E-FILING AND RETURNS

MODULE 1

1. BRIEF THE DIFFERENT TYPES OF ITR FORMS

Income Tax Return (ITR) is a form used to tell the government:

1. How much money you earned in a year.

2. How much tax you already paid.
3. If you should pay more tax or get a refund.
4. It shows your income, deductions, exemptions, and taxes for a financial year.

Types of Income Tax Returns

ITR-1 (Sahaj)

For simple cases like salaried people:

1. For Indian residents (not for NRIs or big businessmen).

2. Total income should be up to ₹50 lakh.
3. Income includes salary, one house property, interest, and little farming income (up to
₹5,000).
4. Very easy and basic form.

ITR-2

For people with slightly more complex income:

1. For Individuals and Hindu Undivided Families (HUFs).

2. No income from business or profession.
3. Income can include salary, multiple house properties, capital gains, etc.
4. Suitable if you earn from investments, shares, or foreign income.

ITR-3

For people doing business or profession:

 1. For Individuals and HUFs earning from business or profession.
2. Income from business, freelancing, consultancy, or services.
3. Also includes salary, house property, or capital gains income (if any).
4. A detailed form because it covers many types of earnings.

ITR-4 (Sugam)

For small business owners and professionals:

1. For Individuals, HUFs, and Firms (except LLPs) living in India.

2. Total income should be up to ₹50 lakh.
3. Business or profession income calculated simply under sections 44AD, 44ADA, or
44AE.
4. Very simple and easy to fill (called 'Sugam' meaning 'easy').

ITR-5

For bigger groups and partnerships:

1. For firms, LLPs, Association of Persons (AOP), Body of Individuals (BOI), etc.
2. Not for individuals, HUFs, companies, or trusts.
3. Used by business partnerships and associations.
4. Needs a bit more detail compared to ITR-1 to 4.

ITR-6

For companies:

1. For companies that do not claim exemption under Section 11 (charitable/religious

organizations).
2. All regular companies use this to file their taxes.
3. Income includes business profits, investments, etc.
4. Needs audited financial statements to fill this form.
2. STATE THE DIFFERENT TYPES OF FORMS FOR FILING TDS RETURNS

Form 24Q

Used for tax deducted from salaries:

1. Filed by employers who deduct TDS from employee salaries.

2. Submitted every quarter (April-June, July-September, etc.).
3. Contains details like employee’s salary, deductions, and PAN.
4. Helps the government know how much tax was deducted from salaries.

Form 26Q

Used for tax deducted from non-salary payments:

1. Filed for payments like interest, contractor payments, professional fees, etc.
2. Covers all TDS deductions except salaries.
3. Submitted every quarter by the person or company making the payment.
4. Needed when you deduct TDS from suppliers, professionals, etc.

Form 27Q

Used for payments to non-residents or foreign companies:

1. Filed when you make payments like interest, dividend, or any other sum to a non-
resident.
2. Meant for foreigners or foreign companies receiving payments from India.
3. TDS is deducted before making such payments.
4. It’s filed every quarter to show these deductions.

Form 26QB

Used for TDS on property purchase:

1. Filed when you buy immovable property (like a house, land, building).
2. Buyer must deduct TDS from the seller’s payment if property value is more than ₹50
lakh.
3. It’s a one-time form, not quarterly.
4. Combines TDS payment and reporting together (called challan-cum-statement).
Form 26QC

Used for TDS on rent payments:

1. Filed when you are paying rent above ₹50,000 per month.
2. Tenant must deduct TDS from the rent paid to the landlord.
3. It is also a one-time form (per financial year or contract).
4. Combines TDS payment and reporting, like 26QB.

Form 27EQ

Used for tax collected at source (TCS):

1. Filed by sellers who collect tax from buyers at the time of sale (TCS).
2. Covers goods like liquor, scrap, minerals, etc., where TCS is applicable.
3. Submitted every quarter.
4. Shows the government how much TCS was collected from customers.

3. BRIEF THE KEY FEATURES AND USAGE OF PAN CARD (12 mark)

What is PAN?

1. PAN is a unique 10-character alphanumeric code given by the Income Tax

Department.
2. It acts like a special ID number for your financial activities.
3. PAN links all your tax-related transactions like payments, refunds, TDS, etc.
4. It helps track all your financial dealings and stops tax cheating.

Key Features and Uses of PAN Card

1. Identification

1. PAN is used as a main identity proof for individuals, firms, and companies.
2. It is valid all over India.
3. Useful for government records and verification purposes.
4. Needed for KYC (Know Your Customer) in banks and other places.

2. Tax Purposes
 1. PAN is essential for filing income tax returns.
2. It tracks your tax payments and refunds.
3. Helps ensure people are paying correct taxes.
4. Links your income with your taxes clearly.

3. Financial Transactions

1. PAN is needed to open bank accounts.

2. Required for large cash deposits, investments, buying property, etc.
3. Helps government monitor big financial deals.
4. Without PAN, you cannot do major financial activities.

4. Business Transactions

1. Businesses need PAN for registration and getting licenses.

2. Required for invoicing and filing GST returns.
3. Important for opening a current account for business.
4. Needed while doing deals with other companies.

5. Preventing Tax Evasion

1. PAN connects all transactions to one ID, making it easier to catch fraud.
2. Helps government find those hiding income.
3. Increases transparency in financial activities.
4. Supports a wider tax base, meaning more people pay taxes honestly.

6. Format of PAN

1. PAN has 10 characters (Example: ABZPK1234C).

2. First 5 are letters, next 4 are numbers, and last is a letter.
3. Each character has a meaning (like name type, series number).
4. It is printed on the PAN card along with your photo and signature

7. Application Process

1. You can apply for PAN online or offline.

2. Online application through Income Tax website or service providers.
3. Fill form, submit documents, and pay fees.
4. PAN card is sent to your address after approval.

8. Validity
 1. PAN never expires, it's a lifetime card.
2. No need to renew it every few years.
3. If your name or address changes, you must update PAN.
4. Updated PAN card will have new details, but same PAN number.

5. BRIEF THE DIFFERENT HEADS OF INCOME UNDER INCOME TAX ACT

1. Income from Salary

1. Salary means income received from an employer for services you perform.
2. Includes basic salary, bonus, allowances, and perquisites (like free house, car).
3. Even pension after retirement is considered under salary income.
4. Some parts like HRA (House Rent Allowance) can get tax exemptions.

2. Income from House Property

1. If you own a house or building and earn rental income, it comes under this head.
2. Even if the property is not rented, a notional rent may be considered for taxation (with
some exceptions).
3. You get deductions like 30% standard deduction and interest on housing loan.
4. Only buildings and land attached to it are covered (open plots are not).

3. Profits and Gains from Business or Profession

1. If you earn money by doing business or practicing a profession (like doctor, lawyer), it
is taxed here.
2. Income includes profits from trading, manufacturing, freelancing, consulting, etc.
3. Expenses related to business (rent, salaries, materials) are allowed to be deducted.
4. Losses can sometimes be carried forward and adjusted against future profits.

4. Capital Gains

1. Income earned from selling a capital asset (like land, building, shares) is called capital
gains.
2. Gains are classified as Short Term or Long Term based on how long the asset was held.
3. Special tax rates apply for short-term and long-term gains.
 4. You can save tax by reinvesting gains in certain assets (like buying another house).

5. Income from Other Sources

1. Any income that doesn't fit in other heads comes here.

2. Includes interest income, lottery winnings, dividends, gifts (over ₹50,000), etc.
3. Certain expenses like collection charges on interest can be deducted.
4. Some incomes like lottery winnings are taxed at a flat higher rate.

5. DETERMINE THE AGRICULTURAL AND NON-AGRICULTURAL INCOME

Agricultural Income
Income is called agricultural when these 4 conditions are met:

1. Land must be in India — The farming must happen inside India.

2. Land must be used for agriculture — Crops must be grown, not used for any other
purpose.

3. The person must have an interest in the land — Owner or tenant who actually benefits
from farming.

4. Income must come directly from agriculture — Growing, processing (basic processing
only), or selling crops.

👉 Examples:

 Rent received from farming land.

 Selling crops like wheat, rice, sugarcane grown on your land.

 Income from a farmhouse used for agriculture.

Non-Agricultural Income
Income is non-agricultural when it does not involve actual farming or agriculture directly:

1. Market income — Renting land for shops/markets, not farming.

2. Mining or stone quarry income — Extracting minerals from land.

3. Income from fisheries, dairy, poultry — Not considered farming of crops.

 4. Dividend from agricultural company — If you get shares dividend, it’s not agricultural
income.

👉 Examples:

 Income from renting land to run a warehouse.

 Money earned from selling milk, eggs (even if farm is on agricultural land).

Quick Tip to Remember

✅ If it comes directly from growing and selling crops, it's Agricultural Income (no tax).
✅ If it's from other activities (like business, mining, renting), it's Non-Agricultural Income
(taxable).

5. MENTION FEW ADMISSIBLE AND INADMISSIBLE EXPENSES

 Admissible Expenses
1. Rent, taxes, repairs and insurance of buildings u/s 30
2. Repairs and insurance of machinery u/s 31
3. Depreciation u/s 32
4. Expenditure on scientific research
5. Deduction for expenditure on specified business
6. Payment to association or institutions
7. Expenditure on agricultural extension project
8. Deduction in respect of skill development project
9. Amortization of certain preliminary expenses
10. Other deductions like
 Insurance premium
 Premium on life of cattle
 Premium on health
 Bonus or commission
 Interest on borrowed capital
 Discount on zero coupon bond

 Inadmissible Expenses

1. Personal expense like marriage expense, drawing, premium on life and medical insurance, proprietor
salary, rent paid for own building, saving made in NSC, PF, etc. household expenses like electricity,
telephone uses for residence.
2. Any payment made in excess of 10,000 either in cash or bearer cheque, the entire amount is
inadmissible.

3. Income tax, Wealth Tax or Advance Income Tax paid.

4. Interest on loan, taken for personal purpose.

5. Provision for bad debts, doubtful debts, reserve for future losses.

6. Bonus and commissionpaidtoemployeesnotalloweditispaidaftertheduedateoffilingthereturns,(incase

ofindividual31stJuly2021).

7. Sales tax, Customs Duty, Excises Duty, if it is not paid before the due date of filing the returns.

8. Any losses related to Capital in nature like loss on sale of assets.

9. Donation and Charities.

10. Personal gifts and presents.

6. DESCRIBE FORM 26Q IN DETAIL.

Form 26Q is a quarterly statement used by deductors to report tax deducted at source (TDS) for
payments other than salaries. This form is crucial for entities that make payments like interest,
dividends, commission, etc., to individuals or companies. Here's a breakdown:

1. Purpose of Form 26Q

 It is used to report TDS deductions on payments made other than salary for a quarter.
 The form ensures that the tax deducted at source is properly reported to the Income Tax
Department.

2. Payments Covered under Form 26Q

 It covers payments made under various sections of the Income Tax Act, such as:
o Interest on securities (Section 193)
o Dividends (Section 194)
o Interest other than on securities (Section 194A)
o Winnings from lotteries (Section 194B)
o Contractor payments (Section 194C)
o Insurance commission (Section 194D)
o Payments related to property (Section 194LA, 194IA)
o And several others, including payments for professional services and interest.
3. Details to be Provided

 Challan Details: Information about the tax payment challan, which includes the amount
of tax paid.
 Deductor and Deductee Information: The name, address, and PAN details of both the
person deducting the tax (deductor) and the person receiving the payment (deductee).
 Reason for Non-deduction or Lower Deduction: If the deductor has not deducted the
tax or deducted it at a lower rate, they must provide a valid reason in the form.

4. Section-wise Details

 Form 26Q covers a wide range of sections under the Income Tax Act, detailing the nature
of payments and the corresponding TDS rates. Some of the sections include:
o Section 194C: Payments to contractors and subcontractors.
o Section 194J: Fees for professional or technical services.
o Section 194N: TDS on cash withdrawals above ₹1 crore.

5. Quarterly Submission

 This form is submitted quarterly, meaning the deductor has to file it four times a year.
 It must be submitted by the due date for each quarter to avoid penalties.

6. Importance of Form 26Q

 It helps the Income Tax Department track TDS deductions and ensure that taxes are
being deducted and deposited properly.
 The form provides a transparency mechanism for both the deductor and deductee to
reconcile the tax paid and received, and it also helps in avoiding tax evasion.

12 AND 9 MARKS

1. EXPLAIN THE INSTRUCTIONS FOR FILING ITR FORM

1. Download the Form:

o Go to the official Income Tax Department website and download the latest
version of ITR Form 1.
2. Personal Information:
o Fill in your personal details such as:
 Name, PAN (Permanent Account Number), Aadhaar number, and contact
details.
  Select the assessment year for which you are filing the return (the year you
are filing taxes for).
3. Income Details:
o Report your income under the relevant sections:
 Salary income: Include details of your salary, allowances, and any
deductions.
 House property: If you have income from property, provide the details of
the property and income earned.
 Other sources: Any other income like interest, dividends, etc.
4. Deductions and Exemptions:
o Deductions: Mention the deductions you are eligible for, such as under sections
80C, 80D, etc.
o Exemptions: Include any exemptions like HRA (House Rent Allowance) or LTA
(Leave Travel Allowance), if applicable.
5. Tax Computation:
o Calculate your total income and the tax payable based on the tax slabs for that
year.
o Mention any advance tax or self-assessment tax you have already paid.
6. Verification:
o Verify that all the details you have filled are correct.
o Sign and date the form to complete the verification process.
7. Filing Options:
o Depending on the rules in your country, you can file your return online or offline.
Follow the appropriate procedure for submission.
8. Supporting Documents:
o Attach necessary documents like:
 Form 16 (for salaried individuals), proof of investments, and any other
documents as required.
9. E-filing Acknowledgment:
o If you are filing online, make sure to save a copy of the e-filing acknowledgment
for your reference.
10. Deadline:

 Ensure that you file your ITR before the due date to avoid any penalties.

2. EXPLAIN THE INSTRUCTIONS FOR FILING ITR FORM 2

1. Download the Form:

o Visit the official Income Tax Department website and download the latest
version of ITR Form 2.
2. Personal Information:
o Fill in your personal details:
  Name, PAN (Permanent Account Number), Aadhaar number, and
contact details.
o Select the assessment year (the year you are filing taxes for).
3. Income Details:
o Report your income under the appropriate heads:
 Salary income: Include details of salary, allowances, and deductions.
 House property: Provide details if you have income from house property.
 Capital gains: Include any income from the sale of capital assets.
 Business or profession: If you have income from business or profession,
provide those details.
 Other sources: Any additional income, such as interest or dividends.
4. Deductions and Exemptions:
o Mention any deductions you're eligible for under sections like 80C, 80D, etc.
o Declare any exemptions like HRA (House Rent Allowance), LTA (Leave Travel
Allowance), if applicable.
5. Schedule OS:
o If you have income from other sources, fill out Schedule OS with the required
details.
6. Schedule BP:
o If you have business or profession income, provide the necessary details in
Schedule BP.
7. Tax Computation:
o Calculate your total income and tax payable based on the applicable tax slabs for
the assessment year.
o Mention any advance tax or self-assessment tax already paid, if applicable.
8. Verification:
o Verify all the details you have entered in the form.
o Sign and date the form to complete the verification process.
9. Filing Options:
o Depending on the regulations in your country, you may choose to file the return
online or offline. Follow the procedure provided for submission.
10. Supporting Documents:
o Attach necessary documents such as:
 Form 16 (for salaried individuals), proof of investments, and any other
required documents.
11. E-filing Acknowledgment:
o If you are filing online, make sure to keep a copy of the e-filing
acknowledgment for your records.
12. Deadline:
o Ensure that you file your ITR before the due date to avoid penalties for late
filing.

3. EXPLAIN THE INSTRUCTIONS FOR FILING ITR FORM 3

1. Download the Form:
o Visit the official Income Tax Department website and download the latest
version of ITR Form 3.
2. Personal Information:
o Fill in your personal details like:
 Name, PAN (Permanent Account Number), Aadhaar number, and
contact details.
o Specify the assessment year for which you are filing the return.
3. Filing Status:
o Indicate whether you are:
 An individual,
 A Hindu Undivided Family (HUF), or
 A partner in a firm.
4. Income Details:
o Report your income under the appropriate heads:
 Salary: Include salary, allowances, perquisites, and deductions.
 House Property: Report income from house property if applicable.
 Capital Gains: Include any income from the sale of capital assets.
 Business or Profession: If you have business or professional income,
provide the necessary details.
 Other Sources: Report income from any other sources, such as interest,
dividends, etc.
5. Partnership Details (if applicable):
o If you are a partner in a firm, provide details about the partnership, including:
 Name, PAN, and address of the firm.
6. Financial Particulars of Business/Profession:
o If you have income from business or profession, provide financial details,
including:
 Gross receipts, expenses, depreciation, and any other relevant financial
details.
7. Schedule BP:
o Fill in Schedule BP for computing income under the head "Profits and Gains
from Business or Profession."
8. Deductions and Exemptions:
o Mention any deductions you're eligible for under sections like 80C, 80D, etc.
o Declare any exemptions you’re entitled to.
9. Tax Computation:
o Compute your total income and tax payable according to the applicable tax
slabs.
o Mention any advance tax or self-assessment tax that you have already paid, if
applicable.
10. Verification:
o Verify all the details you have entered in the form.
o Sign and date the form to complete the verification process.
11. Filing Options:
 o Depending on your country’s regulations, you can file the return either online or
offline.
o Follow the instructions provided for submission.
12. Supporting Documents:
o Attach necessary documents, such as:
 Form 16 (for salaried individuals), proof of investments, and any other
required documents.
13. E-filing Acknowledgment:
o If filing online, ensure you save a copy of the e-filing acknowledgment for your
records.
14. Deadline:
o Make sure you file your ITR before the due date to avoid penalties for late filing.

4. BRIEF THE PROVISION REGARDING THE DIFFERENT FORMS FOR FILING RETURN
OF TDS

TDS (Tax Deducted at Source) is a method by which the government collects tax at the point
where income is generated. Here's a breakdown of the key provisions regarding the filing of TDS
returns:

1. TDS Deduction and Payment:

o Who deducts TDS?: Entities making certain payments (like salaries, rent,
professional fees, etc.) are required to deduct tax from these payments.
o When is the tax paid?: The deducted TDS must be paid to the government on
time.
2. TDS Return Filing:
o Who files the return?: The entities that deduct TDS are required to file returns.
These returns show the amount of TDS deducted and deposited with the
government.
o What’s in the return?: The return includes details of the tax deducted and paid.
3. Frequency of TDS Return Filing:
o How often is the return filed?: TDS returns are filed quarterly. The due dates
are:
 1st quarter (April to June): July 31
 2nd quarter (July to September): October 31
 3rd quarter (October to December): January 31
 4th quarter (January to March): May 31
4. Types of TDS Return Forms:
o There are different forms depending on the type of income:
 Form 24Q: For TDS on salaries.
 Form 26Q: For TDS on payments other than salaries.
 Form 27Q: For TDS on income paid to non-residents.
5. Details Required in TDS Returns:
 o The return will need details like:
 PAN of both the deductor (the one deducting tax) and deductee (the one
from whom tax is deducted).
 TDS challan details (proof of payment).
 Amount of TDS deducted.
6. Late Filing Penalty:
o If TDS returns are filed late, penalties may be imposed for the delay.
7. Correction of TDS Returns:
o If there are mistakes or missing details in the return, the deductor can correct it
by filing a corrected return.
8. TAN (Tax Deduction and Collection Account Number):
o The entity deducting TDS needs to obtain a TAN (a unique identification number)
for all TDS transactions and filings.
9. Defaults and Prosecution:
o If a deductor does not comply with TDS rules, they could face penalties and
prosecution under the Income Tax Act.

5. EXPLAIN DEDUCTIONS TO BE MADE UNDER SECTION U/S 80C TO 80U

Sections 80C to 80U of the Income Tax Act provide various deductions that an individual can
claim from their gross total income to reduce their taxable income. Here's a breakdown of these
sections:

1. Section 80C – Deductions for Savings and Investments

 Eligible Investments:
o Provident Funds (PF, RPF, PPF): Contributions made to these funds qualify for
deduction (up to Rs. 1,50,000).
o Life Insurance Premium: Premiums paid for life insurance policies on the life of
the taxpayer, their spouse, or children.
o National Savings Certificate (NSC): Investments in NSC, including accrued
interest, are deductible.
o Pension Funds: Contributions to a pension fund qualify.
o Home Loan Repayment: Principal amount of the home loan paid during the
year.
o Tuition Fees: Fees paid for the education of up to two children.
o Equity Linked Savings Scheme (ELSS): Investments in these mutual funds also
qualify.
 Maximum Deduction: Rs. 1,50,000 in total across all eligible investments under Section
80C.

2. Section 80CCC – Contributions to Pension Funds

  Eligible Investment: Contributions made to a pension fund by life insurance companies.
 Maximum Deduction: Rs. 1,50,000 (cumulative with Section 80C and 80CCD).

3. Section 80CCD – Contributions to National Pension Scheme (NPS)

 Employees’ Contribution: 10% of salary (basic + DA) can be claimed as a deduction.

 Self-Contribution: Individuals can claim a deduction for voluntary contributions to
NPS, subject to a maximum limit of Rs. 1,50,000.

4. Section 80CCD(1B) – Additional Deduction for NPS

 Additional Benefit: An extra deduction of Rs. 50,000 is available specifically for NPS
contributions, over and above the Rs. 1,50,000 limit under Section 80C, 80CCC, and
80CCD.

5. Section 80D – Medical Insurance Premium

 Self and Family: Deduction for premiums paid for health insurance policies for the
taxpayer, their spouse, children, and parents.
 Deduction Amount:
o Rs. 25,000 for individuals below 60 years of age (Rs. 50,000 for senior citizens).
o Senior Citizen Deduction: Up to Rs. 50,000 if the parents are senior citizens.

6. Section 80DD – Medical Treatment for Disabled Dependents

 Eligibility: Deduction for expenses incurred for the medical treatment and rehabilitation
of a dependent relative who is physically disabled.
 Deduction Amount:
o Rs. 75,000 for normal disability.
o Rs. 1,25,000 for severe disability.

7. Section 80DDB – Medical Treatment for Specific Diseases

 Eligibility: Deduction for expenses on the treatment of specified diseases like cancer,
AIDS, renal failure, etc.
 Deduction Amount: Rs. 40,000 for normal individuals and Rs. 1,00,000 for senior
citizens.

8. Section 80E – Interest on Loans for Higher Education

 Eligibility: Deduction for interest paid on loans taken for higher education for self,
spouse, or children.
 Time Period: Deduction can be claimed for 7 years or until the loan is repaid, whichever
is earlier.
9. Section 80EE – Interest on Home Loan

 Eligibility: Deduction for interest paid on home loans.

 Conditions:
o Loan amount should not exceed Rs. 35,00,000.
o The value of the property should not exceed Rs. 50,00,000.
o The loan must be sanctioned between April 1, 2016, and March 31, 2017.
 Deduction Amount: Rs. 50,000 over and above the deduction under Section 24 for home
loan interest.

10. Section 80EEA – Interest on Home Loan for First-Time Home Buyers

 Eligibility: For first-time homebuyers, a deduction for interest on home loans.

 Conditions:
o The property value must be less than Rs. 45,00,000.
o The loan must be sanctioned between April 1, 2019, and March 31, 2021.
 Deduction Amount: Rs. 1,50,000.

11. Section 80G – Donations to Charitable Institutions

 Eligibility: Donations made to approved charitable funds and institutions.

 Deduction: Varies depending on the institution, and can be 50% or 100% of the donation
amount.

12. Section 80GG – Rent Paid (Without HRA)

 Eligibility: Deduction for rent paid if the individual is not receiving House Rent
Allowance (HRA).
 Conditions:
o The taxpayer must live in a rented house.
o The taxpayer or their spouse should not own a house in the same city.
 Deduction Amount: The least of the following:
o Rs. 5,000 per month.
o 25% of adjusted gross total income.
o Rent paid minus 10% of adjusted gross total income.

13. Section 80TTA – Interest on Savings Account

 Eligibility: Deduction for interest earned from savings accounts in banks, cooperative
banks, or post offices.
 Deduction Amount: Up to Rs. 10,000 per year.

14. Section 80U – Rebate for Disabled Individuals

 Eligibility: Deduction for individuals with disabilities.

  Deduction Amount: Rs. 75,000 for normal disability and Rs. 1,25,000 for severe
disability.

These sections provide taxpayers with multiple ways to reduce their taxable income by making
specific investments or incurring certain expenditures, thereby reducing their overall tax liability.