Income TAX Services
Income Tax Return or ITR represents an individual's
income and the taxes that are to be paid on that income
during the financial year starting on 1st April and ending
on 31st March. The ITR form which is submitted to the
Income Tax Department of India contains information about
various forms of income like:
- Income from Salary
- Income from House
Property
- Income from Business
or Profession
- Income from capital
gains
- Income from Other
Sources
The Income Tax Department has outlined 7 types of ITR
forms that need to be filled basis the nature and amount of
the tax payer's income:
ITR-1: Resident individuals
earning a total income upto Rs 50 lacs from Salary,
lotteries, races, one house property or agriculture, should
file this.
ITR-2: Individuals and HUFs who
do not qualify for ITR-1 (not generating profits from a
profession or business) should file for this.
ITR-3: Individuals and HUFs who
are earning profits from business or profession should file
for this
ITR-4: Resident individuals,
HUFs and firms (except LLPs) earning a total up to Rs 50
lacs and generating income from business or profession
calculated under sections 44AD, 44ADA and 44AE should file
for this.
ITR-5: LLPs, Body of
Individuals (BOI), Association of Persons (AOPs), Artificial
Juridical Person (AJP) Estate of Insolvent, Estate of
Deceased, Business Trust and Investment should file for
ITR-5 form.
ITR-6: A taxpayer registered as
a Company (in the ambit of Companies Act of 1956 or any
other law) and not seeking exemption under section 11 should
file for ITR-6.
ITR-7: A taxpayer registered as
a Company, Trust, AJP, AOP or a local authority can file for
this.
TDS On Purchase of a Property
TDS (Tax Deducted at Source) on Property is related
to the purchase of properties like a piece of land, a
building or just a part of a building. Section 194IA
decrees that the buyer of an immovable property needs to
deduct TDS at specified rate from the sale consideration
payable to the seller of the property. This tax is
applicable only when the value of property being purchased
is more than Rs. 50 lac. At present, the rate of deduction
is 1%.
Features of TDS on Purchase of a Property
- It is deducted from
the sale consideration by the buyer of the property
- After deduction the
buyer is obliged to deposit this to the Govt account
through a challan cum return Form 26QB.
- After the Form 26QB
is processed by the Income Tax Department, the buyer is
obliged to download Form 16B from Traces and issue the
same to the seller.
- Based on Form 16B, the
seller will be able to claim TDS on Property while filing
his tax return
- If the value of the
property being purchased is less than Rs. 50 Lakhs, no TDS
is required to be deducted
- If the transaction is
worth more than Rs. 50 lakhs, then TDS should be paid on
the entire amount and not just on the sum above Rs. 50
lakhs. For instance, if the property value is Rs. 75 lac
then TDS should be deducted on Rs 75 lac and not on 25 lac.
- Under section 194IA,
both the buyer and the seller should furnish their PANs
while filing Form 26QB
- If the payment is made
in installments, the TDS is required to be deducted from
each installment
- If the buyer fails to
obtain the seller's PAN, the TDS is to be be deducted at a
higher rate of 20%
Steps to File TDS on Property (Form 26QB)
Select "TDS on sale of property" to access the
applicable challan
- In order to fill the
form, provide details like buyer and seller's PAN, property
details, residential address of seller, contact detail of
buyer and seller, tax deposited and the entire amount
credited
- After filling up all
the details, submit the form
- You will receive a
confirmation and you can take the printout of the form if
you would like to
- In case, you want to
make the payment online, please proceed to the "Submit to
bank"" option and pay
- Once the payment is
done, the TDS Challan displays CIN, name of the bank
through which you have made the payment
What happens if you don't file TDS?
- Under Section 271H,
the penalty of not paying TDS on property can actually go
up to Rs 1 lakh
- Under section 201,
it's mandatory for you to pay an interest of 1% every month
if the tax has not been paid at all
- You have to pay 1.5%
interest if the tax has been deducted but not deposited
with the government
- If you have defaulted
on account of non/late filing of form 26QB, you will have
to pay a fee u/s 234E of the Act
- In case the property
seller has already paid capital gains tax, the fee for late
filing can be reduced or entirely waived
- The late filing fee
covered under Section 234E is Rs 200 each day, reliant on
the maximum amount of tax that's due
Secure Payments
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