Income Tax Return Filing 2020: Here are some important tips for you

Income Tax is the tax paid on income incurred by an individual. Every person who has any source of income in India is taxable under the Income Tax Act. Income tax return filing is the process where assessee has to pay his income tax by filing Income Tax Return to the Income Tax Department on or before due dates.

Department extends the due date sometimes, for instance, for the FY 2018-19 due date for individuals was extended for one month from 31^st July 2019 to 31^st August 2019. As per Income Tax Act, Income Tax Return filing is done in every year whether be it individual or business and income can be in any source such as salary, pension, investment income, any prize money earned in any game show, etc. This blog consists of tips for a better understanding of Income Tax Return filing.

Income Tax Slab for FY 2019-20

Following Income Tax Slab varies as per the status of taxpayers such as whether it is an individual or company, and it also depends upon the age of individual taxpayer:

       a)      For individual taxpayer of age less than 60 years:  

·  Income up to 2.5 Lakhs: NIL

·  Income exceeding 2.5 Lakhs up to 5 Lakhs: 5% of Income plus 4% Cess

·  Income exceeding 5 Lakhs up to 10 Lakhs: 20% of Income above 5 Lakhs + 4% Cess + INR 12500

·  Income exceeding 10 Lakhs: 30% of Income above 10 Lakhs + 4% Cess + INR 112500

b)      For individuals of age between 60 to 80 years:

·  Income up to 3 Lakhs: NIL

·  Income exceeding 3 Lakhs up to 5 Lakhs:     5% of Income plus 4% Cess

·  Income exceeding 5 Lakhs up to 10 Lakhs: 20% of Income above 5 Lakhs + 4% Cess + INR 10500

· Income exceeding 10 Lakhs: 30% of Income above 10 Lakhs + 4% Cess + INR 110000

c)      For individuals of an age exceeding 80 years:

·  Income up to 5 Lakhs: NIL

·  Income exceeding 5 Lakhs up to 10 Lakhs: 20% of Income above 5 Lakhs + 4% Cess

· Income exceeding 10 Lakhs: 30% of Income above 10 Lakhs + 4% Cess + INR 100000

d)     For Domestic Company, the tax rate  is based upon its turnover:

· Gross Turnover for the relevant financial year is up to INR 250 Crore: 25%

·  Gross Turnover for the relevant financial year exceeds INR 250 Crore: 30%

Addition key-points

Other than basic tax rates, addition cess and surcharges are also levied. Following are the details of cess and surcharge levied:

·  For corporate tax, cess is levied at 4%

· If the net income is INR 50 Lakhs to INR 1 Crore, surcharge at 10% rate is also levied along with 4% cess.

· If the Net Income exceeds INR 1 Crore, the surcharge is levied at 15%

· The surcharge is levied at the rate of 7% in case taxable income exceeds INR 1 Crore but doesn't exceed INR 10 Crore

·  If the taxable income exceeds INR 10 Crore, the surcharge is levied at the rate 12%

·  Budget for FY 2018-19 has amended the cess rate from 3% to 4%; however, with every budget; there are certain amendments for the relevant financial year under review.

ITR Forms

Following are the income tax return forms filed as per the applicability:

· ITR 1 or Sahaj: For a resident individual having Income up to INR 50 Lakhs from sources such as salary, pension, one house property, and other sources

·  ITR 2:  For resident individuals having income exceeding INR 50 Lakhs from the sources such as capital gains, more than 1 house property, and income by way of holding directorship in any company.

·  ITR 3: Income from business or profession.

·  ITR 4: For presumptive income exceeding INR 50 Lakhs

· ITR 5: This form applies to the income of firms, LLP, and association of persons.

Final Thought

Government from time to time introduced various amendments on interest rates, taxable income, income slab, etc. annually with financial budget announced at the start of the fiscal year. Thus to know about the recent amendments or notification on Income Tax Return or for assistance to get your return filed, contact our team of taxation experts. Corpbiz