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Practical Aspects of Tax Filing

Introduction to TDS (Tax Deducted at Source):

Tax Deducted at Source (TDS) is an important mechanism of tax collection under the Indian
Income-tax Act, 1961. It represents a system where tax is deducted by the payer at the very
point of generation of income and is remitted to the Central Government on behalf of the
recipient. The fundamental philosophy behind TDS is the principle of 'Pay as You Earn',
which ensures that tax liability is discharged progressively rather than as a lump sum at the end
of the financial year.

Concept of Tax Deducted at Source (TDS)

Under the TDS system, the responsibility of collecting tax is shifted from the recipient of
income to the payer, thereby ensuring efficiency, transparency, and regular flow of revenue to
the government.
Parties Involved in TDS

The TDS mechanism operates through the interaction of three primary parties:

1. Deductor (Payer)

The Deductor is the person or entity responsible for making a specified payment and deducting
tax at the prescribed rate before making such payment.

Key Features of the Deductor:

• May be an individual, company, firm, government body, or any other specified
entity.
• Obligated to deduct tax on payments such as:

o Salary

o Rent

o Interest
o Professional and technical fees

o Commission and brokerage

o Contract payments

• Must deposit the deducted tax with the Central Government within stipulated time
limits.

• Required to file periodic TDS returns and issue TDS certificates to the deductee.

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Legal Responsibility:
Failure to deduct or deposit TDS makes the deductor an assessee in default, attracting
interest, penalties, and prosecution under the Income-tax Act.

2. Deductee (Payee)

The Deductee is the person who receives income after deduction of tax at source.

Key Features of the Deductee:

• Receives the net income, i.e., gross income minus TDS.

• Gets credit of the TDS amount in their Permanent Account Number (PAN).

• Can claim the deducted tax as a credit or refund while filing the Income Tax Return
(ITR).
• May apply for lower or nil deduction of TDS by submitting:

o Form 15G / Form 15H, or

o Certificate under Section 197.

Significance for Deductee:

TDS ensures that the tax liability is discharged gradually and reduces the burden of paying a
lump sum tax at the end of the year.

3. Central Government

The Central Government is the ultimate authority that receives the tax deducted at source.
Role of the Central Government:

• Collects tax revenue in advance through the TDS mechanism.

• Maintains TDS records through digital systems such as:
o Form 26AS

o Annual Information Statement (AIS)

• Uses TDS as a tool to:

o Ensure regular revenue inflow

o Monitor taxable transactions

o Prevent tax evasion

o Strengthen tax administration

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The mechanism works as follows:

The deductor withholds a prescribed percentage of tax from the payment amount at the time of
payment or crediting the payee's account (whichever is earlier) and deposits this amount with
the Income Tax Department.

The deductee then receives a certificate (like Form 16/16A) for the deducted amount and can
claim credit for it against their total tax liability when filing their annual income tax return.
Payments covered by TDS scheme

Following payments are covered under TDS scheme

1. Salary (to resident/non-resident)

2. Payments other than salary to residents (interest, divident, rent, commission/brokerage,
lottery winnings, winning of races, Technical/ professional fees, royalty etc.)
3. Payment to non-resident/ Foreign companies.

Payments not covered under TDS

1) Under sec 196, tax is not deductible in respect of amount payable to the following: -
• Central Government or State Government.
• RBI
• A statuary corporation whose income is exempt from income tax
• A mutual trust
2) Under Sec 197A(1D) Tax is not deductible by off- shore banking unit from interest paid to
non-resident or not ordinarily resident.
3) Under Section 197A (1E)- No tax is deductible from any payment to any person for, or on
behalf of, the new pension system trust.
4) Under Section 197A(1F) Tax is not deductible from specified payment mentioned below to
a notified institution/ association

• Certain payments given by person to a bank

• Payments relating to software, if a few conditions given in notification no.21/2012,
dated June 13,2012 are satisfied.
• Any income given to investment trust which is exempt under section 10(23FBA)
• Payment of rent to Tirumala Tirupati Devasthanam, Tirupati, Andhra Pradesh
• Payments of nature specified in section 10(23DA) to securitisation trust.

Tax Deducted to be treated as income of deductee and available for tax credit (under
Section 198 and 199)

• Credit of TDS and paid to Central government, shall be given to the deductee for the
assessment year for which such income is assessable.

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• Where tax has been deducted at source and paid to Central government and the income is
assessable over no. of years, credit of TDS shall be allowed across those years in the same
proposition in which the income is assessable to tax.

• If income on which tax has been deducted is assessable in the hands of a person other than
the deductee, then tax credit will be given to such other person if.

TDS Rates
• Normal TDS rates are applicable if recipient provides with PAN details. But if recipient
doesn’t provide PAN details to the deductor then tax will be deducted at normal rates or 20%,
whichever is higher.

• Under section 94A (5), if payment of credit is made or given to a deductee who is located in
notified jurisdictional area, tax is deductible at the rates given in the provisions of the act or at
30%, whichever is higher.

Surcharge on TDS (FY 2019-20)

• Payment of salary to a resident or non- resident.

• Payment/ credit (other than salary) to a non- resident (other than company) (In both the cases
stated above surcharge will be applicable at below mentioned rates.)

• In case of Payment/ credit (other than salary) to foreign company below mentioned
rates of surcharge are applicable

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Health & Education Cess (FY 2025–26)

Health and Education Cess (HEC) continue to be levied at the rate of 4% on the amount of
income tax (including surcharge, wherever applicable) for the financial year 2025–26.

It is applicable on Tax Deducted at Source (TDS) from salary payments, whether the
recipient is a resident or a non-resident. The cess is also applicable on TDS from payments
other than salary when such payments are made or credited to a non-resident or a foreign
company. However, in the case of payments other than salary made to a resident, neither
surcharge nor Health and Education Cess is required to be added while deducting TDS. Thus,
the applicability of HEC depends on the nature of payment and the residential status of the
recipient.
Relevant provisions of TDS

The following table summarises the relevant provisions related to TDS

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*Section 197-Certificate for NO/ or Lower TDS-The recipient of the income may make an
application in Form 13 for no deduction or lower deduction of tax to AO. The AO shall give
him certificate for NO or deduction at lower rate as may be appropriate when satisfied that the
total income of the recipient justifies no or deduction at lower rate than the specified rates.
Thereupon, the payer of such income of the recipient shall deduct tax at the rates specified in
such certificate until such certificate is cancelled.

** Section 197A- Self Declaration for No TDS-The recipient of income may make self-
declaration in form 15G or 15H (for SC) for no deduction of tax if tax on his total income of
the PY will be NIL. This declaration is submitted by recipient to the payer (like in case of
Saving Bank holder to his Bank).

Note -1
While computing TDS liability, employer is required to consider:

• HRA exemptions (if employee is paying rent and provide supporting documents to his
employer)
• Any deduction available under sec 80 C, 80CCC, 80CCD, 80CCG,, 80D, 80DD,
80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80TTA, 80TTB, 80U. (if
informed by employee other than PPF, NPS contribution which employer already
know)
• Income other than salary (like –ve HP income, interest income)-though it is optional on
the part of employee, employee can state this income in his return at the time of filing
the return. However, employee having substantial –ve HP income can reduce his TDS
liability by stating these incomes to his employee.
In case employee is employed by two or more employer during the PY, tax shall be deducted
by all the employers. Employee is under obligation to declare salary received from previous
employer and TDS in form 12B.

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Note -2

Tax is deductible from accumulated lump sum payment (at the time of retirement or at the time
of leaving job) in case the employee has not rendered continuous service of 5 years and he does
not fall in any of the following cases-

(1) If the employee has rendered continuous service with his employer for 5 years.
(2) If the employee has been terminated because of certain reasons which are beyond his
control (like ill health, discontinuous of business, completion of projects etc)
(3) If employee has resigned before the completion of five years but he joins another
employer and transferred PPF account to new employee.
(4) If the entire amount in PPF account is invested in NPS.
Note -3

No tax is deductible from the amount of interest payable in the following case:

(1) Any Security of Central/ State govt. (except interest exceeding Rs. 10,000 on 8%
Saving(taxable) Bonds, 2003 or 7.5% Relief Bonds, 2018)
(2) Debentures issued by any co-operative society or any other institution/ authority/ a public
sector company notified by the central govt.

(3) Any debenture issues by a widely held company (a company in which the public is
substantially interested), to an individual or a HUF, who is resident in India, where the
aggregate of interest made by an account payee cheque and the amount (or aggregate amount)
does not exceed Rs. 5000.

(4) Any securities owned by the following or in which following have full interest: o LIC of
India o GIC of India o Any of the four companies formed by the virtue of scheme formed u/s
16(1) of The General Insurance Business (Nationalisation) Act, 1972 o Any other Insurer
(5) Any listed security in India issued by a company if it is in dematerialized form.

Note 4
No tax is deductible from the amount of dividend payable in the following case:

(1) Dividend is paid to an individual by an account payee cheque up to Rs. 2500 (in aggregate)
during the PY.

(2) Dividend is credited or paid to

• LIC of India
• GIC of India
• Any of the four companies formed by the virtue of scheme formed u/s 16(1) of The
General Insurance Business (Nationalisation) Act, 1972
• Any other Insurer

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Note 5

Tax is not deductible in the following cases (major cases):

(1) Interest is paid or credited to any banking company, co-operative bank, public financial
institutions, LIC, UTI, an insurance company, co0opertaive society carrying on the business of
insurance, or notified institutions.

(2) Interest is credited or paid by the firm to its partners.

(3) Interest is paid or credited by a co-operative society to its members or to any other
cooperative society.

(4) Interest is paid or credited in respect of deposits under the scheme of Post Office (time
deposit o recurring deposit or monthly deposit scheme), Kisan Vikas Patra, NSC VIII issue,
and Indira Vikas Patra.

(5) Interest is paid or credited in respect of deposits with a primary agricultural society. X`

(6) Interest is paid or credited by central govt. under different provisions of direct taxes (eg
interest on refund).

Significance of TDS
The Tax Deducted at Source (TDS) system ensures a regular and continuous flow of revenue
to the government throughout the financial year. It helps in preventing tax evasion by collecting
tax at the point of income generation, thereby reducing the possibility of income concealment.
TDS reduces the burden on taxpayers by spreading their tax liability over the year instead of
requiring a lump-sum payment. The system also widens the tax base by bringing various
transactions and taxpayers into the formal tax network. Overall, TDS improves tax compliance,
transparency, and efficiency in the Indian taxation system.
1. Ensures a Steady Revenue Stream for the Government
The TDS system ensures a continuous and regular inflow of revenue to the government
throughout the financial year. Instead of depending on a lump-sum tax collection at the
end of the year, taxes are collected at the time income is generated. This provides
financial stability to the government and helps in better budgeting and fiscal planning.
It also reduces the risk of revenue shortfalls due to delayed or non-payment of taxes.
2. Prevents Tax Evasion
The TDS mechanism helps in preventing tax evasion by ensuring that tax is deducted
at the source of income before it reaches the recipient. Since the deductor is required to
file quarterly TDS returns linked to the deductee’s PAN, a transparent and traceable
record of income is created. This enables tax authorities to track taxable transactions
effectively and reduces the possibility of concealment or under-reporting of income by
taxpayers.

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3. Eases Taxpayer Burden

The TDS system eases the tax burden on taxpayers by spreading their tax liability
evenly throughout the financial year. Since tax is deducted at the time income is earned,
taxpayers are not required to pay a large lump-sum amount at the end of the year. This
improves cash flow management and makes tax payment more convenient and
systematic.
4. Widens the Tax Base
The TDS system helps in widening the tax base by bringing a larger number of
transactions and individuals under the formal tax framework. Since tax is deducted at
the source on various types of payments, even those taxpayers who might otherwise
remain outside the tax system are identified. This increases tax compliance and expands
the overall reach of tax collection.
5. Facilitates Easy Reconciliation
The TDS system facilitates easy reconciliation of tax deducted by allowing taxpayers
to verify the deducted amounts through Form 26AS available on the income tax portal.
This statement provides a consolidated record of TDS credited against the taxpayer’s
PAN. It helps taxpayers match their income details with tax credits and ensures
accuracy while filing income tax returns.

Verifying Tax Credits: How to access and understand Form 26AS and the
Annual Information Statement (AIS).

Form 26AS and Annual Information Statement (AIS)

Form 26AS and the Annual Information Statement (AIS) are important tools for verifying tax
credits and ensuring accurate filing of Income Tax Returns (ITR) in India.

• Form 26AS primarily provides details of tax deducted or collected at source, advance
tax, and self-assessment tax paid by the taxpayer.

• The AIS is an extended version of Form 26AS and offers a more comprehensive view
of a taxpayer’s financial transactions, including interest income, dividend income,
securities transactions, and high-value purchases. Together, these statements enhance
transparency and help taxpayers reconcile income and tax credits, thereby reducing
errors and mismatches in ITR filing.

Accessing Form 26AS.

[Link]

Form 26AS and the Annual Information Statement (AIS) can be accessed through the official
Income Tax e-filing portal. The steps are as follows:
1. Log in to the portal at [Link] using your PAN/Aadhaar and
password.

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2. Navigate to the ‘e-File’ tab, select ‘Income Tax Returns’, and click on ‘View Form
26AS’.
3. Read the disclaimer and click ‘Confirm’ to be redirected to the TRACES (TDS-CPC)
portal.

4. On TRACES, agree to the usage terms and click ‘Proceed’.

5. Select ‘View Tax Credit (Form 26AS)’, choose the relevant Assessment Year, and
select View Type (HTML or PDF).

6. Click ‘View/Download’; the PDF is not password protected, making it easy to save
and reconcile tax credits.

These steps ensure taxpayers can verify TDS, tax payments, and other financial
transactions to reconcile and file accurate Income Tax Returns.

Accessing Form 26AS Through Net Banking

Many authorized banks provide a direct link to view Form 26AS via their net banking portals,
provided your PAN is linked to your bank account.

• To access, log in to your bank’s internet banking account.

• Navigate to the ‘Tax Credit Statement’ or similar option under the tax section and
follow the on-screen prompts to view or download your Form 26AS.
• This method offers a convenient and secure alternative to accessing TDS details
without visiting the Income Tax portal.

Accessing the Annual Information Statement (AIS)

[Link]

1. Log in to the Income Tax e-filing portal using your PAN/Aadhaar and password.

2. Navigate to the ‘Services’ menu and select ‘Annual Information Statement (AIS)’.

3. Click ‘Proceed’ to be redirected to the AIS portal, then click the AIS tile to view your
statement.

4. The information can be viewed online or downloaded in PDF, JSON, or Excel

formats.
5. Note that the AIS PDF is password-protected; the password is your PAN in
lowercase followed by your date of birth in DDMMYYYY format (e.g.,
abcde1234f25121990).

This allows taxpayers to access a comprehensive view of their financial transactions,

reconcile tax credits, and file accurate Income Tax Returns.

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Understanding and Verifying Tax Credits

• Form 26AS and the Annual Information Statement (AIS) serve as consolidated
records of a taxpayer’s financial transactions.
• They provide a clear view of taxes deducted at source (TDS), tax collected at source
(TCS), advance tax, and self-assessment tax paid.
• By comparing income reported in these statements with your own records, taxpayers
can verify that taxes deducted on their behalf have been deposited with the
government.
• Additionally, these statements help ensure that all sources of income such as salary,
interest, dividends, or capital gains are correctly reported.
• This verification process is crucial for accurate Income Tax Return (ITR) filing and
avoiding mismatches or notices from the tax authorities.

Form 26AS (Annual Tax Statement)

Form 26AS is an annual tax statement that primarily provides a summary of taxes related to
a taxpayer’s PAN.
• Parts A to D of Form 26AS contain details of Tax Deducted at Source (TDS), Tax
Collected at Source (TCS), advance tax, self-assessment tax, and tax refunds
received during the year.
• Parts E to H include information relating to Specified Financial Transactions (SFT)
and high-value transactions, such as purchase or sale of property and large
investments.
These parts also provide details of TDS defaults, if any, reported by deductors. Overall, form
26AS acts as a vital tool for reconciling tax credits and ensuring accurate Income Tax Return
(ITR) filing.
Annual Information Statement (AIS)
• The Annual Information Statement (AIS) provides a comprehensive view of a
taxpayer’s financial transactions, including those that may not involve TDS or TCS.
• It contains information on interest income from savings accounts and fixed deposits,
dividend income, securities transactions, foreign remittances, and rent receipts,
among others.
• AIS thus reflects the complete financial footprint of a taxpayer during a financial year.
A key component of AIS is the Taxpayer Information Summary (TIS), which
presents aggregated and summarized values of these transactions.
• The TIS is used by the Income Tax Department for pre-filling Income Tax Returns
(ITR), thereby improving accuracy and reducing errors.

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Common Income Tax Return (ITR) Forms:

ITR-1 (Sahaj) for salaried individuals

ITR-1, also known as Sahaj, is the most used and simplified Income Tax Return form in India.
It is applicable to resident individuals whose total income does not exceed ₹50 lakh during
the financial year. This form is mainly used by taxpayers earning income from salary or
pension, one house property, and income from other sources such as interest. ITR-1 is
designed to make tax filing easier for salaried taxpayers with simple income structures.

Eligibility for ITR-1 (Sahaj)

ITR-1 (Sahaj) is a simplified Income Tax Return form prescribed under the Income-tax Act,
1961, for resident individuals having a simple income structure. The form aims to facilitate
easy compliance for salaried taxpayers and pensioners.

1. Residential Status
Only resident individuals are eligible to file ITR-1. Non-Resident Indians (NRIs) and
Resident but Not Ordinarily Resident (RNOR) individuals are not permitted to use this
form. Residential status is determined as per Section 6 of the Income-tax Act.

2. Income Limit

The total income of the taxpayer should not exceed ₹50 lakh during the relevant financial
year. Total income refers to income computed under all heads after allowable deductions but
before tax.

3. Permissible Sources of Income

The taxpayer’s income must arise only from the following specified sources:

(a) Salary or Pension

Income from one or more employers in salary or pension is permitted. This includes
allowances, perquisites, and retirement benefits taxable under the head “Salaries”.

(b) One House Property

Income from only one house property is allowed. The property may be self-occupied or let
out. However, cases where losses are brought forward from previous years are not eligible.
Only current year loss, if any, is allowed.

(c) Income from Other Sources

This includes:

• Interest from savings accounts

• Interest from fixed deposits or recurring deposits

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• Interest from income tax refund

• Family pension
However, income such as winnings from lotteries, crossword puzzles, racehorses, betting,
or gambling is not allowed under ITR-1.

(d) Agricultural Income

Agricultural income is allowed only if it does not exceed ₹5,000. If agricultural income
exceeds this limit, the taxpayer must file another applicable ITR form.

(e) Long-Term Capital Gains under Section 112A

From Assessment Year 2025–26, taxpayers can report Long-Term Capital Gains (LTCG)
up to ₹1.25 lakh arising from the sale of equity shares or equity-oriented mutual funds on
which Securities Transaction Tax (STT) has been paid. This is allowed only if there are no
capital losses to be carried forward.

Who Cannot File ITR-1 (Sahaj)

ITR-1 (Sahaj) is a simplified return form meant only for resident individuals with limited and
straightforward sources of income. Certain categories of taxpayers are specifically excluded
from using this form to ensure accurate reporting of complex incomes.

1. Income Exceeding ₹50 Lakh

Individuals whose total income exceeds ₹50 lakh during the financial year are not eligible to
file ITR-1. Such taxpayers must use other applicable ITR forms.

2. More Than One House Property

Taxpayers earning income from more than one house property are not permitted to file ITR-
1, as the form allows reporting of income from only one house property.

3. Income from Business or Profession

Individuals having income from business or profession, including freelance or professional

income, cannot use ITR-1. They are required to file ITR-3 or ITR-4, as applicable.
4. Capital Gains Income

Taxpayers having capital gains income, whether short-term or long-term, are not eligible to
file ITR-1, except for limited Long-Term Capital Gains up to ₹1.25 lakh under Section
112A (from AY 2025–26) without any carry-forward losses.
5. Company-Related Involvement

Individuals who are Directors in a company or who have invested in unlisted equity shares
are excluded from filing ITR-1 due to additional disclosure requirements.

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6. Foreign Income or Assets

Persons having foreign assets, foreign bank accounts, or income from sources outside India
cannot file ITR-1 and must file a more detailed return.

7. Agricultural Income Exceeding ₹5,000

If agricultural income exceeds ₹5,000, the individual becomes ineligible to file ITR-1.

8. Residential Status
Non-Resident Indians (NRIs) and Resident but Not Ordinarily Resident (RNOR)
individuals are not allowed to file ITR-1. The form is strictly meant for resident individuals.

ITR-4 (Sugam) for small business owners.

ITR-4 (Sugam) is a simplified Income Tax Return form prescribed for resident individuals,
Hindu Undivided Families (HUFs), and partnership firms (excluding LLPs) whose total
income does not exceed ₹50 lakh during the financial year.
This form is applicable to taxpayers who have opted for the presumptive taxation scheme
under Sections 44AD, 44ADA, or 44AE of the Income-tax Act, 1961.

It allows eligible taxpayers to declare income on a presumptive basis, thereby reducing the
need for maintaining detailed books of accounts. ITR-4 is designed to simplify tax compliance
for small businesses and professionals.
Eligibility for ITR-4 (Sugam)

A taxpayer can file ITR-4 (Sugam) if they are a resident individual, Hindu Undivided
Family (HUF), or partnership firm (excluding LLPs) and their total income does not
exceed ₹50 lakh during the financial year.
The taxpayer must have income from business or profession computed on a presumptive
basis under Section 44AD (eligible business), Section 44ADA (specified professions), or
Section 44AE (business of plying, hiring, or leasing goods carriages).
Section 44AD – Presumptive Taxation for Eligible Businesses

• Section 44AD provides a presumptive taxation scheme for small businesses to

simplify tax compliance. It is applicable to resident individuals, HUFs, and
partnership firms (excluding LLPs) engaged in eligible businesses, excluding
professions and certain specified businesses.
• Under this section, income is presumed to be 8% of total turnover or gross receipts,
or 6% in respect of turnover received through digital modes.
• The scheme is applicable only if the turnover does not exceed ₹2 crore in a financial
year.
• Taxpayers opting for Section 44AD are not required to maintain detailed books of
accounts or get them audited. However, once the scheme is opted out, restrictions apply
for the next five years.

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Section 44ADA – Presumptive Taxation for Specified Professions

• Section 44ADA is designed for small professionals to reduce compliance burden. It

applies to resident individuals and partnership firms (excluding LLPs) engaged in
specified professions such as legal, medical, engineering, architectural, accountancy,
technical consultancy, interior decoration, and other notified professions.
• Under this section, 50% of the gross receipts is deemed to be taxable income. The
scheme is available only if the gross receipts do not exceed ₹75 lakh (subject to
conditions prescribed under the Income-tax Act).
• Professionals opting for Section 44ADA are exempt from maintaining detailed books
of accounts and audit requirements, provided they declare income at or above the
presumptive rate.

Section 44AE – Presumptive Taxation for Transport Business

• Section 44AE applies to taxpayers engaged in the business of plying, hiring, or leasing
goods carriages. It is applicable to individuals, HUFs, firms, and companies owning
not more than 10 goods vehicles at any time during the previous year.
• Income is calculated on a presumptive basis per vehicle per month (or part of a
month) of ownership.
• The taxpayer is not required to maintain detailed books of accounts if income is
declared as per the prescribed presumptive rates. This section simplifies taxation for
small transport operators.

In addition to presumptive business or professional income, the taxpayer may also have income
from salary or pension, one house property, and income from other sources such as interest.
However, income from capital gains, foreign assets, or other special categories of income
is not permitted under ITR-4.

Other Common ITR Forms

For individuals and other entities with different income profiles, other forms are applicable:

• ITR-2: For individuals and Hindu Undivided Families (HUFs) with income from
multiple house properties, capital gains (any amount/type beyond ITR-1's limit),
foreign assets/income, or income exceeding ₹50 lakh, but no business or professional
income.

• ITR-3: For individuals and HUFs with income from a proprietary business or
profession, F&O trading, or who are partners in a firm.

• ITR-5: For firms, LLPs, Association of Persons (AOPs), Body of Individuals (BOIs),
etc.

• ITR-6: For companies, except those claiming exemption under Section 11.

• ITR-7: For trusts, political parties, scientific research institutions, universities, and
other entities required to file returns under specific sections (139(4A) to 139(4F)).

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Step-by-Step E-filing of ITR: A practical walkthrough of the e-filing process

on the income tax portal.

Navigating Income Tax Portals:

[Link]
The official Income Tax e-filing portal ([Link]) is the primary platform for
taxpayers to manage their direct tax-related matters, including filing Income Tax Returns
(ITR). The portal has been redesigned to be more user-friendly, with many features to simplify
tax compliance.

Before you begin

Before starting, ensure you have the following ready:

• PAN and Aadhaar: Your Permanent Account Number (PAN) is your User ID for the
portal. Your Aadhaar number should be linked with your PAN.
• Bank Account: Your bank account should be pre-validated on the portal for quick
refunds.
• Required Documents: Gather all necessary financial documents, such as Form 16, bank
statements, investment proofs, and information on any other income.

How to navigate the portal

• Registration
• Visit the official Income Tax e-filing portal at [Link].
• Click the "Register" button on the top right of the homepage.
• Select "Taxpayer" as the user type and enter your PAN.
• Fill in all mandatory details, including your personal information, contact details, and
current address.
• Validate your details with the OTPs sent to your registered mobile number and email.
• Set a secure password and a personalized message.

Login

• Go to the homepage and click the "Login" button.

• Enter your User ID (PAN) and click "Continue".
• Verify the Secure Access message, enter your password, and click "Continue".
• You may be prompted for a second-factor authentication, such as an Aadhaar OTP,
depending on your security settings.

Dashboard

• After logging in, you'll see a personalized dashboard that provides a single-view
summary of your tax profile, including:
• Pending Actions: Any tasks requiring your attention.

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• Filed Returns: View previously filed returns and their status.

• Refund Status: Track the status of your income tax refunds.
• AIS and TIS: Access your Annual Information Statement (AIS) and Taxpayer
Information Summary (TIS), which detail your financial transactions.

Filing an Income Tax Return (ITR)

• Go to "e-File" > "Income Tax Returns" > "File Income Tax Return".
• Select the relevant Assessment Year.
• Choose "Online" as the mode of filing.
• Select your filing status (e.g., Individual, HUF).
• Choose the correct ITR Form based on your income sources. The portal often suggests
the appropriate form.
• The portal will display pre-filled data based on information received from various
sources like banks and employers. Review this information carefully.
• Enter details for any additional income, deductions, and exemptions.
• Preview your return and check for any validation errors.
• Submit the return and then complete the mandatory e-Verification process using
Aadhaar OTP, net banking, or other methods.

Other important services

• E-Pay Tax: Use this option to make tax payments for income tax, advance tax, or self-
assessment tax.
• View Form 26AS: Check your Tax Credit Statement to ensure all TDS and TCS entries
are accurately reflected.
• My Profile: Update your personal information, change your password, link your
Aadhaar, and pre-validate your bank account.
• Grievance and Services: Lodge grievances, submit responses to notices, and manage
other tax-related communications.

Introduction to GST Return Filing: An overview of the purpose and

structure of GSTR-1 and GSTR-3B.

GSTR-1 and GSTR-3B under GST

GSTR-1 and GSTR-3B are the two most important returns under the Indian Goods and
Services Tax (GST) system, as they together ensure proper reporting and payment of tax.
GSTR-1 is a detailed return containing invoice-wise information of outward supplies (sales)
made during a tax period, including B2B, B2C, exports, and credit/debit notes. The data
furnished in GSTR-1 is used to auto-populate the recipient’s GSTR-2A/2B, enabling them to
claim Input Tax Credit (ITC).

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On the other hand, GSTR-3B is a summary return in which the taxpayer declares the total
outward supplies, inward supplies liable to reverse charge, eligible ITC, and net tax
payable, and makes payment of GST. While GSTR-1 focuses on transaction-level reporting,
GSTR-3B ensures actual tax payment and compliance. Both returns are interconnected, as
inconsistencies between GSTR-1 and GSTR-3B may lead to notices, interest, or penalties
under GST law.
GSTR-1: Statement of Outward Supplies

GSTR-1 is a return that contains detailed, invoice-level information of outward supplies

(sales) made by a registered taxpayer during a tax period. The primary objective of GSTR-1 is
to ensure accurate reporting of taxable supplies, including B2B, B2C, exports, and credit or
debit notes. This detailed disclosure enables the GST authorities to monitor transactions
effectively and ensures transparency in the GST system. Additionally, the information
furnished in GSTR-1 is auto-populated in the recipient’s GSTR-2A and GSTR-2B, allowing
them to claim eligible Input Tax Credit (ITC). Thus, GSTR-1 plays a crucial role in
maintaining the seamless flow of ITC under GST.
Structure and Details:

• Detailed Information: GSTR-1 requires invoice-wise details of all sales, including

Business-to-Business (B2B) and large Business-to-Consumer (B2CL) transactions
(inter-state with invoice value over ₹2.5 lakh).

• Key Sections: It includes tables for details of exports, debit and credit notes,
exempted/nil-rated supplies, advances received and adjusted, and a summary of
supplies categorized by Harmonized System of Nomenclature (HSN) codes.

• No Tax Payment: GSTR-1 is a reporting-only return, and no tax payment is made at

the time of filing.
• Filing Frequency: It can be filed monthly or quarterly depending on the taxpayer's
aggregate annual turnover.

GSTR-3B: Summary and Tax Payment Return

GSTR-3B is a self-declared, simplified summary return introduced under GST to enable

taxpayers to report their consolidated tax liabilities for a specific tax period and make actual
payment of GST. It provides a summary of total outward supplies (sales), inward supplies
liable to reverse charge, eligible Input Tax Credit (ITC), and the net tax payable. Unlike
GSTR-1, GSTR-3B does not require invoice-wise details but focuses on aggregate figures.
Filing GSTR-3B is mandatory for tax payment, and timely filing helps avoid interest, late
fees, and penalties under the GST law.

Structure and Details:

• Summary Information: Unlike GSTR-1, GSTR-3B does not require invoice-level

details. It requires consolidated figures of outward supplies, inward supplies liable to
reverse charge, and eligible Input Tax Credit (ITC).

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• Key Sections: It has sections to report the total taxable value and tax amounts (IGST,
CGST, SGST, Cess), details of inter-state supplies to unregistered persons, eligible ITC
claims and reversals, and details of interest or late fees if applicable.

• Tax Payment: The net tax liability (output tax minus ITC) must be paid before or while
filing GSTR-3B.

• Filing Frequency: It is generally filed monthly by all regular taxpayers, with an option
for quarterly filing under the QRMP (Quarterly Return Monthly Payment) scheme for
eligible small taxpayers (turnover up to ₹5 crore).

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