 2020-21 and FY 2019-20

The following requirements must be met in order to qualify for the benefit of rebate under Section 87A for FY 2020-21 and FY 2019-20:

• You are a resident individual
• In an FY, your whole income after taking away the deductions allowed under Chapter VI-A (Section 80C, 80D, and so on) is less than Rs 5 lakh.

The tax refund is capped at Rs 12,500. This implies that if your total tax obligation is less than Rs 12,500, you will not have to pay any taxes.
Note that, before adding the health and education cesses of 4%, the rebate will be deducted from the total tax. Here are a few examples of resident individuals’ section 87A rebates, including senior citizens:

Eligibility to claim rebate u/s 87A for FY 2018-19 and FY 2017-18

If you’re looking to claim a tax rebate under section 87A for FY 2017-18 or FY 2018-19, the following are the requirements:

• You are a resident individual
• Your taxable income after deductions under Chapter VI-A, Part A (Sec. 80C, 80D, and so on) is less than Rs 3.5 lakh.

The amount of tax refund is restricted to Rs. 2,500. As a result, you will not have to pay any taxes if your tax bill does not exceed Rs. 2,500.

Do note that the tax rebate will be applied to the total tax before adding the health and education cess of 4% (FY 2018-19) or education cess of 3% (FY 2017-18).

Here are some examples of section 87A rebates for individual residents in FY 2017-18 and FY 2018-19:

** The tax payable for FY 2017-18 is Rs. 2500 plus three percent cess and the tax payable for FY 2018-19 is Rs. 2600, i.e., Rs. 2500 plus four percent cess

Rebate limit under section 87A for all the Financial years

Frequently Asked Questions

Can NRIs claim a rebate under section 87A?

This rebate is only available to resident individuals. As a result, non-residents are not eligible for a rebate under 87A.

Can this rebate be claimed by anyone?

Only individuals are eligible for this incentive. This financial benefit is only available to organizations, HUFs, or corporations.

How to claim rebate u/s 87A?

According to the Indian tax code, only natural individuals are eligible for a tax rebate under U/s 87A, which means HUFs and companies are not eligible. This refund may be claimed while filling an ITR return. For the 2019-20 financial year, if your self-assessment tax payment is less than Rs 5 lakh and you claim deductions.

How to calculate rebate u/s 87a?

If the individual’s total income is less than Rs 5 Lakhs after taking deductions, they are entitled to a tax rebate under Section 87A. As a result, taxable income after deductions must be verified to determine whether the rebate is applicable.

• Reduce your section 80C to 80U deductions and calculate your gross total income. If your earnings are less than Rs 5 lakh, you may be eligible for a tax rebate under section 87A, which equals 100% of the taxes paid up to Rs 12500.

• If taxable income is more than Rs 5 lakh, no relief can be obtained.

Read, also: Form 12B: A Complete Guide
TRAN 1 & TRAN 2 Format, Due Date

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India’s Income Tax Act is one of India’s most important laws. India has a complex tax system with multiple levels of taxation, and Section 119 empowers the CBDT to issue instructions to lower levels of authorities. In addition, Section 119(2)(b) empowers CBDT to direct tax authorities to permit any claim for exemption, deduction, refund, and other relief under the India tax Act even after the expiry of the deadline to form such claim. However, such claims will only be allowed by the income tax authority provided that making such a claim within the prescribed due date was genuinely out of the control of the taxpayer.

India has always been a country that has thrived on tax evasion and has never really paid taxes into the economy. India’s Section 119 is one of the most important laws that India can boast about because it empowers India’s Central Board of Taxes (CBDT) to issue instructions to lower levels of authority. It also empowers CBDT to direct income tax authorities to allow any claim for exemption, deduction, refund, and other relief under the tax Act even after the expiry of the time limit to make such a claim.

You should also read this: Section 269ST of Income Tax Act

WHO CAN ACCEPT AND REJECT SECTION 119 APPLICATIONS

Section 119 empowers the Central Board of Taxes (CBDT) to issue instructions to lower levels of authorities. In addition, section 119(2)(b) empowers CBDT to direct income tax authorities to allow any claim for exemption, deduction, refund, and other relief under the tax Act even after the expiry of the deadline to form such claim. However, such claims will only be allowed by the income tax authority provided that:

Making such a claim within the prescribed maturity was genuinely out of the control of the taxpayer.

The CBDT has issued circular no. 5, dated 2 January 2013, applicable to all claims for refund/deductions under the Income Tax Act. Section 119 of the Income-Tax Act is reproduced below:

The DIRECTOR GENERAL OF INCOME TAX (DGIT) India has not yet issued any circular regarding section 119 on the due date. However, India was asked by India’s mission in WCO during India’s initiative on a project named RATE (risk analysis and targeted examination) that whether India would allow taxpayers to seek tax refunds even after the statutory time limits set out in India’s tax laws and India replied that India “would allow such claims even after the time limits provided it was genuinely out of the control of taxpayers”. India has not yet issued any directive regarding section 119 to its lower authorities so far.

Section 119 empowers CBDT to direct tax authorities to permit any claim for exemption, deduction, refund, and other relief under the tax Act even after the expiry of the deadline to form such a claim.

As per India’s Income Tax Act: Section 119 – Procedure if no specific direction from DGIT India’s India income tax law doesn’t have a specific provision that allows India income-tax authority to allow refund claims after the statuary year time limit. India replied that India “would allow such claims even after the time limits provided it was genuinely out of control of taxpayers”. Section 119 empowers CBDT to direct tax authorities to permit any claim for exemption, deduction, refund, and the other relief under the tax Act even after the expiry of the time to make such claim India did not issue a specific circular on this matter but said India would allow such claims even after the time limits provided it was genuinely out India’s control of taxpayers.

WHAT IS THE TIME LIMIT FOR ACCEPTING CLAIMS IN SECTION 119 

In India, section 119 (2)(b) of the Income Tax Act empowers the CBDT and income tax authorities to extend the time limit for claiming exemption, deductions, and refund even after expiry. However, this is subject to the condition that such a claim should be made within due date would be genuine and beyond the control of the taxpayer.

The CBDT has issued instructions to lower-level authorities as per section 119(2)(b) of the Income Tax Act. In addition, any authority under India can give exemption, deduction, and refund to taxpayers even after the expiry of a time limit. This is subject to the condition that such exemptions should not have been claimed before and without any fraud or negligence on part of the taxpayer and they should have been made within the due date.

To avail of this provision, the following points should be taken into consideration:

Any claims for exemption, deduction, or refund can be made after the expiry of the time limit up to one year from the end of the relevant assessment year. The taxpayer will need to put forward their genuine reasons for not availing exemptions earlier to the officer assessing the return under the India income tax act.

Section 119 (2)(b) can be used by a central board of taxation, Indian authorities, and Indian taxpayers in general. This section cannot be used by partnership firms, foreign companies, and companies other than India incorporated firms as per India Company Act 2013, India income tax act 1961, and amendments made in India income tax act 2015. These rules are also not applicable to charitable trusts, political party and assessees in India or outside India under the India income tax act.

Income tax officers will have the discretion to allow the claims only if they feel that there was a genuine reason for not availing exemptions earlier. This waiver from the time limit can be allowed from the assessment year 2015-2016 onwards provided it is claimed before the end of the relevant assessment year.

This section cannot be used to claim refunds that are pending scrutiny/objection, pertaining to previous years’ returns or outstanding demand notices. In addition, taxpayers must put forward their cases within the due date specified by the officer assessing charges or return. Any deviation from given due dates may lead to the rejection of claims made under this provision without assigning any reasons for doing so.

The administration can also reject such claims without assigning any reasons in SECTION 119

The following kinds of cases cannot be filed under section 119 (2)(b) India income tax act:

• Claims already made in return and not allowed to assess by India authority or tribunal, etc.
• Claims which are pending scrutiny/objection or penalty proceedings, etc.
• Refunds that are outstanding from previous assessment years or other refund claims, other than those that have been passed by the officer assessing proceedings for the relevant assessment year. [To clarify this point further, these types of refunds would include even those proceeds whose due dates have passed.] These should instead be claimed under section 195 India income tax act. The time limit for availing this benefit is within one year after the end of the relevant assessment year.
• Claims which are already taken into account while processing other claims like Indexation benefit, carry forward losses etc.

Claims can be made either by filing an India income tax return or by filing a separate application to the officer assessing proceedings for the same before the due date. If a claim is filed beyond the due date then it should clearly mention that fact in their claim letter and also state reasons for making such a late claim.

FICA (Foreign institutional investors) registered with the Indian stock exchange does not require to file India income tax returns or applications under this provision if they want exemptions available at a higher level i.e., Central board of taxes India. However, they must comply with provisions applicable at lower levels i.e., Indian income tax officers India.

Any deviations from the provisions of the India income tax act or India income tax rules must be specifically mentioned.

No claims can be made under this provision on a retrospective basis (looking into the past). If the due date has passed, the claim should not be considered for exemption, deduction, and refund.

Claims must also mention the reasons which led to such late claims and it is required that they satisfy the assessing officer about their genuineness before processing such claims. Officers may allow such cases only if the taxpayer proves there was a genuine reason for not availing exemptions earlier. No single ground will be treated as enough reason for allowing such cases to avail all benefits available in India income tax law at one go i.e., refunds, exemptions, deductions, carry forward losses, etc.

Claims made under section 119 India income tax act are subject to taxation. However, assesses can claim the benefit of indexation or carry forward loss if India authority requests for producing supporting documents i.e., India

India, India audit report India and certificate from chartered accountant India.

If the assessing officer has granted relief in terms of The Income Tax Act exemptions, then he will grant relief under Section 119 (2) (b) also. As per which the Assessing Officer is obliged to allow that relief under Section 119 (2) (b).

OTHER IMPORTANT POINTS UNDER SECTION 119 (2)(b)

An important point to note under 119 is that interim relief may be granted, the India Central Board of Direct Taxes (CBDT) will have the authority to issue instructions or guidelines with respect to this interim relief. Such interim relief may be granted by the income tax authorities provided, making such a claim within the prescribed due date was genuinely out of the control of the taxpayer.

Where any instruction is issued by CBDT with respect to interim relief, CBDT shall publish such instruction in India Gazette.

In a recent case before the India Taxation Laws Services (ITLS). The ITLS decided to consider a claim for exemption under section 119 of the Income-tax Act, 1961 even after the expiry of the time limit as it was done within the prescribed due date.

The taxpayer had applied for an advance ruling on excise duty and service tax with respect to its product X. While considering such request, the Commissioner of Central Excise and Service Tax imposed a heavy penalty on the taxpayer for non-furnishing information within the prescribed time limits. This penalty was challenged by the taxpayer before the appellate authority and later before the tribunal again. During this period, section 119 came into force and several applications were made by taxpayers for relaxation in furnishing additional information and concession under

CONCLUSION

Section 119 of India’s Income Tax Act allows the country’s Central Board of Taxes (CBDT) to issue instructions to lower-level authorities, so they may allow any claim for exemption, deduction, refund or other relief under India’s income tax act even after the prescribed due date. However, such claims will only be allowed by India’s income tax authority provided that making such a claim within the time limit was genuinely out of control for this taxpayer. For help with your Indian taxes and save money on international accounting services in India contact us today!

Related Blogs:

Tax avoidance is lawful; Tax avoidance is criminal
Consequences of Failing to File an Income Tax Return

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 Introduction: ITR Slab 2020-2021

The Finance Minister stated that the Union Government has created original financial measures to assure that India’s economy continues to step the track of tremendous growth. To make India stay competitive in all over the world and a valued stop for investment, a strong decision has been taken. That is to reduce the corporate tax rate for new companies in the manufacturing sector to an unparalleled level of 15%. For existing companies, the rate is taken down to 22%. As an outcome, our corporate tax rates are now amongst the lowest in the world reason removal of DDT Tax.

 As per the announcement of the Finance minister, besides of the reform steps already taken so far, the tax plans in this budget include further changes to stimulate growth, simplify the tax structure, bring peace of compliance, and decrease litigations.

Details of Latest ITR Slab 2020-2021

It is highly foreseen that the Income Tax Budget 2020 will offer some key developments and reforms in the Indian Taxation System to drive investments and extension. These measures can be reduced personal income taxes, an increase in primary exemption limit, a restructured tax rate structure among others. Have a look at the details of ITR slab 2020-2021 below:

• Personal Income Tax and Simplification of Taxation

To give significant relief to the individual taxpayers and to simplify the Income-Tax law, the Finance Minister has offered to bring a new and reduced personal income tax regime, wherein income tax rates will be significantly decreased for the individual taxpayers who forego some deductions and exemptions.

New Tax Regime announced:

*Surcharge and cess will be maintained to be imposed at the existing rates.

In the new tax regime, the substantial tax advantage will rise to a taxpayer depending upon exemptions and deductions claimed.

ITR Slab 2020-2021

The new tax regime must be optional for taxpayers. A person who is currently availing more deductions and exemption under the Income Tax Act may choose to avail them and proceed to pay tax in the old regime.

The new personal income tax rates will require estimated revenue foregone of Rs. 40,000 crore per year. Steps is created to pre-fill the income tax return so that a person who picks for the new regime will need no assistance from a specialist to file his return and pay income tax.

• DDT ( Dividend Distribution Tax)

In the present situation, companies ask to pay DDT tax on the dividend paid to its shareholders at the rate of 15% plus applicable surcharge and cess, in addition to the tax payable by the company on its earnings. In order to increase the attention of the Indian Equity Market and to give support to a large class of investors, the Finance Minister has “offered to remove DDT tax”. And select the classical system of dividend taxation, under which the companies will not ask to pay DDT. The dividend is tax only in the hands of the beneficiaries at their applicable rate.

In order to eliminate the cascading effect, the Finance Minister has offered to provide a deduction for the dividend received by holding company from its subsidiary. The removal of DDT will begin to predicted annual revenue certain of Rs. 25,000 crore. This will further make India an engaging stop for investment.

• Concessional Tax Rate for Electricity Generation Companies

New plans were introduced in September 2019, offering a concessional corporate tax rate of 15% to the recently incorporated domestic companies in the manufacturing sector that start manufacturing by 31st March 2023.
In order to bring investment in the power sector, it has been proposed to increase the concessional corporate tax rate of 15% to new domestic companies involved in the generation of electricity.

• Tax Concession for Foreign Investments

To boost investment by the Sovereign Wealth Fund of foreign governments-the Finance Minister has offered to give 100% tax exemption to their interest, dividend and capital gains income in regard to the investment done in infrastructure. And other notified sectors before 31st March 2024 and with the least lock-in period of 3 years.

• Start-ups

Startups usually use Employee Stock Option, it was taxable to simplify taxation for employees this the Finance minister has proposed deferring the tax payment for 5 years or till they leave the company even seeling their shares whichever is earliest. The limit of Rs.25 crore for startups turnover increases to Rs.100 crore allows a deduction of 100%. Also, intended to increase the period of eligibility for a claim of deduction from the existing 7 years to 10 years.

• Concessional Tax rate for cooperatives

Cooperative societies are currently charged at a rate of 30% with surcharge & cess. The Finance Minister has said to give a choice to cooperatives sorties to be taxed at 22%, surcharge 10% & 4% cess with no deduction or exceptions. They are also, offer to exempt these societies from Alternative Minimum Tax (AMT).

• MSME Enterprises

To decrease the compliance burden on small retailers, traders, shopkeepers who hold the MSME sector, the Finance Minister has offered to raise by 5 times, the turnover starts for audit from the existing Rs. 1 crore-Rs. 5 crore. To advertise less-cash economy intended that the raised limit will apply only to those businesses which carry out less than 5% of their business transactions in cash.

Which one to use for the highest tax benefits?

 As per me, this new tax slab regime is the most complex tax slab rate in any government introduces. Now many people will be in difficulty of which one to use, the Extra one along with the existing headache for taxpayers of how to save more tax.

Note: – Along with the applicable taxes, you have to extra surcharges at below rates.

• Surcharge:
  1. 10% surcharge on income tax if the entire income surpasses Rs.50 Lakhs but below Rs.1 Crore.
  2. 15% surcharge on income tax if the entire income surpasses Rs.1 Crore
• Health and Education cess: There is 4% cess on income tax including surcharge. From Budget 2018, this Health and Education Cess replaced the earlier 2% Education Cess and 1% Secondary and Higher Education Cess.

How much will you save under the new Income Tax Regime 2020-21?

With the introduction of new regimes looks over the comparison of the old & new income tax calculated and understand the total savings.

Note: These rates are specially calculated to provide you information about the income tax calculation in 2020-21. 

Conclusion

The Finance Minister stated, evaluated all exemptions and deductions which got included in the income tax legislation over the preceding several decades. Currently, more than one hundred exemptions and deductions of various natures are given in the Income Tax Act.

An attempt is made to remove about 70 of them in the new clear regime. The remaining exemptions and deductions will also be examined and rationalized in the coming years, to moreover simplify the tax system & lower the tax rate.

LegalRaasta is an online portal for simplifying legal compliances for Individuals as well as businesses. We help provide the quickest and most efficient legal registration for businesses like GST consultation, Food License, as well as, Company Formation with Trademark Filing.  In addition to this, our services extend to efficient tax management such as GST returns, and Income Tax Returns ITR. Call +91-875-000-8585 with your requirements.

Frequently Asked question

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Let’s face the facts, The Government of India is no stranger to the problem of tax evasion, willful defaulters and black money hoarders. Few of these steps government has taken famously include Crackdown on Shell companies, Amendments to the Benami Properties Act i.e. RERA and demonetization. Seen individually these steps don’t seem to have accomplished a lot. However, seen as an overall change in policy along with the GST regime, these steps by the government have increased the tax base of the country significantly. A great indicator of the positive impact is that the number of income tax return filings in the year after demonetization stood at 10.1 million as compared to the average of past 6 years i.e. 6.2 million which is a significant rise of up to 1.5 times before the policy implementation.

Positive Signs for Income Tax return Filings

Say what you will about the inconvenience GST or demonetization caused at the time of implementation, there have been quite a few positive impacts of all these amendments and changes. One of the areas affected for the better is the Income Tax department. According to recent reports,  the tax collection has risen by a staggering 18% for the Fiscal Year 2017-18. The government reportedly set an ‘ambitious’ target of achieving Rs. 10 lakh Crore through collections in indirect taxes. Much to everyone’s surprise, the government achieved their targets and collected over Rs 10.03 lakh Crore in indirect taxes.

In the year of 2016-17, the number of taxpayers was recorded at  5.61 crores which rose to 6.92 crores in 2017-18  a brilliant rise of about 26%. The government basically received 1.06 Crore new income tax return filings in 2017-18 and have aimed at 1.25 Crore new filings for the current Fiscal year of 2018-19. ITR filing thus becomes a vital procedure since the government is actively working on its reforms. This is another step in the right direction for the policymakers to eradicate the issues of black money, money laundering as well as misuse of financial resources. It also helps account for defaulters in a more streamlined fashion.

The main reason for such huge strides the Income Tax Department is making is because of the change of structure and it’s reforms accredited to the ‘ inconvenient ‘ implementation of GST and demonetization. These amendments have helped to improve the tax base of the country.

The Road Ahead

Even though there have been significant improvements and effective measures have been taken to improve the taxation system in India. There is still a long way to go for the taxation system in India to eradicate the dealings of tax in bad faith. Reports also show that the tax collection in the country is highly undemocratic. The tax majorly comes from the biggest cosmopolitan cities in the country.

 The states of Maharashtra and Delhi put together contributed over 53% of total tax income generated. This served as a sign of worry for the government. In order to help facilitate income tax return filings, the government decided to deploy offices across the country. As a result, the revenue from remote areas of the country i.e. North-East rose by a whopping Rs 7,097 Crores.

A mere rise in tax revenue, however, is not as glorious as it sounds. Figures indicate that India is among one of the countries with a very low ‘Tax to GDP’ ratio. This indicates that the government is not able to provide basic amenities to its citizens including food, education or healthcare. A country-wide access to these amenities is pivotal for a developing economy of ours to become a developed nation. Below is an infographic outlining how much India is lacking behind in terms of tax to GDP ratio.

Tax to GDP ratios indicate a grim reality for India

India still has a long way to go to transform the economy into a developed economy. However, some positive steps give hope for a better future.

Still, haven’t filed your ITR? File your Income Tax Returns with the help of LegalRaasta for all things related to taxation such as GST registration. We also help with all things corporate like Company Registration as well as Trademark Registration. Call us with your requirements at +91-8750008585 or drop a mail at contact@legalraasta.com.

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The income tax department of the government of India keeps an eye on every taxpayer. The overall summary of incomes and the amount of tax paid by every citizen to the government of India is something like a report card of a student during a year for the parents. The form that a person fill for Income tax is called Income Tax Return. Although, the due dates for filing income tax return forms for the year 2017-2018 for certain people are now extended to 31 August with some changes in new forms. However, if you are still in a dilemma what form is to fill and what not? Then here is your reach ends. This article will let you know about the changes in ITR Forms this year.

There are certain forms that has released every year but which form is to be filled by a responsible taxpayer is a questionable thing. The various ITR Forms are ITR-1( Sahaj), ITR-2, ITR-3, ITR-4 and ITR-4S (sugam), ITR-5 and ITR-6. Previously, you were using offline excel/ Java utility services for filling the ITR form but no longer now because such Java/Excel file will no longer remain valid. With the effect of sec 234F, sec 234A etc now you have to download the new forms from the income tax E-filling website.

In case of online ITR-1 Form Sahaj, if you have saved the draft but didn’t file it before 31st July 2018, then such draft will no longer be available for you. You will have to fill a new form from the beginning. You can easily find the new pdf format ITR forms available in the website while the Excel utilities and Java utilities for 2017-2018 will be made available soon. The tax department declared that all the new forms will now be filed electronically. The CBDT said that individual taxpayers of 80 years or more can file at any time. Individual whose income doesn’t exceeds Rs. 5,00,000 and who has not claimed any refund can file ITR in the paper form, using the ITR-1 OR ITR-4. Here are the Changes in ITR Forms for you:

The Changes in ITR Forms are categorized as follows:

• SAHAJ (ITR1)

  The resident of India other than the ordinarily resident can fill this form having an income of up to Rs. 50 lakh and whose salary is out of income, one house property or other interest income.

The specific details about your salary are to be disclosed by new Sahaj form: From the specific fields, it seeks assessee’s salary details as well as the allowances that are not exempted, the value of perquisites, remuneration in lieu of salary and deductions claimed under section 16.

• FORM ITR2:

The ITR-2 now has been rationalized for the individuals and HUFs (Hindu Undivided Families) with the income under any head other than business or profession. The individuals who have profits and gains from any business are not entitled to fill this form, unlike the last financial year where details of partnership firm could be reported.

• FORM ITR3, FORM SUGAM- ITR4:

  Individuals or HUFs that come under the head of business or profession can file either ITR3 or ITR4 in presumptive income cases. Whereas, under ITR4, assessees who are receiving presumptive income under the head of business and profession will have to furnish their GST registration number and its turnover.

Businessman and professionals must have to written GST IN numbers in Form ITR4 claiming presumptive income with the gross receipts as per GST returns.

• Form ITR-5

• FORM ITR-6

• FORM ITR-7

• FORM ITR-V

Form 26 AS and Form 16 of Income Tax Returns need to be verified before filing.

For further more details regarding legal services, company registration, sole proprietorship registration you can go through our website: Legal Raasta

Give us a call on 8750008585 and send your query at Email: contact@legalraasta.gmail.com

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