Category Archives: How to file ITR

Changes required for DTC(Direct Tax Code) 3.0 for FY 2013-14
Posted by:V.K. sharma, September - 10 - 2012

Filing income tax return is very easy. Even a ordinary person can also file his income tax return. Government has proposed DTC three years but it was never applied in its original form. There are still certain points required to be changed in it. Some of the changes needed are listed below:

1. Exemptions and deductions

Original DTC proposal

Most exemptions and deductions were not available.

Revised DTC

All the sections of the Income Tax Act are still exist.

Changes Required in DTC 3.0

The average private-sector employee gets 20-30 % of his net take-home salary as tax-free reimbursement. Every month, millions of Indians fill out fictitious bills to claim tax-free reimbursements and allowances. Doing away with these exemptions and deductions will simplify the tax structure and plug tax leakages.

2. Tax slabs

Original DTC proposal

No tax on income up to 2 lakh; up to 10 lakh taxed at 10%; up to 25 lakh at 20%; and 30% tax on income beyond 25 lakh.

Revised DTC

Brought down tax slabs. Basic exemption of 2 lakh; up to 5 lakh at 10%; up to 10 lakh at 20%; and over 10 lakh at 30%.

Changes Required in DTC 3.0

If exemptions and deductions are removed, the tax slabs must also be raised to cushion the taxpayers from the impact. The change will not hit the income tax collections because of the higher income in the tax net.

3. Real estate

Original proposal Of DTC

Removed tax benefits on home loans. Rent presumed at 6% of value. Standard deduction reduced to 20% of rental income.

Revised DTC

Reinstated home loan benefits and did away with 6% presumptive rent. No change in reduction of standard deduction.

Changes Required in DTC 3.0

Any change in tax benefits should be from prospective effect . It would be unfair for existing borrowers if the rules are changed midway. The presumptive 6% rent checks tax leakage and should be reinstated.

4. Capital gains

Original proposal Of DTC

Removed all distinction . All gains were to be uniformly taxed as income. Tax could be deferred by investing in Capital Gains Savings Scheme.

Revised DTC

50% of the long-term capital gains on equities to be tax-free and balance to be taxed at marginal rate. Capital Gains Savings Scheme shot down.

Changes Required in DTC 3.0

The original proposal had simplified the tax structure but the revised bill introduced a complex calculation. A uniform tax on all gains, be it from equity, debt or gold (short- or long-term ), will simplify things.

5. Life insurance

Original proposal Of DTC

Tax benefits only if the cover is 20 times the annual premium.

Revised DTC

No change, but later hinted at lower limit of 10 times the annual premium.

Changes Required in DTC 3.0

Life insurance is the favorite tax-saving option for a lot of Indians. The original proposal had sharpened the focus on life cover offered by an insurance policy. This might make it difficult for people above 40 years to claim tax benefits on life insurance policies, but it will also make people buy life insurance for the right reasons and encourage longer terms.

6. Tax-saving limits

Original proposal Of DTC

Higher annual tax-saving limit of 3 lakh for an individual.

Revised DTC

Retained the limit, but included in it the home loan benefit of 1.5 lakh. It also set a sub-limit of 50,000 for life and medical insurance.

Changes Required in DTC 3.0

It’s a throwback to the Section 88 era, when the government decided how one should split tax-saving investments. The sub limits should be removed and the allocation of 3 lakh should be left to the taxpayer.

7. Retirement planning

Original proposal Of DTC

One umbrella Retirement Benefit Account (RBA) for all retirement savings of an individual.

Revised DTC

Dropped the RBA because it was difficult to build and maintain such a huge data base for individuals.

 Seventh Change Required in DTC 3.0

The RBA can allow the investor to switch between options without any tax implications and withdraw only after he is 60. This flexibility can be an impetus for retirement savings. The excuse given in the revised draft is not tenable.

source TOI, sep10,2012

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Filing Income tax is on main priority these days for every one as 31st July 2012 is the last date for many people but there are many cases as well where ITR can be filed by 31st March 2013.

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

Last date of filling income tax

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

Why filling return is important what are benefits/losses of filing ITR’s? What is refund? Do I have to attach any document along ?

How to Save Income Tax, Pan & Return, Refund, and where to deposit.
How to Save Income Tax, Pan & Return, Refund, and where to deposit.

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

Which form is required to file ITR? There are many forms like ITR 1, ITR 2, ITR 3, ITR 4, ITR 4S or SUGAM.

ITR forms as per your income and profession
ITR forms as per your income and profession

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

When you have learned which form is to be filled you can download them by clicking on their names.

ITR-1 SAHAJITR-2ITR-3ITR-4ITR-4S SUGAM.

What all you need to file ITR ?

Document Needed to File ITR
Document Needed to File ITR

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

Now Follow the procedure to file ITR Online.

How to file income tax Online
How to file income tax Online

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

While filing ITR people often make mistakes, Top 5 mistakes to be careful about are :

5 mistakes, while filling ITR
5 mistakes, while filling ITR

Sample illustration showing how to fill ITR 1 form with the help of Form 16

See how to fill ITR 1 from form 16
See how to fill ITR 1 from form 16
 how to fill ITR form using your form 16
how to fill ITR form using your form 16

For Saving taxes under Section 80 (C) &Section 80 (D)  Call 99100-39879 Services only in Delhi NCR

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