All You Need To Know About Form 16

ITR Form 16 is one of the most common financial documents anyone could come across when filing for Income Tax Return.

This year, the Income Tax department has studied the layout of Form 16 by including various details to make them more elaborated. The variations in ITR Form 16 format have been made to bring them in similarity with the latest variations made in ITR (income tax return) forms.

The revised format for ITR Form 16 has already been notified by the Income Tax department and will come into effect from May 12, 2019. In short, this means that the income tax returns for the financial year of 2018-19 will have to be filed on the basis of studied Form 16.

Understand Form 16

Form 16 is a certificate (issued under section 203 of the Income Tax Deducted at Source (TDS) by the employer and submitted by them to the Income Tax Department (IT Department). It has details of how much tax did the employer subtracted and when was it submitted to the IT department.

In case you have changed jobs during the year and moved on to another job, or have worked with different employers at the same time, and tax has been subtracted in all places, you will have to get different Form 16 from all of them.

However, if your employer(s) did not subtract any tax from your salary, considering your income for the year is below the tax-exemption limit, they may not issue ITR Form 16.

Following points will help you Understand Form 16

  • Form 16 has two different parts which are Part A and Part B, which replicates most of the details divided into parts. These features of Form 16 are very important when filing IT returns.
  • Part A of Form 16: This form includes the basic detail of the employee and the employer, it also consists of details of how much tax was deducted and the dates, that when was it deposited.
  • Part B of Form 16: This form has the division of how the tax was computed considering declaration which is made at the beginning of the financial year.
  • Benefits of Form 16: Form 16 works as a proof for you that your employer has deposited the TDS amount and has not conducted any fraud.

Filing ITR Form 16

Form 16 is one of the most significant official documents you need when filing your IT returns. Whether you’re filing your returns on your own, or pursuing help from your Chartered Accountant, it is important to understand the processes for filing returns with Form 16.

How to File Income Tax Online?

Paying Online Income Tax time to time is a duty for any individual taxpayer, there are many taxpayers who have already paid their taxes and filled for Online Income Tax Return for the assessment year 2017-18 and 2018-19. Online Income Tax payment has made it now easier than ever to easily and efficiently pay taxes and file a return online.

How to file Online Income Tax?

  1. Login with required documents
  2. Enter the personal information
  3. Enter salary details
  4. Enter details for claiming a deduction
  5. Enter details of the taxes which are paid
  6. Enter bank details and proceed to e-filing
  7. E-verify online income tax return

Advantages of Filing Online Income Tax Return

The process of filing of Income Tax Returns used to be exhausting as well as difficult but with the introduction of Online Income Tax, the burden has decreased. The method for the filing of Online Income Tax returns helps an individual in the following ways:

Once you have logged in to your account, click the “e-file” button and select “Income Tax Return” option.

  • Every year, there is a deadline for filing income tax returns that is 31st. Filing your tax returns a month or two in advance can help you finish the task rapidly as you will face less crowding on the website, which tends to delay as the final date approaches.
  • Not filing the income tax return on time can lead to disadvantages of penalties for each day until the payment is done. Filing of Online Income Tax return offers you the suitability of filing your returns on time anytime and from anywhere you wish to.
  • Filing of Online Income Tax helps you keep a record of all the financial transactions with the IT Department in a well-organized way. Whenever an individual or an organization pursues a loan from any bank or financial institution, proof of income is mandatory. This record can be your proof of income.

July 31 is the final date to file your taxes. Contrary to what many tax-payers think, filing your income tax returns is actually a simple process. Online Income Tax paying has been got more easy and relevant. You can file your returns online from your home.

When you pay your tax through Online Income Tax returns, you must register yourself on the Income Tax department website and have a Digital Signature Certificate (DSC).

For this, log in to the IT website and go to Profile Settings and click on Register DSC. If you do not have a DSC, you must mail the form to the tax department processing center in Bengaluru after you e-file your tax returns through Online Income Tax.

Difference in HUF and Other Type of Tax Entities

Forming a HUF is a common tax-saving practice in India. Hindu Undivided Family (HUFS) can be created by any Hindu family by coming together. Taxes can be saved by creating a family unit and pooling in all the assets to form a HUF.

Apart from Hindu families, Sikhs, Jains, and Buddhists are also allowed to form HUF. A HUF will have its own PAN and tax returns are filed independently.

How Is HUF Taxed and Why Is It Different From Other Type Of Tax Entities?

So basically a HUF is taxed separately from its member, which allows it to get more deductions or exemptions allowed under tax laws. Let’s take an example to understand it better.

Example: Suppose there is a family of 4, Husband, Wife and 2 kids. If they decide to form a HUF then the HUF will be taxed separately from all the 4 members of the family. This means that the deductions allowed under Section 80C can be claimed by all 4 members of the family as well as the HUF.

So that’s the gist of the matter, now let’s delve a little deeper.

HUF will be provided a separate PAN and will have to file a separate tax return. HUF is an entity separate from their members and will be treated separately by the tax laws.

As a separate entity, HUF can pay salary to its member for performing business tasks and contributing to the overall functionality of the family one way or the other.

Tax deductions and exemptions (like Section 80) can be availed by the HUF separate from the members of the family.

HUF can take Life Insurance Policy on the life of its members. HUF can also make investments from the income made by it.

The returns from any of these investments are taxable for the HUF.

Limitations Of HUF

HUF can be formed by a single individual, only a family can combine to form a HUF.

Hindus, Buddhists, Jains, and Sikhs can form HUFs.

All the members in a HUF will have equal rights and equal say over any sale or purchase involving HUF assets.

 

Trutax.in Online Free Tax Filing Services

ITR-1 Form Filing

Filing for Income Tax is an easy enough job but sometimes due to your hectic life, you don’t pay much attention to it. Finally, you don’t get all the benefits you can because you don’t really know about the deductions and exemptions set by the Government for tax reduction.

With Trutax, you can file an Income tax return for free and with expert help to get the best deductions & exemptions. Our main objective is to provide the best services for our clients. We have a team of experts who are very much capable of providing all the operations required to make a happy client.

We follow a specific procedure to provide a number of different level of services. Although our basic tax filing is for free, further services are divided into different levels as per the operations performed.

  • Salary & Income / Previous Year ITR
  • Ultimate Tax Saver
  • Financial Planning
  • Ultimate 365 Plan
  • NRI Plan
  • Freelancers & Consultants

All the above-mentioned plans are curated to help customers with different levels of tax-filing services.

Trutax doesn’t just offer tax filing services but also helps to save taxes with expert analysis. At TruTax, specific processes and instruction by experts are followed to the dot to provide the best results for our customers. While managing the finances and accounts of any individual, working under certain ethics is essential. All our staff is well trusted, educated and experienced to handle any scale of filing work.

 

Income Tax Filing For Salaried People

ITR1 Sahaj Form is the one that has to be filed by salaried people for Income Tax Return. Any individual with an annual salary of less than Rs. 50 Lakhs can fill this form. In this blog, we will discuss the ITR1 Sahaj Form in detail. There are several other taxpayers group which need to fill another form to file for return but for salaried individuals, its ITR1 Sahaj Form.

Eligibility For Filing Form ITR1

The form needs to be filed by any individual with income less than or Rs. 50 Lakhs from the sources mentioned below:

  • From Salary
  • From One House Property
  • From other sources excluding Lottery or Horse Races

Even in case you are filing clubbed income tax returns with a spouse, the limit will be the same.

So, that’s the people who can file Form ITR1 Sahaj, now let’s look at the people who are not eligible to file this form.

  1. An individual having income above Rs 50 lakh.
  2. An individual who is either a director in a company and has invested in unlisted equity shares.
  3. Residents not ordinarily resident (RNOR) and non-residents.
  4. Also, individuals who have earned income through the following :
  5. More than One House Property
  6. Lottery, Racehorses, Legal Gambling, etc.
  7. Taxable Capital Gains (Short term and Long term)
  8. Agricultural income exceeding Rs. 5,000
  9. Business
  10. Individual who is a Resident and has assets (including financial interest in any entity) outside India or signing authority in any account located outside India.
  11. Individual claiming relief of foreign tax paid or double taxation relief under section 90/90A/91.

How To Fill The Form?

Like any other Income Tax related form, this one can also be filed in two different ways i.e. Online & Offline.

The offline method is only for:

  1. An individual at the age of 80 years or more at any time during the previous year
  2. An individual or HUF whose income does not exceed Rs 5 lakhs and who has not claimed any refund in the return of income.

To file ITR1 online, there are two ways:

  • Transmit data electronically and then submit the verification of ITR in the form of ITR-V to CPC.
  • File the return online and verify the ITR-V through net banking/AADHAR OTP.

All the criteria mentioned above are for Financial Year 2019-20 as there were a few changes made in ITR1 for AY 2018-19 as well as AY 2019-20.

Note: AADHAR Card is Mandatory for filing ITR1 Sahaj form. It is mandatory that your AADHAR Card is linked to the PAN for filing this form.

Problems Faced By Salaried People While Filing ITR

income tax filing online

As the deadline for filing Income Tax Returns approaches, a large number of salaried tax paying individual panic and try to quickly get over with it. And that leads to problems with their returns and they are served a tax notice. There are various reasons due to which a salaried individual may find it problematic to get it right.

Using the Wrong Form for Filing ITR

As the law states, all the individuals are required to provide details about all the sources of their income. Now there are different forms used for different purposes and if an individual uses the wrong form to file ITR then his form will be considered ‘wrong or defective’ and he will need to file the correct form again.

In case an individual files ITR using the wrong form, he will be given a period of 15 days to rectify his mistake and fill out the correct form. The individual can request for a prolonged period if the assessment officer sees the need for an extension. If the individual still fails to submit the correct form with all the required details and document then he will be treated like anyone who hasn’t filed for ITR and will face penalties for the same.

Failing To Report Income from Different Sources

A number of salaried individuals are confused about the taxable income, sources of income and tax relief associated with different sources of income. Apart from reviewing all the bank statements and salary slips, an individual is required to show income from

  • Income from Salary
  • Income from House or Property
  • Income from Businesses or Profession
  • Income from Capital Gains
  • Income from Other Sources

There is a simple way to ensure that you don’t miss to state income from any source -just download form 26AS which reflects income received by you and tax associated with it.

Lack of Knowledge about Deductions and Exemptions

If you have ever visited the official website of Income Tax India’s official website, you will see those tax laws keep on changing every year and it is very important to be up to date with the changes made in law in the previous years.

Every year there are changes in tax laws around tax reliefs. But due to lack of information on the topic people often don’t pay attention to it.

Forgetting To Report Income from the Last Job

It is well known that Income Tax Return is filed for a financial year, so if any salaried individual has changed job in the middle of financial year then it is important he mentions income from both the jobs with all the correct documents.

A special Form 16s is required to be filed if an individual has changed their job in between a financial year. This makes the matter a bit tricky and prone to mistake from any inexperienced taxpayer.

Getting Required Tax Proofs To Employer

To get certain tax relief, a salaried employee is needed to submit certain tax-related to the employer. The employer then files for deductions and exemptions through Form 16 and the employee can then claim deductions while filing their ITR.

 

 

Everything You Need To Know About The New Form 16

The new Form 16 is basically a certification issued by the employer which shows that TDS has been deducted on the behalf of the employee and deposited with the authorities. It has to be issued by the Employer to the Employee under Section 203 of the Income-tax Act, 1961. It has two sections—part A and B.
The Form contains all the information needed to prepare and file your income tax return. The Form is issued just after the end of the financial year i.e. 15th June of every year to follow the tax deduction of the financial year.
Form 16 constitutes of 2 parts- Part A & Part B. Part A of the form has to be downloaded from the TRACES Portal (https://www.tdscpc.gov.in/app/login.xhtml) by the employer.
Part A
If a person has changed jobs in a financial year then they will be provided separate Form 16 Part A by the employers for different periods of employment.
The information that needs to be provided in Part A of Form 16 is:
 Name and address of the employer
 TAN (Tax Deduction Account Number) & PAN (Permanent Account Number) of employer
 PAN of the employee
 Summary of tax deducted & deposited quarterly, which is certified by the employer

Part B
The Part B of Form 16 is basically an annexure to the Part A. If a person has worked for multiple employers during the financial year then they can decide if they want Part B from all the employers or just the last one.
The information (newly for FY 2019-20) that is needed to be provided in Part B of Form 16 is:
1. Detailed breakup of salary
2. Detailed breakup of exempted allowances under Section 10
 Leave travel concession exempt under Section 10(5)
 Death cum retirement gratuity exempt under Section 10(10)
 Commuted value of pension under Section 10(10A)
 Leave encashment under Section 10(10AA)
 House Rent Allowance under Section 10(13A)
3. Deductions allowed under the Income Tax Act (under chapter VIA):
 Specific fields are notified for deductions mentioned below:
 Deduction for life insurance premium paid, contribution to PPF, etc., under Section 80C
 Deduction for contribution to pension funds under Section 80CCC
 Deduction for employee’s contribution to a pension scheme under Section 80CCD (1)
 Deduction for taxpayer’s self-contribution to a notified pension scheme under Section 80CCD (1B)
 Deduction for employer’s contribution to a pension scheme under Section 80CCD (2)
 Deduction for health insurance premium paid under Section 80D
 Deduction for interest paid on loan is taken for higher education under Section 80E
 Deduction for donations made under Section 80G
 Deduction for interest income on savings account under Section 80TTA

Why TruTax Stand outs?

filing tax returns

Managing your finances can be tricky for individuals and organizations alike. For big organizations, it is still a manageable task as they can hire the workforce to take good care of their accounts but for individuals as well as small businesses, it can be hard to properly manage their finances and get better tax benefits. That’s where experts like TruTax can really help to achieve better tax deductions and make smart investment
decisions.

The main reason behind investment is either growth in wealth or saving taxes. If we want to bifurcate the reason for making any investment, it is either of the two options mentioned above. There are different investments options available in the market which will help you achieve your objective of either growing wealth or saving taxes.
Most of the time, the goal is not just to save taxes or growth wealth but both. The investment options for everyone are quite different and depend upon a lot of different factors. At TruTax, we analyze all these factors with your finances in mind and provide you with the best options.

OUR PHILOSOPHY

Our sincere objective is to provide best services for our clients. We have a dedicated team of experts comprising of CAs, Former Income Tax Officials, MBA, Commerce professionals – all of whom are experienced and competent in their respective domains. We have a history of proven results and have served hundreds of customers up to their
satisfaction.

SERVICES

Our basic services involve the filing of different tax-related documents for individuals and organizations. But that’s not all. We provide customized services so you don’t have to worry about any filing processes over the span of the year.

Our Successive Process

➢ People
➢ Objective
➢ Analysis
➢ Strategy
➢ Satisfaction

At TruTax, specific processes and standard industry practices are meticulously followed to provide the best investment decision for our customers. While managing the finances and accounts of any individual, working under certain ethics is essential. All our staff is well trusted, educated and experienced to handle any scale of filing work.
When it comes to providing the best investment advice for our customers, we are a class apart from any other competitors in the market. We understand that investment needs and expectations for every individual are different. Keeping that in mind we provide customized investment options for different individuals after carefully analyzing all the factors involved.

How to Manage Taxes: Best Practices

This article has been written by professionals at TruTax and published in public interest. For personalised guidance please contact our experts for one-to-one advice.
___________________________________________________________
file income tax returns online
For an individual taxpayer, it is not easy to properly manage taxes. Most of them aren’t aware of the benefits of investments and tax exemptions they can gain by making strategic investments. In India, there are a number of different ways in which an individual can save taxes. In this article, we will discuss various options available to save taxes for an individual.

Using Rs. 1.5 Lakh Limit under Section 80C
Investment options under Section 80C are most popular and recommended by several experts for tax saving. Section 80C includes a number of investments and expenses which can be used to claim deductions on taxes. The limit for that is Rs. 1.5 Lakhs in a financial year.

How to Save Taxes Under Section 80C & 80D
An individual can make investments up to Rs. 1.5 Lakhs under Section 80C to reduce their taxable income. An individual has a large number of investment options to choose from. All the below mentioned investment schemes are subjected to a cap of Rs. 1.5 Lakh.

Tax Saving Fixed Deposits (FD)
You can get a deduction on tax for investments up to Rs. 1.5 Lakhs under 5 years tax-saver FDs. Usually, FDs carry a fixed interest rate which is currently between 7-8%. The interest on FDs is taxable.

Public Provident Fund (PPF)
Public Provident Fund is a saving scheme which was established by the Government of India. The tenure for this scheme is 15 years with a current interest rate of 8% which changes every quarter. This investment scheme is available at most banks and post offices across the country.
The interest of PPF is not taxable.

National Saving Certificate (NSC)
National Savings Certificate has a tenure of 5 years with a fixed interest rate which is currently 8%. The interest on NSC is automatically caped under the Rs. 1.5 Lakh limit under Section 80C.

NPS (National Pension System)
This deduction is also available under Section 80CCD up to Rs. 1.5 Lakh for contribution to NPS.

ELSS Funds
In these mutual funds, a minimum of 80% of the assets is invested in equity. The returns on ELSS funds are subject to Long Term Capital Gains Tax (LTCG) at 10%, over and above an exemption limit of Rs 1 lakh.

5-Year Bank Fixed Deposit 6% to 7% 5 years

Public Provident Fund (PPF) 7% to 8% 15 years

National Savings Certificate 7% to 8% 5 years

National Pension System (NPS) 8% to 10% Till Retirement

ELSS Funds 15% to 18% 3 years

Some other investment options under Section 80C are:

1. Life Insurance Premium
2. Home Loan Repayments
3. Payment of Tuition Fees
4. Employees Provident Fund
5. Senior Citizen Savings Scheme
6. Sukanya Samridhi Yojana

Payments of Health Insurance Premiums
Under Section 80D, an individual can claim a deduction up to Rs. 25,000 for the medical insurance premium. This is over the deductions which are mentioned above as well as the limit is different for senior citizens and individual contributing medical insurance for themselves and their senior citizen parents. The limit for deduction will
increase to Rs. 50,000 and Rs 75,000 respectively.

Other options and ways which can be used to avail tax benefits are
1. Deduction on your Rent
2. Deduction on interest on your home loan
3. Keep a certain amount of money in your Savings account (Amount of Rs. 10,000
is tax-free for any individual while the limit is Rs. 50,000 for Senior Citizens)
4. And you can always contribute to Charity

Now as we always say that knowing about the options is not the same as understanding them. It is not an easy task to properly formulate a strategy for tax saving over the span of a year. For receiving the best investment advice created personally for you after analyzing your accounts and income, you can always contact our experts at Trutax.
Even after knowing all the options, people are often confused about the best investment options. The issue is that different investment options are suitable for different people and just stating that a certain option is the best will not be a correct call. People often make a bad investment decision as they fall into peer pressure or get advice from unprofessional sources before making an investment decision and bear the consequences later. For long-term investments, it is very important to get expert advice because what might be good for someone else may not suit your situation.

TruTax has a team of dedicated CAs, CS, CPA, Former Income Tax Officials, MBAs, Commerce professionals to formulate the optimal strategy for you, and specifically for you. We deliver responsible advice which is sustainable and secure in the long term.
https://www.trutax.in

How To Avail The Benefits After Getting Your PAN Linked With Your Bank Account?


Income tax Department will credit your refund directly to the bank account only if the bank account is seeded with PAN of the taxpayer. Further, for refunds above a particular threshold, the name of the taxpayer as per bank account and name as per the Income Tax Database should match.
After the bank account is updated with your PAN, you should also pre-validate your bank account on the e-filing website. This can be done in three ways:

Option 1 – Use NetBanking to E-filing account redirection (recommended)
Option 2 — Use pre-validated bank account functionality on the e-filing portal if you do not have a net banking facility
Option 3- Provide IFSC code of Bank Branch and Bank Account where PAN has been linked

Steps for each of the above options have been elaborated below.

Use redirection from NetBanking website of the bank to e-Filing account

 Go to the internet banking website of your respective bank. Provide Login Details and Login to your internet banking website with the help of your banking registered user id and password.
 Go to TAX center or E-Tax or any similar facility after login to NetBanking website of the bank
 After logging into theNetBanking website of the bank select e-verify option which is usually under the ‘Tax’ or ‘e-Tax’ or ‘Tax Center’ tab. Select the PAN and Bank Account for re-direction/e-Verification/e-Filing. Submit to get re-directed to Income Tax Department e-Filing website to the e-Filing account of the taxpayer
 You will be redirected to the e-filing website of the income tax department.
 Your Bank Account will be treated as validated and ready for ECS credit of any refund due.

Use Pre-validated bank account functionality on e-filing portal
 Login to Income Tax Department’s e-Filing portal- www.incometaxindiaefiling.gov.in
 After login to e-filing portal, fill up details by selecting “Pre-validated your bank account” link under “Profile setting”
 Fill the appropriate fields and Submit to pre-validate your bank account
 The details will be immediately cross-validated with the bank and if confirmed by a bank then your Bank Account will be treated as validated and ready for ECS credit of any refund due.

Provide IFSC code of Bank Branch and Bank Account where PAN has been linked

 Login to Income Tax Department’s e-Filing portal- www.incometaxindiaefiling.gov.in
 After login to e-Filing portal, select the “Pre-validated your bank account” tab under “Profile setting” section. Since NetBanking redirection and pre-validation has not been used or has failed or is not applicable (the bank is not in the list), you can submit the bank details which will be verified by Department separately.
 Fill the appropriate fields and provide IFSC code of Bank Branch and Bank Account where PAN has been linked.
 The details will be cross-validated with the bank within a specified period and if confirmed by the bank then your Bank Account will be treated as validated and ready for ECS credit of any refund due.
Once the actions are completed, the bank account which is validated will be displayed to the taxpayer in the E-filing account. This service can be accessed by logging in to the Income Tax Department’s e-filing website by selecting the “pre-validate your bank account” option under the “profile setting” section.

Visit us at www.trutax.in

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