In this article, we will learn about the different modes required to file Income Tax Returns and the surcharge rates applicable to them.
Income tax is a direct tax levied by the government on the earnings of its citizens. The Income Tax Act of 1961 requires the central government to collect this tax. Every year, the government can regulate the income levels and tax rates in its Budget Speech.
Earnings do not only refer to monetary compensation. It also includes income from real estate, business profits, professional gains (such as bonuses), capital gains income, and ‘income from other sources.’ The government also frequently allows for various deductions from an individual’s income before calculating the tax to be levied.
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The Advantages of ITR Filing on Time
- Carrying over unabsorbed losses to future years: Filing ITR within the due dates allows one to carry forward current-year losses to the following fiscal year.
- Avoid liability of interest: To file an ITR, all applicable taxes must be paid in full. Filing ITR after the due date results in an additional customs duty interest rate of 1% per month or part of a month during the period of delay under Section 234A of the Act on the leftover tax owed. It is best to pay taxes and file the ITR within the deadlines.
- Avoid Section 234F penalties and late filing fees: Late charges of up to Rs.10,000 may be levied if an ITR is filed after the deadline. It is in addition to any other penalties imposed by the Act.
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Different modes of filing returns of income
There are numerous ways to file an income tax return. The mode is determined by the needs of the person filing. If the income return is simple, i.e., the person has only one or two sources of income, the person can file the return without the assistance of professionals such as a Tax Advocate or Chartered Accountant. Depending on the circumstances, the individual can file the return through the traditional paper method or online. The various modes are as follows:
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Filing Return on Income by Yourself
The returns can be filed directly. There are two options: online or physically/on paper. Moreover, an offline filing is only possible if the income is less than Rs.5 lakhs and no refund is claimed. Furthermore, no income should be situated in foreign countries in order to file returns offline. The application forms can be completed and submitted to the relevant jurisdiction’s Income Tax office. Upon submission, the person filing the return should collect a numbered and duly stamped acknowledgment slip. When it comes to online submissions, there are two options: completely online and partially online. This will be covered in greater detail later. This method of filing returns is appropriate for individuals.
The ITR 5 income tax (ITR) form is used to calculate a person’s income tax. It is a statement that shows a person’s status, all sources of income, deductions, and, finally, the tax payable or tax refund, if any.
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Preparers of Tax Return
The government appoints tax return preparers through a scheme. Tax return preparers are appointed to assist people who struggle to understand the complexities of the forms/documents/papers. Using the website www.trpscheme.com, you can find a tax return preparer in any area. A tax return preparer can be found after submitting the necessary information on this website. Tax return preparers charge fees for filing returns. When filing the return through a tax return preparer, check the return preparer’s details such as the id number, title, and countersign on the form.
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Chartered Accountant
A CA is not required in cases where the income sources are simple and restricted to one or two. However, in complex cases involving tax audits, alternative sources, write-offs, and so on, consulting a Chartered Accountant is required. The CA charges a fee for this service. It is recommended that you check the CA’s credentials.
Returns can also be submitted using one of two platforms. There are two numerous sites for use: online and offline. Although some mobile phone apps for filing returns have been developed, they have very limited usage and are thus unimportant. The most common and appropriate method of filing the return is through the official website: https://incometaxindia.gov.in/Pages/tax-services/file-income-tax-return.aspx
Filing returns online can be done in two different ways: completely online or partially online. Following the creation of an ID, the person must log in to the website with a user ID and password. After logging in, the user must select the appropriate form and fill out the required information.
The person must download the relevant ITR from in the partially online method. The form must then be completed, and a file must be generated. The individual must then log into the website, upload the completed form, and NRI tax filing India
The traditional method of filing a return is offline. The relevant form must be filled out by hand; all documents must be attached, and the form must then be physically submitted to the IT department’s office. This method requires a significant amount of time and effort. The mode of filing the return is entirely dependent on the individual’s preferences.
What are the Surcharge Rates Applicable to Income Tax?
| Taxpayer | Income limit | Rate of Surcharge |
| Individual/BOI/AOP/HUF/Artificial Judicial Person | Net income is more than Rs.50 lakhs but less than Rs.1 crore. | 10% |
| Individual/BOI/AOP/HUF/Artificial Judicial Person | Net income is more than Rs.1 crore but falls short of Rs.2 crores. | 15% |
| Individual/BOI/AOP/HUF/Artificial Judicial Person | Net income is more than Rs.2 crores but falls short of Rs 5 crores. | 25%* |
| Individual/BOI/AOP/HUF/Artificial Judicial Person | Net income is more than Rs.5 crores. | 37%* |
| Local authorities/Co-operative Society/Firm/LLP | Net income is more than Rs.1 crore. | 12% |
| Domestic Company | Net income is more than Rs.1 crore but doesn’t exceed Rs.10 crores. | 7% |
| Domestic Company | Net income is more than Rs.10 crores. | 12% |
| Foreign Company | Net income is more than Rs.1 crore but doesn’t exceed Rs. 10 crores. | 2% |
| Foreign Company | Net income is more than Rs.10 crores. | 5% |
Conclusion
In this article, we have in detail discussed the advantages of filing an income tax on time and the different modes of filing an income tax. Also, we have discussed the surcharged rates on income taxes under different slabs.
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