Frequently Asked Questions For Income Declaration Scheme, 2016
Where an undisclosed income in the form of investment in asset is declared undered the Scheme and tax, surcharge and penalty is paid on the fair market value of the asset as on 01.06.2016, then will the declarent be liable for capital gains on sale of such asset in the future? If yes, then how will the capital gains in such case be com[uted?
Where a notice under section 142(1)/ 143(2)/ 148/ 153A/ 153C of the Income-tax Act has been issued to a person for an assessment year will he be ineligible from making a declaration under the Scheme?
Yes, the declarant will be liable for capital gains under the Income-tax Act on sale of such asset in future. As per the current provisions of the Income-tax Act, the capital gains is computed by deducting cost of acquisition from the sale price. However, since the asset will be taxed at its fair market value the cost of acquisition for the purpose of Capital Gains shall be the fair market value as on 01.06.2016 and the period of holding shall start from the said date (i.e. the date of determination of fair market value for the purposes of the Scheme).
What is the structure of the ITR-2 Form?
The person will only be ineligible from declaration for those assessment years for which a notice under section 142(1)/143(2)/148/153A/153C is issued and the proceeding is pending before the Assessing Officer. He is free to declare undisclosed income for other years for which no notice under above referred sections has been issued.
How do I fill out my ITR-2 Form?
ITR-2 is divided into:
Part A: General Information
Part B-TI: Computation of Total Income
Part B-TTI: Computation of tax liability on total income
Details to be filled if the return has been prepared by a Tax Return Preparer
Schedule S: Details of income from salaries
Schedule HP: Details of income from House Property
Schedule CG:. Computation of income under Capital gains.
Schedule OS: Computation of income under Income from other sources.
Schedule CYLA: Statement of income after set off of current year's losses
Schedule BFLA: Statement of income after set off of unabsorbed loss brought forward from earlier years.
Schedule CFL: Statement of losses to be carried forward to future years.
Schedule VIA: Statement of deductions (from total income) under Chapter VIA.
Schedule 80G: Statement of donations entitled for deduction under section 80G.
Schedule SPI: Statement of income arising to spouse/ minor child/ son's wife or any other person or association of persons to be included in the income of assessee in Schedules-HP, CG and OS.
Schedule SI: Statement of income which is chargeable to tax at special rates
Schedule EI: Details of Exempt Income
Schedule IT: Statement of payment of advance-tax and tax on self-assessment.
Schedule TDS1: Details of tax deducted at source on salary.
Schedule TDS2: Statement of tax deducted at source on income other than salary.
Schedule FSI: Statement of income accruing or arising outside India.
Schedule TR: Details of taxes paid outside India.
Schedule FA: Details of Foreign Assets.
Schedule 5A: Statement of apportionment of income between spouses governed by Portuguese Civil Code.
What is the best sequence to fill it out?
Here are a few general guidelines to keep in mind while filling your ITR-2 form:
If any schedule is not applicable to you, strike it out and write ---NA--- across it
If any item is not applicable to you, write NA against it
Indicate nil figures by "Nil"
Put a "-" sign before negative figures
All figures are to be rounded off to the nearest one rupee except figures for total income/loss and tax payable. Those are to be rounded off to the nearest multiple of ten.
If you are an individual, under the Employer Category you should tick Government if you are a Central/State Government employee. You should tick PSU if you work in a public sector company of the Central/State Government.
What is ITR 2A?
The easiest way to fill out your ITR-2 Form is to follow this sequence:
2)All the schedules
3)Part B-TI and Part B-TTI
Who is eligible to file ITR 2A?
ITR-2A is a newly-introduced income tax return form meant for individuals and HUFs who have salary income and own more than one house property and do not have income from capital gains.
Who cannot use this form?
If total income for an individual or a Hindu Undivided Family for the includes:
a) Income from Salary / Pension; or
b) Income from House Property; or
c) Income from Other Sources (including Winning from Lottery and Income from Race Horses).
Then ITR-2A should be used by an individual or a Hindu Undivided Family.
Note: Those who have long-term capital gains from transactions on which Securities Transaction Tax is paid (which are exempt) from tax can still use this form.
Note-In a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used where such income falls in any of the above categories
What is the structure of the ITR-2A Form?
This Return Form should not be used by an Individual or a Hindu Undivided Family whose Total Income for assessment year includes: - :
a) Income from Capital Gains; or
b) Income from Business or Profession; or
c) Any claim of relief/deduction under section 90, 90A or 91; or
d) Any resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India; or
e) Any resident having income from any source outside India.
What is the difference between ITR 2 & ITR 2A?
ITR-2A is divided into two parts and several schedules:
Part-A: General information requiring identificatory and other data
Part-B-TI: Computation of total income
Part B-TTI: Computation of tax liability on total income
Tax Payments: Statement of payment of advance-tax and tax on self-assessment, TDS on Salaries and TDS on non-Salary income
Schedule-S: Computation of income under the head Salaries
Schedule-HP: Computation of income under the head Income from House Property
Schedule-OS: Computation of income under the head Income from other sources.
Schedule-CYLA: Statement of income after set off of current year’s losses
Schedule-BFLA: Statement of income after set off of unabsorbed loss brought forward from earlier years.
Schedule- CFL: Statement of losses to be carried forward to future years.
Schedule-VIA: Statement of deductions (from total income) under Chapter VIA.
Schedule 80G: Statement of donations entitled for deduction under section 80G
Schedule SPI: Statement of income arising to spouse/ minor child/ son’s wife or any other person or association of persons to be included in the income of assessee in Schedules-HP, CG and OS.
Schedule-SI: Statement of income which is chargeable to tax at special rates
Schedule-EI: Statement of Income not included in total income (exempt incomes)
Schedule-5A: Statement of apportionment of income between spouses governed by Portuguese Civil Code.
What is ITR 4S?
ITR 2A is the newly introduced easy version for ITR 2.So if an individuals and HUFs who have salary income and own more than one house property and do not have income from capital gains,can go for ITR 2A instead of ITR 2.
Who is eligible to file ITR 4S?
The SUGAM ITR-4S Form is a Presumptive Income Tax Return Form and is part of the Income Tax Returns Filing process with the Income Tax Department of India.
Who cannot use this form?
This Return Form can be used by Individual/HUF whose total income includes: -
1)Business income where such income is computed in accordance with special provisions referred to in section 44AD and 44AE (i.e. on presumptive basis)
2)Income from salary/ Pension
3)Income from one house property (excluding cases where loss is brought forward from previous years)
4)Income from other sources (Excluding winning from lottery and income from race horses)
Note:In a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used where such income falls in any of the above categories.
What do u mean by presumptive business?
An important factor to take note of before filing Income Tax Returns through the SUGAM ITR-4S Form is that this Form is not to be used by any Individual or Hindu Undivided Family that fulfills any of the following criteria:
• Holds any assets outside the country
• Has any financial interest in a foreign entity
• Is a signing authority in any bank account that is located outside the Indian Territory
• ITR 4S has been released for AY 2014-15, 2015-16 and 2016-17 by Income Tax Department
What is scheme under section 44AD?
As per the Income-tax Law, a person engaged in business is required to maintain regular books of account and further, he has to get his accounts audited. To give relief to small taxpayers from this tedious work, the Income-tax Law has framed the presumptive taxation scheme under sections 44AD,44ADA and 44AE.
What is the Eligibility Criteria for this Scheme?
Features of this Scheme-
• Your Net Income is estimated to be 8% of the gross receipts of your business.
• You don't have to maintain books of accounts of this business.
• You don't have to pay Advance Tax for such a business.
• You are not allowed to deduct any business expenses against the income.
What Provisions to be applied if a person does not opt for the presumptive taxation scheme of section 44AD and declares income at a lower rate, i.e., at less than 8%
To be eligible for this scheme:
• Your gross receipts or turnover of the business for which you want to avail this scheme should be less than Rs 1 crore.
• You must be a Resident in India.
• This scheme is allowed to an individual, a HUF or a partnership firm. It is not available to a Company.
What is the Consequences if a person opts out from the presumptive taxation scheme of section 44AD ?
A person can declare income at lower rate (i.e., at less than 8%), however, if he does so, and his income exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited as per section 44AB.
What is the Applicability of the presumptive taxation scheme of section 44AE ?
If a person opts for presumptive taxation scheme then he is also require to follow the same scheme for next 5 years. If he failed to do so, then presumptive taxation scheme will not be available for him for next 5 years.
Further, he is required to keep and maintain books of account and he is also liable for tax audit as per section 44AB from the AY in which he opts out from the presumptive taxation scheme. [If his total income exceeds maximum amount not chargeable to tax]
Who is the Eligible taxpayer and what is the eligible business for the purpose of the presumptive taxation scheme of section 44AE
The scheme of section 44AE is designed to give relief to small taxpayers engaged in the business of plying, hiring or leasing of goods carriages
How is the income computed under this section?
The provisions of section 44AE are applicable to every person (i.e., an individual, HUF, firm, company, etc.). .
The presumptive taxation scheme of section 44AE can be adopted by a person who is engaged in the business of plying, hiring or leasing of goods carriages and who does not own more than10 goods vehicles at any time during the year..
The presumptive income computed at the rate of Rs. 7,500 per goods vehicle per month and no further expenses will be allowed or disallowed.
However, in case of a taxpayer, being a partnership firm, opting for the presumptive taxation scheme, from the income computed at the rate of Rs. 7,500 per goods vehicle per month, further deduction can be claimed on account of remuneration and interest paid to partners (computed as per the Income-tax Act).