TDS (Tax Deduction at Source) could be part of Income in turn income tax that is already paid by the assessee whether an assessee is eligible for the income tax or not whereas an income tax is a tax that government imposes on financial income generated by any individual or firm which is a key source of capital that the government uses to fund its activities and serve the public.

There is some difference in computation part, i.e. TDS is deducted before the income reaches to any individual or entity which then after can be calculated and if over taxed then it can be refunded.

The Central Board of Direct Taxes (CBDT) regulates the policy and planning of taxes. CBDT is also responsible for administering the direct tax laws through the IT (Income Tax) Department. In addition to the collection of taxes, the IT department is also involved in prevention and detection of tax avoidance.

What is Income Tax?

The Income Tax Act, 1961 regulates the collection, recovery, and administration of income tax in India. It is a compulsory contribution levied on individual’s personal income as per his/her earning which is divided into different slab percentage according to which the money gets deducted after all the exemptions from your gross income.

Income Tax is paid on the annual income where taxes are computed for a particular financial year.

What is Tax Deducted at Source (TDS)?

TDS is a part of income in turn Income-tax that is already paid by the deductee whether a deductee is eligible for the income tax or not which can be set off against Income tax and balance tax liability to be paid. Necessary adjustments of TDS are done while filing Income Tax return and in case any excess amount is deducted or over taxed then that can be claimed to refund.

TDS aims to collect tax from the very source of income. A person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount which deducted on the basis of Form 26AS or TDS certificate issued by the deductor.

TDS can be deducted from Income from salary, income from any commission, professional fee, interest from FD and many other income sources etc. so tax deduction at the point of generation of income is known as Tax Deducted at Source or TDS and the same is deposited to the Income Tax department of the concerned area. It is deducted at source on a periodic basis say quarterly in the particular year for the salaried individuals and for others it is deducted on each set of incomes and then can be claimed.

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CBDT (Central Board of Direct Taxes) has introduced new income tax return forms (ITR forms) for the assessment year 2018-19 which seek more details from individual taxpayers about their salary structure, break ups and income from property.

It has also made mandatory for small businesses to report their goods and services tax identification number (GSTIN) and turnover reported under GST.

The new ITR forms require salaried taxpayers to disclose their salary break-up. Taxpayers will have to give details about allowances that are not exempt, value of perquisites, profit in lieu of salary and deductions claimed under Section 16. Typically, these are available in the Form 16 issued by the employer but do not have to be disclosed in the tax return.

Like last year, the one-page ITR-1, or Sahaj, form can be filled by salaried taxpayers having an income up to Rs. 50 lakh and one house property. Last year, 30 million taxpayers filled this form, the tax department said in a statement.

Businesses with a turnover of less than Rs. 2 crore can do away with the requirement of maintaining books of accounts and instead pay a tax on the basis of a certain percentage of their turnover. However, the government fears that there has been misuse of the scheme.

The forms give non-resident Indians (NRIs) some relief. They can now provide details of their foreign bank accounts to claim credit or refunds. Earlier, they could only provide details of bank accounts held in India.

However, NRIs will no longer be able to file returns using the simple income tax return (ITR)-1 form, which can now only be used by residents. NRIs will have to use ITR-2, which seeks more information.

Types of ITR forms

• ITR-1 SAHAJ– For individuals being a resident other than not ordinarily resident having Income from Salaries, one house property, other sources (Interest etc.) and having total income up to Rs.50 lakh
• ITR-2– For Individuals and HUFs not having income from profits and gains of business or profession
• ITR-3– For individuals and HUFs having income from profits and gains of business or profession
• ITR-4-Sugam– For Presumptive Income from Business & Profession
• ITR-5– For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7
• ITR-6– For Companies other than companies claiming exemption under section 11
• ITR-7– For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)

The new ITRs have been uploaded on the official website of the department–incometaxindia[dot]gov[dot]in.

The last date for filing the ITRs is July 31.

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Income tax is a tax that governments levy on the financial income generated by the different establishments in their jurisdiction. The funds thus obtained are used to finance its various functions. There are two types of taxes-Direct and Indirect. Income tax is a direct tax and other taxes like VAT, Service tax, Goods and Service tax are indirect taxes.

Taxes provide financial stability that is helpful in even distribution of wealth among the people of the country. Taxes play an important part in withstanding the upheavals of the economic cycles. The guidelines for the payment of income tax are based on the guidelines of the Income Tax Act.

As per this act, income from these sources can be taxed-

• Salaries
• Capital gains
• Income from house/property
• Profits from profession or business
• Income from other sources

Sum of income from all these sources is estimated as per the Income Tax Act. The tax rates are based on the earnings of a person and are termed as Income Tax Slabs. The Income Tax rates are revised every year during the budget.
Income tax is calculated yearly. Financial year begins on the 1st of April in a given year and ends on the 31st March the following year. Tax is imposed on the income earned in the previous year which is called as Assessment year.

The income tax deadlines for the financial years are-

• 31st July- The last date of filing returns for non-audit cases
• 30th September –The last date of filing returns for audit cases.

Filing of Income Tax for Salaried Persons

People earning income can file the income tax returns as per Form 16. The details of income are mentioned in Form 16 issued by their employers.

Income Tax Returns (ITR)

Tax Returns are a statement of earnings from different sources of income and these include tax liability, details of tax paid and other refunds that they should get from the government.

Late Filing of Income Tax Return

Income Tax Returns should be filed before the deadline to avoid the penalty for non-filing of tax returns.

The clause ‘losing relief in case return not filed within due date’, was apparently not completely and clearly understood by the people and they concluded that complete Chapter VI A deduction is covered. The general public seems to have understood that deduction u/s 80C (payment of School Fee/LIC/PPF), 80G (Donations), 80D Mediclaim, 80TTB & 80TTA (interest from the bank) will no longer be allowed if the filing of the Income Tax Return is done after the due date. This is not true as only Part C of Chapter VIA is included in the budget proposal.

There are chances of loss of relief in case of some incomes mentioned in Part C and this is when the ITR is filed after the due date. The relief permitted under the other four parts will remain undisturbed by the proposed amendment. The Chapter VIA of the Income Tax Act 1961 covers the “Deductions to be made in Computation of Total Income”.

There are five parts to this chapter.

• • Part A is General and covers Sections 80A, 80 AB, 80AC, and 80B.
  • Part B covers deductions in respect of some payments (containing Sections 80C to 80GGC)
  • Part C includes deductions in respect of some incomes (this includes Sections 80H to 80TT)
  • Part CA covers deductions with respect to other incomes (covering Sections 80TTA and projected 80TTB)
  • Part D includes other deductions (covering Sections 80U).

Payments of Life Insurance Premiums, investing in school fee, provident fund, health insurance, medical treatment, preventive health check-up, interest for loans taken for house property/education, charity given to some institutions, rent paid, and political parties etc. are included in Part B of Chapter VIA and will remain unaffected by the proposed amendment. This amendment will not affect the deductions of Bank interest u/s 80TTA and proposed 80TTB and person with disability u/s 80U will remain unaffected by this amendment.

As per this proposed amendment, the people who are eligible to claim deductions covered in these sections only will not get deductions under Part C of Chapter VIA if their IT return is filed after the due date. This includes Section -80-IAC, Section 80-IBA, Section -80JJA, Section 80LA, Section 80P, Section 80 QQB, Section 80 RRB.

The following sections under Part C of the chapter VIA have been in force under section 80A I case of filing IT Return after the due date. These are Section 80IA, Section -80-IAB, Section 80-IB, Section -80-IC, Section-80-ID, and Section-80-IE.

A study of Part C shows that even though this part had 41 sections only 14 are applicable in the present context. Thus the general public should not feel anxious about losing the deductions available to them under Part B, CA and D even if they file the Income Tax Returns after the due date but prior to the relevant Assessment year or before completion of the assessment whichever takes place earlier.

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