TAXATION in INDIA

  India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the Urban/Rural Local Bodies. The power to levy taxes and duties is distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are Income Tax (except tax on agricultural income, which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc.

Since 1991 tax system in India has under gone a radical change, in line with liberal economic policy and WTO commitments of the country. Some of the changes are:

Reduction in customs and excise duties Lowering corporate Tax Widening of the tax base and toning up the tax administration

Direct Taxes

Corporate Income Tax

For domestic companies, this is levied @ 35% plus surcharge of 5%, where as for a foreign company (including branch/project offices), it is @ 40% plus surcharge of 5%. An Indian registered company, which is a subsidiary of a foreign company, is also considered an Indian company for this purpose. 

 The above rates are general and in respect of the countries with which India does not have a Double Taxation Avoidance Agreement (DTAA).

Double Taxation Relief:

India has entered into DTAA with 65 countries including countries like U.S.A., U.K., Japan, France, Germany, etc. These agreements provides for relief from the double taxation in respect of incomes by providing exemption and also by

providing credits for taxes paid in one of the countries. These treaties are based on the general principles laid down in the model draft of the Organisation for Economic Cooperation and Development (OECD) with suitable modifications as agreed to by the other contracting

Sales Tax

Central Sales Tax (CST)

CST is 4% on manufactured goods.

Local Sales Tax (LST)

Where a sale takes place within a state, LST would be levied. Such a tax would be governed by the relevant state tax legislation. This is normally up to 15%.

Excise Duty

Excise duty on most commodities ranges between 0 to 16%. Only on seven items duty is imposed at 32%, viz., motor cars, tyres, aerated soft drinks, air conditioners, polyesters filament yarn, pan masala and chewing tobacco. Duty is charged at 30% on petrol with additional excise duty at Rs. 7 per litre. The said rates are subject to exemptions and deductions thereon as may be notified from time to time. Central VAT (CENVAT) is applicable to practically all manufactured goods, so as to avoid cascading effect on duty.

Small Scale Sector is exempted from payment of excise duty from annual production upto Rs.10 million.

Customs Duty

The rates of basic duties vary from 0 to 30%.

Salient features are:

o Peak customs duty reduced from 220% (in 1991) to 30% (in 2002).o The general project import duty (for new projects and substantial

expansion of existing projects) reduced from 85% to 25%.o Import duty under EPCG Scheme is 5%.o R&D imports - 5% customs duty.

o Export made with imported inputs get concessions in form of duty drawback, duty entitlement pass book scheme and advance licence.

o Many type of industries such as 100% EOU and units in free trade zone get facility of zero import duty.

o An Authority for Advance Ruling for foreign investor

Tax reforms started being introduced in the later part of the 1980's in India. India started implementing tax reforms post liberalization mainly in the early 1990's.The tax reforms that were introduced in Indian were very different from that of the other countries. Tax reforms in India were made only by the citizens of the nation and without any sort of external interference.

There are different types of taxes in India. The various types of taxes in India fall under the broad category of direct and indirect taxes.

The system of taxation in India is clearly vested in the hands of authorities such as the Central government, State government and the local governments. The taxes that are levied by the Central government are on personal income, central excise, customs duties and service tax.

The taxes charged by the State government include; stamp duty, Value Added Tax (VAT), sales tax in states where there is no VAT, state excise, tax on professions and land revenue.

Also the Local governing bodies levy taxes such as tax on property and water supply and drainage etc.

Over the last one decade or so the system of taxation in India has undergone significant reforms. The tax rates are continuously revised and modified. Every year there are some or the other reforms made in the annual budget. The tax slabs are generally modified keeping in mind factors like recession and other economic downturns. There are separate and different tax slabs for men, women and senior citizens. The tax slabs are generally higher for women and senior citizens.

Some of the major types of taxes in India that came into existence are;

Business Profits Tax came into existence in 1947 Capital Gains came into existence in1948

Estate Duty came into existence in 1953 Wealth Tax came into existence in 1957 Expenditure Tax came into existence in 1957 Gift Tax came into existence in 1958

Tax System in India

The system of taxation is divided between the central and state government in India. Taxes like income tax, custom duties, central excise and service tax are levied by the central government and on the other hand taxes like state excise, stamp duty, VAT (Value Added Tax), land revenue and professional tax are levied by the state government in India.

The taxes levied by the central government are known as direct taxes while the taxes levied by the state government are termed as Indirect taxes. Indirect taxes are applicable on goods and services. In case of indirect taxes customers pay taxes by paying higher prices. Indirect taxes actually increase the price of a particular product for which the customers eventually pays a higher price. Some of the principle indirect taxes are sales tax, stamp duties, VAT (Value Added Tax), excise duty and expenditure tax.

Direct Taxes in India

Wealth taxWealth tax is one of the major direct taxes in India. It is also known as the wealth Tax Act, 1957. This tax is applicable to all the citizens of India. Wealth tax is the cess levied on owned property. It applies to those who enjoy property ownership benefits. It is applicable to every property owner till he or she retains the ownership of that particular property. The tax paid property depends entirely on the current market rate. Incase the property is not generating any income then also wealth tax has to be paid.

Corporate Income TaxThis is another kind of direct tax in India. Corporate income tax is levied in many different forms in India. Corporate Income Tax is primarily meant to be paid by

domestic corporations. Domestic corporations in India pay a minimum income tax rate of 35 percent along with a surcharge of 2.5 percent. Corporate income tax is also applicable to foreign organizations that have their own economic bases working in the country. These types of corporations are required to pay tax on 40 percent of their income along with a surcharge of 2 percent. This surcharge goes as a reservation for funding the state's education. Lastly, corporate income tax is also applicable to all the people that are working for any corporation in or outside India.

Personal Income TaxThis is the most common form of tax in India. The system of personal income tax in India is very similar to the taxation system in the United States of America. This tax is based on the personal income of an individual. If the annual income of an individual is under Rs 180,000 then he or she is exempted from paying any personal tax. There are further allowances made under the personal income tax domain for the physically handicapped and elderly.

Indirect Taxes in India:-

Sales TaxSales Tax is the tax levied by the state government on goods bought and sold in the country. This policy is followed in most industrially developed countries in the world. The taxes levied under sales tax are not the same for all kinds of goods. The sales tax applicable on precious stones is 1 percent, 4 percent on goods of mass consumption like computers, cell phones, laptops, music systems, i pods, shoes, clothes etc. 12.5 percent sales tax is levied on uncategorized items and necessary items like food are not taxed. There are other items like tobacco, petroleum, and liquor that are taxable but the percentage of tax levied generally varies according to the region.

Custom DutiesCustom duties were introduced in India through the Customs Act in 1962. This duty was introduced with the aim of checking illegal exports and imports of goods. Taxes would be charged for all the good that were imported into the country mainly to protect the industries in Indian.

By Flat Tax or Flat Rate Tax it is indicated that the taxes on household income and corporate profits are fixed at a constant rate. Generally household income below a statutorily fixed level on the basis of the type and size of the household, are exempted from paying Flat Taxes.

This type of Flat Taxes is not a proper Flat Tax as there is a discrepancy between the taxable income and the total income. Taxation on consumption can also be labeled as a Flat Tax. In the advanced economies, a tax is payable on the incomes of the households and corporate profits, as a result of which Flat Tax is not very common in these nations. The United States have initiated a quick move to reform its tax system as under the present condition of competition in the global economy the jobs and capital flow to with the initiation of better tax law. The nine countries of the former Soviet Bloc have taken up versions of the Flat Tax, which has been yielding excellent results for the growth and development of the respective economies.

Transfer Tax in other words implies the tax imposed on the handing over of the title of property ownership by one person to another. It incorporates a legal transaction fee, which is involved with the title to property being transferred from one to another. This tax is not very common form of taxation and is imposed where the registration of the transfer involves a legal requirement. Such are generally found to be associated with transfers of real estate, shares, or bond. Although Stamp Duty and the Real Estate Transfer Tax are examples of the Transfer Tax, it should be noted that the fees paid to the notaries during any legal jurisdictions are not treated as transfer tax.

Types of Transfer Taxes:

There are different types of Transfer Tax that involves a certain payment on the transfer of the title of the property, like -

Estate tax Gift tax Capital gains tax Sales tax on goods excluding the sales tax payment on services Certain use taxes

Poll Tax is a fixed amount tax that should be paid by every individual. Although this uniform tax was important in the ancient times but gradually it is losing its importance. In history, Poll Tax is quite important and there are several famous examples of poll taxes. For instance, this tax was

imposed for plebiscite in different parts of the United States. It is from this incident that the Poll Tax came to be used as a tax of fixed amount payable by all for voting purposes. The Poll Tax is different from the income tax as while the latter will be different from person to person depending on each person's income, the former is of a fixed and uniform amount, same for every person, irrespective of any discriminatory parameters.

Payroll tax is one of the important concepts in taxation. Payroll tax comprises of 2 types of taxes. The Payroll tax may follow a fixed rate format or the rate may be directly proportional to the income or wage of the employee.

he incentive scheme under the Payroll Tax was introduced in order to aid the growth of the business sector which in turn would provide to the factor of employment. The incentive scheme under the Payroll Tax facilitate the provision of rebate on the payroll tax which is paid by the employer for his employees

Dividend Tax is type of an income tax which is levied on the payments made as the dividend to the shareholders of the company paying the tax. Dividends are the shares of the profit of the company which are the given to the shareholders.

Self-employment tax (SET) is a type of a taxation pertaining to the social security tax and the medicare tax for the individuals those who are self employed, i.e., the people engaged in business or commercial activity of some kind which is legally approved by the Governmental authorities.

The concept of self-employment tax is more or less similar to the social security tax and the medicare tax which is withhold from the monthly income of the professionals engaged in any kind of services under the private or the public sector. The employers of most of the working professionals calculate the social security tax and the medicare tax of the concerned person.

The Deposit Interest Retention Tax or DIRT is a type of a tax which is imposed on the interest earned on bank account and it is applicable in the Republic of Ireland.

The Deposit Interest Retention Tax was introduced in the year 1980. The income in the Republic of Ireland which may be from any source is applicable for taxation. The major problem was that a big part of the people were not disclosing their proper income and evading tax. The Department of Taxation under the government of the Republic of Ireland introduced new reforms which mentioned the deduction of tax at the source of the income. With the introduction of the concept of pay as you earn, the Republic of Ireland went through its first tax withholding. The

concept was accused of being controversial because the tax was deducted at the source. The concept was also accused of discouraging savings in the families falling in the low income group as they do not fall under the category of taxation but because of the Deposit Interest Retention Tax even they have to pay tax.

Estate Tax, also referred as Death tax or Inheritance Tax, is gaining prominence with the boom in the real estate market across the world. The Estate Tax rates vary widely across countries all over the world.

It is recorded that Japan stands at the top offering a tax rate of 70%, followed by South Korea (50%), the US (46%), and 40% for France and UK each. Along with India, there are some other countries like China, Australia, Russia, and Malaysia, which do not levy Estate tax. It should be noted that Estate Tax or Estate Duty which was earlier incorporated in India in the year 1953, was taken away under the aegis of the then Finance Minister, V.P. Singh in the year 1985. The economic growth and flourishing capital markets in India have been generating an unprecedented boost for the Indian promoters. Still not like the other advanced market economies of the world, there is no Estate Tax in India. On the other hand, across the globe the Estate Tax, also known as the Death Tax, is very important.

http://finance.mapsofworld.com/finance/taxation/

Bringing some cheer to the industry, Finance Minister Pranab Mukherjee today lowered the surcharge tax limit on corporate tax to 5% from 7.5% even while marginally raising the Minimum Alternate Tax.

The government retained the corporate tax at 30%, to be paid by domestic firms earning total income of over Rs 1 crore a year.

It increased the Minimum Alternate Tax (MAT) to 18.5% from 18% on book profits.

Presenting the Budget for 2011-12, Finance Minister Pranab Mukherjee said: "My initiative of phasing out the surcharge continues. I propose to reduce the current surcharge of 7.5% on domestic companies to 5%."

The minister also proposed to bring developers in Special Economic Zones (SEZs) under the MAT.

"By the measure to ensure equal sharing of corporate tax liability, I propose to levy MAT on developers of the Special Economic Zones as well as units operating in the states," Mukherjee said.

The reduction in surcharge will bring some cheer to industry which has been clamouring for a reduction in corporate tax rate to 25%.

Industry chambers have been demanding reduction in corporate tax to 25% to spare the India Inc with more money to undertake big-ticket investments.

CESS is an education tax in India.

Surcharge is charged when the taxable income crossesRs.10,00,000/- after taking into a/c all deductions. Surcharge will be charged on tax payable.

Indian Income Tax deductions, Tax exemption limits

Financial year 2008/2009 (will be updated later for 2009/2010)

Income Tax DeductionsExplaination

Maximum deduction allowedRemarks

Income Tax deduction - Section 80C Provident Funds, Life Insurance premia,

ELSS, Bank deposits (>5 yr.), tution fees, principal part of EMI on housing loan, etc.

Maximum tax deductionor tax exemption limit:

Rs. 1,00,000

Income Tax deduction - Section 80DPremium in health insurance of you, your

spouse, children or dependent parents

Maximum tax deduction ortax exemption limit:

Rs. 15000(tax exemption limitfor senior citizen is

Rs. 20000)

Income Tax deduction - Section 80DD

Maximum tax deductionor tax exemption limit:

Medical treatment (including insurance) of disabled dependent

Rs. 50000.(Rs. 75000 if disability is severe,

e.g. >80%)

Income Tax deduction - Section 80EInterest paid on educational loan taken for higher education of you, your spouse or

children.

Maximum tax deductionor tax exemption limit:

no limit !

Income Tax deduction - Section 80GGHouse rent in excess of 10% of income, if no

HRA is received.

Maximum tax deductionor tax exemption limit:

Rs. 2000 per month or 25% of your gross salary, whichever less.

Income Tax deduction - Section 24Interest paid on housing loan.

Maximum tax deductionor tax exemption limit:

Rs. 1,50,000

Income Tax deduction - Section 80GDonations

Maximum tax deductionor tax exemption limit:

100% of donation amount for special funds(see below), 50% of donation amount

for all other donations.

Indian Income Tax deduction - Section 80C (official page India Income Tax Act)Section 80C of Indian Income Tax Act is the most popular because it is directly related to tax deductions for your monthly savings or life insurance. In financial years 2008/2009 and also in 2009/2010 the maximum income tax deduction allowed under section 80C is 1,00,000. The following is a list of important ways in which a taxpayer can get benefit of section 80C of Indian Income Tax Act.

1. Provident Fund (PF): Any contributions to Provident Fund, Voluntary provident Fund (VPF) or savings made in Public Provident Fund (PPF Account) are eligible for income tax deduction under section 80C of Indian Income Tax Act.

2. Life Insurance Premiums: Any Life Insurance premiums (for one or more insurance policies) paid by you for yourself, your spouse or your children is eligible under income tax deduction under section 80C of Indian Income Tax Act.

3. ELSS Equity Linked Saving Schemes: Any investment made in certain Mutual Funds called equity linked saving schemes qualifies for section 80C deduction. Please note that

not all mutual fund investments are eligible for this deduction. Some examples of ELSS funds are: SBI Magnum Tax Gain, HDFC Tax Saver, HDFC Long term advantage, etc.

4. ULIP (Unit Linked Insurance Plan): Investments made in certain ULIPs of Unit Trust of India and LIC of India are eligible for 80C deduction.

5. Bank Fixed deposits or Term deposits of >5 years: According to a relatively new provision amount saved in fixed deposits of term at least five years is eligible for income tax deduction under section 80C of Indian Income Tax Act.

6. Principal part of EMI on Housing Loan: If you are paying EMI on a housing loan, note that the EMI (equated monthly installments) consists of two parts - principal part and interest part. The principal part of the EMI on your housing loan is eligible for income tax deduction under section 80C. Note that the interest part is also eligible for tax deduction, however not under section 80C but section 24. (read below). If you do not own a house but pay rent for it, see section 80GG of Indian Income Tax Act below.

7. Tution Fees: Amount paid as tution fee for the education of two children of the assessee is eligible for deduction under section 80C of Indian Income Tax Act.

8. Other 80C deductions: Amount saved in National Saving Certificate (NSC), Infrastructure Bonds or Infra Bonds, amount paid as stamp duty and registration charges while buying a new home are eligible for income tax deductions under section 80C of Indian Income Tax Act.

Indian Income Tax deduction - Section 80D: (official page Indian Income Tax Act)Section 80D of Indian Income Tax Act is especially useful if your employer does not cover your health or medical expenses. It is a good idea to get medical insurance or health insurance for you, your spouse, dependent children or dependent parents, as you can claim a deduction of upto Rs. 15000/- per anum for the premia paid on this insurance. For senior citizen this limit is Rs. 20000. With effect from 1-4-2009, you can claim the total of the following items for deduction under section 80D.

1. Total amount of premium paid for health insurance of family (meaning spouse + children), or Rs. 15,000 , whichever less.

2. Total amount of premium paid for health insurance of your parents or Rs. 15,000, whichever less.

Thus if you are paying premiums of mediclaim policies for your spouse children and parents you can get a total tax deduction of upto Rs. 30,000.

Indian Income Tax deduction - Section 80DD: (official page India Income Tax Act)Section 80DD of Indian Income Tax Act provides provision for tax deduction if you incurred medical expenditure for a dependents who are disabled. Here dependent means spouse, children, brothers, sisters or any one of them. The maximum tax deduction provided by section 80DD is Rs. 50000 in case of ordinary disability and Rs. 75000 if the disability is severe. The definition of severe disability is as defined in the official page of Indian Income tax Act.

Indian Income Tax deduction - Section 24: (official page India Income Tax Act)Whenever you take a housing loan build or buy a new home, the interest payable on this home loan is eligible for income tax deduction under section 24. Maximum deductible amount, i.e. maximum interest you can claim for income tax deduction under section 24 is Rs. 1,50,000. In case you are paying interest on money borrowed for renovation of your home, even this may qualify for tax deduction under section 24 of Indian Income Tax Act. (see official page or ask in a comment).

Indian Income Tax deduction - Section 80GG: (official page - India Income Tax Act)If you pay rent for the house that you are staying in and do not get HRA, any rent you pay in excess of 10 percent of your salary is eligible for income tax deduction under section 80GG of Indian Income Tax Act. The income tax deduction you can claim is the minimum of the following amounts.

1. Rent you pay minus 10% of your salary.2. 25% of your gross total income.3. Rs. 2000/- per month.

Indian Income Tax deduction - Section 80E: (official page India Income Tax Act)Under section 80E of Indian Income Tax Act, any amount of interest paid on educational loan taken for your higher education or higher education of your husband / wife or children is deductible from your taxable income. Here higher eduction means - studies for any graduate or post-graduate course in engineering, medicine, management or for post-graduate course in applied sciences or pure sciences including mathematics and statistics.

Indian Income Tax deduction - Section 80G: (official page India Income Tax Act)Donations made to funds like Prime Minister's Relief Fund, National Children Foundation, any University or educational institution of 'national eminence', etc. (see official page for complete list) are deductible from your taxable income according to section 80G of Indian Income Tax Act. For any other donations you are eligible to take income tax deduction for 50% of the donation amount. See the offical page of Indian Income Tax Act.

ITR-1? That's your new income tax form

The Income Tax department has come out with eight new tax return forms. Of these, the ITR-1 (Income

tax returns-1) and ITR-2 (Income tax returns-2) forms are most relevant for salaried individuals.

These two forms have come into effect from May 14, 2007, for filing tax returns for the financial year

2006-07.

ITR-1 is applicable to those individuals who have earned only salary and interest income during the financial year. ITR-2 is applicable to those who have other types of non-business incomes, such as income from house property, capital gains, etc.

Note: Those individuals claiming deduction on interest on housing loans would be required to file ITR-2 only.

Neither of the forms require the taxpayers to prepare the controversial cash flow statement (a statement of your income and expenditure for a year). The new forms have been made annexure free. What this means is you are not required to attach any documents to the tax return. Not even Form 16!

You will have the following options to file your tax returns:

Online filing of returns by those who have a digital signature. Such taxpayers will not be required to file a paper return. 

Online filing of returns by those who do not have a digital signature. Such taxpayers will be required to submit a one-page duly signed verification form, Form ITR V, with the concerned income tax office. 

Manual filing of paper return form. Manual filing of bar coded return form.

Now, let's look at the important features of the ITR-1 and ITR-2 forms.

ITR-1

ITR-1 is relatively simpler and similar to the Saral Form, the Form 2D. Two versions of ITR-1 have been introduced. One is two-pager and the other is a three-pager. The only difference between these two versions is the latter is more spacious than former. Content-wise, both versions are identical.

Why you must file a tax return

Since you do not have to attach Form 16 to the tax return form, you will need to fill in certain details that appear in your Form 16 here.

One important aspect of the new form is that taxpayers are required to mention the amount of certain types of high value transactions carried out by them. These transactions are already being reported to the tax authorities through Annual Information Return filed by various agencies such as banks, credit card companies, mutual funds, RBI, property registrars, etc.

This section should be carefully filled in. Incorrect reporting of such transactions may trigger scrutiny of your tax return by the Income Tax department.

Under this section, the taxpayers are required to mention the transaction amount of the following:

Nature and value of transaction RemarksCash deposits totalling Rs 10 lakhs or more in a year in any savings account.

The important point here is that this clause is applicable if the total of all cash deposits during the financial year in a saving account is Rs 10 lakh or more.

Payments totalling Rs 2 lakhs or more in the year made against bills raised in respect of a credit card.

The important point here is that this clause is applicable if the total of all payments during the year for a credit card is Rs 2 lakh or more.

Let me explain: if you have used three credit cards during the FY 2006-07 and you pay a total of Rs. 1.9 lakhs against the first credit card, Rs. 1.4 lakhs against the second credit card and Rs 50,000 against the third credit card, then you need not report anything since you did not pay Rs 2 lakhs or more against a single credit card.

However, in FY 2006-07, if you pay total Rs 2.2 lakhs against the first credit card, Rs 2.7 lakhs against the second credit card and Rs 1 lakh against 3rd credit card, then you need to mention an amount of Rs 4.9 lakhs under this item. This is the total amount of payments against those credit cards whose total payment is Rs 2 lacs or more!

Payment of Rs 2 lakhs or more for acquiring units of a mutual fund.

This clause is applicable only if the amount of a single payment towards acquiring units of a fund is Rs 2 lakh or more.

Payment of Rs 5 lakhs or more for acquiring bonds or debentures issued by a company or an institution.

This clause is applicable only if the amount of a single payment towards acquiring bonds or debentures of a company is Rs 5 lakh or more.

Payment of Rs 1 lakh or more for acquiring shares issued by a company.

This clause is applicable only if the amount of a single payment towards acquiring shares issued by a company is Rs 1 lakh or more. This would cover payment of Rs 1 lakh or more made for IPO application or for obtaining shares under ESOP scheme.

 Purchase property valued at Rs 30 lakhs or more.

This clause is applicable only if the value, as considered by registration authorities at the time of purchase, of any immovable property bought by the taxpayer is Rs 30 lakh or more. The clause is not applicable if the transaction

value is less than Rs 30 lakh.Sale of property valued at Rs 30 lakh or more.

This clause is applicable only if the value, as considered by registration authorities at the time of sale, of any immovable property sold by the taxpayer is Rs 30 lakh or more. The clause is not applicable if the transaction value is less than Rs 30 lakhs.

Payment of an amount or amounts aggregating to Rs 5 lakhs or more in a year for bonds issued by the Reserve Bank of India [ Get Quote ].

This clause is applicable if the aggregate of all payments towards purchase of RBI bonds exceeds Rs 5 lakh in a financial year.

ITR-2

ITR-2 is more comprehensive and seeks more detailed information.

How to get yourself a PAN card!

Some of the important schedules in ITR 2 are:

Schedule S on salary income

This requires the taxpayers to divide their salary income into:

1. Salary (Excluding all allowances, perquisites and profit in lieu of salary)2. Allowances exempt under Section 10 such as HRA, LTA, conveyance, medical reimbursement, etc.3. Allowances not exempt such as shift allowance, special allowance, taxable portion of HRA/ LTA, etc.4. Value of perquisites in the form of rent free accommodation or interest free loans, etc.5. Profits in lieu of salary

The amount of items 2, 4 and 5 is generally mentioned in the Form 16 itself. However, many taxpayers will have to work out the amounts under items 1 and 3 by themselves. The amount under the first head would include only the basic salary. The amount under the third head would include gross salary as mentioned in Form 16 minus amounts under 1 and 2.

Schedule HP for Income from House Property

Taxpayers are required to mention the full address of each of the properties owned by them. They are also required to mention the name and the PAN (mentioning of tenant's PAN has, however, been kept optional) of the tenant.

Paid more tax? How to claim a refund

A detailed computation statement is required to be filled in for each of the properties owned by the taxpayer. The form enables the taxpayers to fill in the details of upto two residential properties. If a taxpayer owns more than two houses then s/he may have to attach an annexure to provide complete details.

ITR-3:-

For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship.

ITR-4:- For individuals & HUFs having income from a proprietary business or profession.

ITR5:- For firms, AOPs and BOIs

ITR-6:- For Companies other than companies claiming exemption under section 11.

ITR-7:- For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D)

ITR-8:- Return for Fringe Benefits.

ITR-V:- Where the data of the Return of Income in Forms Saral-II (ITR-1), ITR-2, ITR-3, ITR-4, ITR-5 & ITR-6 transmitted electronically without digital signature.