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  • Category: Miscellaneous
    Points:5

    Can you decode this and tell the answer straight- IT return queries

    The other day I was trying to start my Income Tax return filling exercise starting with the preliminary preparations and data comparison. At the initial pages itself I saw the following quoted portion.
    "Do you wish to exercise the option u/s 115BAC (6) of Opting out of new tax regime?".
    I was asked to tick "Yes" or "No".
    It took a lot of time for me to really reach the correct conclusion and then to tick the related slot.

    I am aware of the 'officialese'. It is because of this complicated officialese in government and legal matters that leads to a lot of confusions, errors and litigations. Many rules and regulations when worded in the stereotype officialese turn to become ambiguous. In IT web site itself there are many such examples.

    I would like members to give their straight and simple interpretation for the above quoted winding phraseology. Please also feel free to discuss any other points to be taken care of while filing IT returns.

    {Note- Check out this thread also. -Editor}
  • #779810

    Points:5
    While preparing my draft IT return a few days back I also stopped at that option for quite sometime before selecting my choice.
    The language is typical official and simply means that the default return will be prepared under the new regime until and unless one categorically says 'yes' at that option.
    Instead of writing such a complex sentence they could have written -
    Under which regime do you want to file your IT return - New or Old?
    When the officers of a department become too cautious of these things then they take all precautions in framing this type of language and do not bother whether the tax payer will be able to understand that easily or not.
    The issue of filing tax under old or new regime is itself a complicated one and that is why this type of message is being flagged by them in the beginning itself.
    Knowledge is power.

  • #779815

    Points:3
    As suggested by Saji Ganesh as this thread is related to IT return filing we can have our queries and discussions regarding various matters including the issue raised by Venkiteswaran in this thread itself and there will be no need of floating other threads for issues and clarifications regarding IT return for the financial year 2023-24. Members can give their responses or queries or solutions accordingly in this thread itself. Thanks.
    Knowledge is power.

  • #779817

    Points:4
    Most of the people go to IT agents for filing of the return as the process is a bit complicated. Those who are computer savvy and well versed with online activities can try to file the IT return themselves. Still, there are some points which can be clarified by people who fill their return themselves and have experience in this matter.

    I want to share one point in this regard that one can choose between filing the IT return either in old regime or new but once one chooses 'new' then next year the option will not be given and one will have to file it in new regime only. Member may tell if there is something wrong in my understanding about that.
    Thoughts exchanged is knowledge gained.

  • #779823

    Points:5
    As mentioned by the author, the language used in official circulars and Websites is always confusing only, for the average knowledge person in English. Almost all notes from the government will be like that only. But there may be specific reasons for that I don't know.
    After resigning from the service and starting my profession as a technical consultant, I have to submit the IT in a different form. So I contacted an IT consultant and he will be doing the needful of course, for a cost. The income I am getting as a consultant can't be treated as salary. I can claim some money as expenses for doing my business which can be deducted from my income. Of course, I have to show proof of expenses. So, to do it correctly, I continue going to the IT consultant.
    I think if a person doesn't want to submit the IT returns in the new regime, they should tick Yes for the above question. If we want to go for a new regime we should say no.
    drrao
    always confident

  • #779836

    Points:5
    I want to add here my understanding about old regime and new regime and often asked question as which one is better.
    When Govt introduced new regime then it changed the tax rates especially for the lower slabs but removed all deductions that were allowed for savings like PPF, certain interests, tax saving schemes, etc. These deductions were allowed upto a maximum of Rs 200000 per year.
    At that time people compared the tax between the two regimes and found that old regime was better as tax outgo was less.
    Govt wanted that people should opt for new regime so that old regime could be discarded for smooth working of IT department as well as to earn more tax revenue. To achieve that what they did was that in the next subsequent years Govt further modified the tax rates or lower slabs to attract people to new regime. Now it has come to a stage where there is no appreciable difference between the two. Still, I would advise the people who have income less than 6 to 8 lakh per year to compare the tax outgo between old and new and accordingly file the return.
    For those who have an income on higher side for them in general new tax regime is beneficial.
    Knowledge is power.

  • #779843

    Points:3
    I wanted to check the TDS deducted by the banks on my fixed deposits for the financial year 2023-24 but when I visited the TRACES portal, I found that all the interests on my FDs are not reflecting in the document 26AS. One of my friends told that sometimes these get updated by June end and it is better to wait and file the return accordingly.
    Can we file the return with the incomplete data? If so then how the remaining interest would be adjusted? Any ideas?
    Thoughts exchanged is knowledge gained.

  • #779867

    Points:5
    From he responses above, I see that other members also feel like me about the way simple things are presented in a confusing way.
    As Umesh precisely said, it could have been a simple questions 'Do you want to file your IT return under NEW system or OLD system. Or may be " Do you want to file your IT return under NEW system- Tick Yes or No."

    Many reforms have come like using local language in courts. So a similar dedicated effort has to be made to make the laws-at least those which the general public deals with regularly, in easy to understand simple language and style.
    Compliance of rules and laws can be better if the commo man understands them easily.

    It seems IT return filing was relatively more easy earlier. It was expected that it will become more easy and simpler after digitalizing and online system. It has instead become more circuitous and confusing. The pre-filled data has many discrepancies and it is difficult to take up our issues as the way is online under pre-prepared menu only.
    Regarding the doubt raised by Neeru Bhatt on TDS, yes, there can be delay by the banks (or TDS deducting organisation) in filing the data. When I last checked for my wife's details, I found that the last quarter (Jan to March 24) was not available in 26 As or AIS.
    As an alternative you may ask the bank to furnish you the details stating that the same is not available in IT/TRACES. Even there also it will be difficult to verify with our passbook because during the beginning quarter and ending quarter the 26AS data will have proportionate figures ,but our pass book will show the actual credit later or before in full.

    Since day one I was to file ITR, I have done it myself only without taking professional service. Probably I would have saved some amount of tax all these years had I approached a professional. But it will give a self satisfaction, self confidence and fear free mind when we do it ourselves as we know all details ourselves. But even for me it becomes a bit more tedious in recent years.

  • #779878

    Points:5
    Venkiteswaran has well clarified the issue of incomplete information in 26AS and I think only by end of June 2024 it would get fully populated by the concerned banks. I am also waiting for that.
    There is a reason why the online process for IT return filing is so much complicated. Our software engineers are trying to incorporate every rule and regulation in these forms so that no income is left uncovered and the person can declare everything. This time they have increased the modules to be filled in so that everything gets nicely covered. There are some modules which many of us may need not to fill or verify but only the experienced people will come to know which one to fill and which one to ignore. That is the reason that many of us have to go to the IT agent to get it filed.
    I am surprised by the good work that these software engineers have done in making this IT app. So far I was only impressed with the Indian Railways reservation system app but this IT return filing app (e-filing as they call it) is equally massive and robust. I hope it will further improve in future.
    Knowledge is power.

  • #779884

    Points:2
    Ok. I got the point. We have to wait for the full information in form 26AS. Hope it is available by June end or July beginning this year.
    As the last date is 31st July, I think sufficient time is there.
    Thoughts exchanged is knowledge gained.

  • #779923

    Points:4
    One of my friend who is retired and getting interest from his fixed deposits and a small annuity pension from LIC. That is the only source of his income. He had sold some mutual fund units (after keeping them with him for a long time) in February 2024 and got very good return and it is now to be shown under long term gain during the financial year 2023-24 and he was asking me which return he should file ITR1 or ITR2.
    As per my understanding, I told him ITR2 because of that long term gain thing.
    Members having experience in this regard may please confirm whether that is the correct understanding.
    Knowledge is power.

  • #779928

    Points:5
    Umesh,
    ITR 1 is applicable for the following
    1. The income can be either from salary or pension.
    2. Income can be there from Other Sources (excluding activities like horse racing, gambling, lotteries, and more).
    3. No property outside India.
    4. No receive revenue from other countries.
    5. One can have interest income from SB, Deposits, and other interest income
    6. Family pension holders can also apply.
    ITR 2 is applicable in the following cases.
    1. Persons having a salary by pension having income above 50 Lakhs.
    2. People having income from more than one property
    3. People having Income from other sources (including horse racing, card games, lotteries, gambling, etc.).
    4. People having capital gains
    5. People who are bringing forward the losses incurred in the previous year
    6. People having more than Rs.5000 in agriculture income.
    7. People having property abroad and getting income from abroad.
    8. People claiming DTAA benefits or Relief u/s 90/91.
    9. People who invested in unlisted equity shares
    10. People who are directors in companies
    11. People having deferred income tax on ESOP received from an employer being an eligible start-up

    Based on the above inputs your friend can take a decision I think.
    drrao
    always confident

  • #779933

    Points:4
    Dr Rao, thanks for providing the information in such a precise manner. It is clear from the details provided that my friend will have to file the return in ITR2 only.
    One more thing that I learnt from your crisp capsule is that those who are carrying forward loses from yester years can also adjust them in the present assessment year by filing the return under ITR2.
    So far I had always filed my return in ITR1 so I was not knowing the particulars where ITR2 is to used.
    Anyway, the above information would be handy for some other people also.

    This thread is becoming a good source of IT filing knowledge and I would take this opportunity to request members/readers of this thread to raise their queries or share some specific knowledge in this area.
    Knowledge is power.

  • #780057

    Points:3
    I want to inform to all the members/readers of this thread that 26AS document in Traces site is now populated and in many cases people have started filing the return. It is possible that in some cases it might take a few days more so people should first check it and then only start filing. However, there is a facility of saving a draft of the IT return and that can also be done.
    Knowledge is power.

  • #780130

    Points:4
    I have a query regarding the tax deducted at source on our bank FDs and its reflection in the document 26AS in the Traces site.
    If the bank has not reflected the interest correctly in 26AS and shown it on a lower side and we file the ITR with that data then if bank corrects that after our filing but before the last date (31st July) then are we supposed to file a revised return or that extra amount can be taken to next year return.
    Members having any idea of this problem may please share their experiences.
    I also have a feeling that banks would not be able to update, even if a correction is there, the document 26AS after the last date (31st July).
    Thoughts exchanged is knowledge gained.

  • #780132

    Points:3
    When we sell our shares we will get some profit. This profit is taxable under capital gains. But it is not a straight, difference between the purchased price and sold price. There is a formula for the calculation of the same. Can any member share their knowledge on this issue? I want details of under what section and on what basis we have to come out with the figure of profit.
    drrao
    always confident

  • #780138

    Points:5
    Dr Rao, If shares are held less than 1 year and sold then it is treated as short term gain and is taxed at flat rate of 15% of the gain.
    If shares are held for more than 1 year and sold then it is treated as long term gain. Upto the long term gain of Rs 100000 there is no tax and for the amount more than that the income tax is levied @10% on the amount in excess of Rs 100000.
    Example:
    2000 shares of a company were bought for Rs 34/share in the financial year 2015-16. Same were sold in the financial year 2023-24 at a rate of Rs 360/share. Let us calculate the tax to be paid on that.

    It is a long term gain. Tax rate 10%.
    Shares were bought Rs 2000 x 34 = 68000
    Shares were sold Rs 2000 x 360 = 720000
    So gain = 720000 - 68000 = 652000
    Taxable gain = 652000 - 100000 = 552000
    So tax = 10% of 552000 = Rs 55200
    Knowledge is power.

  • #780139

    Points:5
    @ Neeru Bhatt #780130.

    The interest from your bank FD will be entered in your savings account pass book or any other account where the interest is credited.
    You can ask the bank to give you F 16A and/or a statement of interest credited and TDS deducted for the financial year. You may compare this with your 26AS or AIS downloaded from IT web site. From this you can know whether the bank has correctly filed the data with IT department. But if you have ensured the correctness you may show the correct interest income and TDS deducted in your return. If you have sufficient time left before last date of filing , you may send a query/doubt clarification to IT by the IT site email and get answer.

    Bank will deduct TDS only when the FD interest earning comes to Rs50000/- and onwards. In the case of cumulative FDs the interest eligible will be calculated proportionately till March 31 st and the TDS if any will be recovered. But here you will not se any interest credited to your savings account before maturity.

    The practical difficulty I faced was that in case bank has deducted and not remitted TDS , then if you do not have the chalan data from bank he IT site will not allow you to proceed, In that case simply accept the 26As or AIS data and file your ITR. It may be either corrected by IT on assessing or may reflect in next FY data.
    Hence if you have many FDs then start pooling data sufficiently early before last date for a smooth filing.

  • #780141

    Points:4
    Venkiteswaran #780139, thanks for your detailed explanation about the mismatch between the actual tax deducted and that reflected in 26AS.
    As we cannot increase or decrease the 26AS figure so we will go ahead with whatever it is and when bank corrects it and brings forward in the next year's 26AS we will accept it at that time while filing the next year return.
    One of my friend told me that in the present ITR form there are some modules (schedules) for such amounts pertaining to last year. We will check that and find more about it while actually filing the ITR or sitting with the agent who does this exercise for us.
    Thoughts exchanged is knowledge gained.


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