July
– The ITR Month
June’20 is ending and we all
are entering in the month of July’20. July’20 is the month which gets heavy
rainfall in our country and scenic beauty of nature is adorable. But this is
not the only identity of the month of July, it is also identified as the month
of “ITR Filing”. Those assesses whose taxable income is more than basic exemption
limit but less than the threshold limit specified to get the accounts audited
are required to file the return on or before the due date of filing of income
tax return as specified by section 139(1) of the Income Tax Act.
Mainly, salaried employees are more concerned about their ITR filing. They
are more concerned about how much tax has been deducted (TDS) & what more
is to be paid as Self-Assessment Tax. They start to arrange their documents
related to investments which they have already incurred and now wants to claim
that amount as deductions under chapter VI- A of the Income Tax Act. It may be
under Section 80C (Payment of Insurance Policy Premium, Investment in ELIS, Contribution
in PPF, EPF etc), 80D (Payment for mediclaim policy), 80TTA (Deduction on
Interest Income earned on saving account of bank or co-operative society or
deposits made in Post Office), 80E (Interest repayment in respect of loan taken
for higher education), 80G (Donation to Trust or Charitable Institutions) etc.
Due date for filing of
Income Tax Return for persons other than liable to get their accounts audited is
31st July of the succeeding Financial Year of which Income is to be
taxed. But this year due to Covid-19, Income earned in the Previous Year
2019-20 & Taxable in the Assessment Year 2020-21 due date of filing of ITR
is extended to 30th November. As date is extended, people may get
more time to arrange their papers and get their ITR filed within the stipulated
time period.
There are some doubts
related to ITR due date, deductions eligibility, Old Tax structure or New Tax
Structure and many more. In the underlying points we are trying to resolve the
same-
Ø Due Date of Filing of ITR – 30th
November’2020 is the extended due date for filing of ITR of Assessment Year
2020-21 (Previous Year – 2019-20) for all persons.
Ø Investments
To Be Claimed As Deduction – Time limit for making investments that can
be claimed as deduction under Chapter-VI A – Part B of Income Tax Act, 1961 has
been extended to 31st July, 2020. Therefore eligible investments done
on or before 31st July, 2020 will be allowed as deduction for the
Assessment Year 2020-21.
Ø Deductions in respect of
Capital Gain - The date for making investment/
construction/ purchase for claiming roll over benefit/ deduction in respect of
capital gains under sections 54 to 54GB of the IT Act has also been further
extended to 30th September, 2020. Therefore, the investment/ construction/
purchase made up to 30th September, 2020 shall be eligible for claiming
deduction from capital gains.
Ø Interest under Section 234A
- The date for payment of self-assessment tax in the case
of a taxpayer whose self-assessment tax liability is up to
Ø Donations Given under
Covid-19 – If donations have been given to the trusts
or charitable institutions having 80G registration, donor can claim the
deduction under section 80G of the Income Tax Act, 1961.
Ø Basic Exemption Limit – Basic
Exemption Limit, i.e., the amount which is not taxable for Individuals is ₹ 2,50,000
(other than Senior Citizen). There has be no increase in this limit. Tax Slab
will be applicable as per the age of the Individual.
Tax Slab for Individual (other than senior
citizen) :
Taxable Income (₹)
|
Rate of Tax
|
Up
To 2,50,000
|
Nil
|
2,50,001
– 5,00,000
|
5%
|
5,00,001
– 10,00,000
|
20%
|
10,00,001
& Above
|
30%
|
(Health & Education Cess @ 4% is
additional)
Ø Tax Rebate Under Section 87A – A
resident Individual having taxable Income Up to 5,00,000
(≤ 5,00,000) will be eligible for tax rebate
amounting to 12,500. Therefore if taxable income is not more than 5,00,000 whole
income will be exempted from tax but if taxable income is more than 5,00,000,
tax will be levied as per slab rate.
Example -
1) Taxable Income - ₹ 4,90,000
Particulars
|
Amount
(₹)
|
Taxable Income
|
4,90,000
|
Tax on Taxable Income
|
12,000
|
Rebate Under Section 87A
|
12,000
|
Tax Payable
|
Nil
|
2) Taxable Income – 5,00,000
Particulars
|
Amount
(₹)
|
Taxable Income
|
5,00,000
|
Tax on Taxable Income
|
12,500
|
Rebate Under Section 87A
|
12,500
|
Tax Payable
|
Nil
|
3) Taxable Income – 5,20,000
Particulars
|
Amount
(₹)
|
Taxable Income
|
5,20,000
|
Tax on Taxable Income
|
16,500
|
Rebate Under Section 87A
|
Nil
|
Tax Payable
|
16,500
|
Ø Cost Inflation Index – Cost Inflation Index for AY 2020-21 is 289.
Ø Deductions From Gross Salary – Every salaried
employee can avail the benefit of these two deductions provided all conditions
are fulfilled-
i)
Standard
deduction for salaried employee is raised from ₹ 40,000 to ₹ 50,000. (Section 17(ii)). This is a blanket deduction.
ii)
Professional
Tax if deducted by employer can be claimed by assessee as deduction, Max amount
being ₹
2,500. (Section 16(iii))
Ø New Tax Regime v/s Old Tax Regime – Assessee will be allowed to select existing tax regime or
new tax regime to pay tax. But this will be applicable from Financial Year
2020-21 (AY 2021-22), i.e., on income earned during the FY 2020-21 this option
will be available. This is not applicable for income earned during the FY
2019-20 (AY 2020-21).
🖆
Sanidhya Pastore
Tax Consultant
9993941806 / Sanidhyapastore@gmail.com
Note:
This
article is just for informative purpose. All due care is taken while drafting
this, if any error occurs, please correct the same.🖆🙂
