The ongoing COVID pandemic has created lots of confusion already with many life loses and people suffering both on the health and financial front. The Government has not made any significant changes to the IT Forms this year in comparison to last year’s forms. Only a bare minimum changes made due to the amendments made to the Income Tax Act 1961. This email is circulated to create awareness about the types of IT Forms to be filled and the slabs of IT to be considered for the AY 2021-2022.

ITR – 1 Sahaj:

Individuals who are residents and total income up to INR 50 Lac by way of one house property in single ownership, salaries, family pension income, interest income and income from agriculture up to INR 5,000 can file ITR – 1 Sahaj.

ITR – 2:

The Director of the company or any other person who possesses unutilised shares of the company are required to file their return in ITR – 2. Moreover, any individual who owns more than one house property should also file ITR – 2. However any person who earns money from business or profession cannot file ITR – 2.

ITR – 3:

Any individual who is running a business or has a profession, inclusive of  both tax audit and non-audit cases can file ITR – 3. Further, income from salary, pension, house and income from other sources shall also be clubbed in ITR – 3.

ITR – 4 Sugam:

Individuals, HUF’s and Firms other than LLP’s who are residents, with incomes up to INR 50 Lac, income from business and profession calculated under section 44AD, 44ADA, 44AE or Family Pension, Interest Income, agricultural income up to INR 5,000 and one house property in single ownership are entitled for ITR – 4 Sugam.

ITR – 5:

Persons other than individuals, HUF and companies i.e LLP, partnership, firm etc can file ITR – 5. In nutshell any AOP (Association of persons), BOI (Body of Individuals), LLP, Firms, Estate of deceased. Estate of Insolvent, Investment Fund, Artificial Juridical Person (AJP) and Business Trust can file ITR – 5.

ITR – 6:

ITR – 6 is used by companies who are not eligible for an exemption under section 11 i.e. companies who receive income by way of income from property held for religious and charitable trusts seek exemption under section 11. The Income Tax Return should be filed electronically with a digital signature.

ITR – 7:

All trusts, charitable institutions, political parties etc which claim exemption under IT Act can file ITR – 7. Adding to this individuals and companies which fall under section 139(4A), 134(4B), 134(4C) and 134(4D) should file ITR – 7. Taxpayers as advised to tally TDS and TCS on behalf of Tax Credit Statement in Form 26AS. This ITR is split in two parts and 23 schedules. Part A comprises of general information to be provided commencing from fiscal year 2019-20. Part B forms up tax computations and total income with respect to the taxable income.

INCOME SLAB AND TAX RATES FOR FY 2020-21 /AY 2021-22

Income Tax Rate and Slab for Individuals and HUF:

  1. Individual (Resident or Non-Resident or Resident but not Ordinary Resident) who is less than 60 years of age on the last day of the concerned year and for HUF.
TAXABLE INCOME

       (in INR )

                TAX RATE

                 (In %)
Up to 2,50,000                      NIL
2,50,001 – 5,00,000                       5%
5,00,001 – 7,50,000                     10%
7,50,001 – 10,00,000                     15%
10,00,001 – 12,50,000                     20%
12,50,001 – 15,00,000                     25%
Above 15,00,000                     30%

 

  1. Individual (Resident or Non-Resident or Resident but not Ordinary Resident) who is 60 years or more but less than 80 years at any time during the previous year.
TAXABLE INCOME

       (in INR)

                  TAX RATE

                    (In %)
Up to 2,50,000                     NIL
2,50,001 – 3,00,000                     5%
3,00,001 – 5,00,000                     5%
5,00,001 – 7,50,000                    10%
7,50,001 – 10,00,000                    10%
10,00,001 – 12,50,000                     20%
12,50,001 – 15,00,000                     25%
Above 15,00,000                     30%

iii)     Individual (Resident or Non-Resident or Resident but not Ordinary Resident) who is 80 years or more at any time during the previous year.

TAXABLE INCOME

       (in INR )

                 TAX RATE

                   (In %)
Up to 2,50,000                       NIL
2,50,001 – 5,00,000                        5%
5,00,001 – 7,50,000                      10%
7,50,001 -10,00,000                      15%
10,00,001-12,50,000                      20%
12,50,001 – 15,00,000                      25%
Above 15,00,000                      30%

Below rates of Surcharge are applicable where total income exceeds:

  1. 10% of Income Tax if above INR 50 lac
  2. 15% of Income Tax if above INR 1 crore
  • 25% of Income Tax if above INR 2 crore
  1. 37% of Income Tax if above INR 5 crore

Note: In case of incomes accruing from Short Term Capital Gains u/s 111A, Long Term Capital Gains u/s 112A & Short Term & Long Term Capital Gains u/s 115AD (1) (b), no enhanced surcharge 25% – 37% is applicable.

Education Cess is 4% of Income Tax plus Surcharge.

Note: A resident or Resident but not Ordinarily Resident individual is entitled to rebate under section 87A if his total income does not exceed Rs. 5, 00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less. rebate under section 87A is available in both scheme I.e. existing scheme as well as new scheme.

Tax Rate For Partnership Firm:

A partnership firm (including LLP) is taxable at 30%.

Surcharge: 12% of Income tax where total income exceeds Rs. 1 crore

Education cess: 4% of Income tax plus surcharge

Tax Slab Rate for Domestic Company:

A domestic company is taxable at 30%. However, the tax rate is 25% if turnover or gross receipt of the company does not exceed Rs. 400 crore in the previous year.

Tax Rates for Foreign Company:

A foreign company is taxable at 40%

Surcharge:

  1. a) 2% of Income tax where total income exceeds Rs. 1 crore
  2. b) 5% of Income tax where total income exceeds Rs. 10 crore