15G Exempts TDS on Taxable Income below a threshold limit!

15G Exempts TDS on Taxable Income below a threshold limit!

Form 15G can be filed with the prescribed financial institution if the individual’s total income is less than the basic exemption amount.

Where interest income from time deposits with prescribed financial institutions for a financial year (FY) exceeds the required maximum (currently 40,000), TDS at the applicable rate is deducted, according to the rules of the Income Tax Act.

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When an individual’s total income is less than the basic exemption limit, he or she can file Form 15G with a prescribed financial institution (such as a bank) to request that no taxes be withheld from the interest income made on the deposits.

Furthermore, if the tax rate at which the total income is subject to tax is NIL or lower than the rate at which the TDS is deducted (regardless of any advance tax paid by the recipient of income), the recipient of income may apply to the jurisdictional tax officer in the prescribed form for a lower or NIL deduction certificate (LDC). Following an examination of the appropriate papers, the tax officer may issue an LDC indicating a lower rate of TDS deduction at his or her discretion. TDS will be deducted at the rate provided in the LDC in this circumstance.

7 ways in which taxpayers can reduce their tax liability

Separately, take notice of the following from the perspective of the timing of taxation of such income. The interest income you receive from recurring deposits is taxed under the heading “income from other sources” (IFOS) according to the accounting system you use on a regular basis (i.e. mercantile/cash basis).

As a result, if you have previously offered interest income or revenue from other sources on an accrual/receipt basis, you might use the same approach for income from these RDs. The interest income will be taxed at the slab rates that apply to you for the fiscal year in which it is received. Any TDS already deducted by the bank on these deposits during the relevant FY will be credited against the income tax you owe for that year. If the amount of taxes deducted at source is less than the appropriate tax rate, you must pay the difference in advance tax in the specified instalments.

7 ways in which taxpayers can reduce their tax liability

7 ways in which taxpayers can reduce their tax liability

Nobody enjoys paying taxes in this world. There is no way to avoid paying taxes if you have taxable income. However, effective planning from the start of the fiscal year might help you lower your tax liability.

Income tax rules in India have exempted certain expenses and investments from taxation, or if you make certain investments or incur certain expenses, you may be entitled to tax deductions and exemptions. As a result, such investments and expenses can help you minimise your tax liability.

Income tax rules in India have exempted certain expenses and investments from taxation, or if you make certain investments or incur certain expenses, you may be entitled to tax deductions and exemptions.

Here are seven strategies for lowering your tax bill:
1. Premium payments for life insurance, pension plans, and provident funds

Individuals can deduct up to Rs 1.50 lakh in payments for life insurance premiums, provident fund, PPF, investment in ELSS schemes, tuition fees paid for up to two children, National Savings Certificate, home loan principal repayment, and so on under Section 80C of the Income Tax Act 1961.

Section 80CCC allows you to deduct premiums paid for annuity and pension plans offered by insurance firms. Similarly, deductions can be claimed on investments made in the Central Government’s pension system under Section 80 CCD (1).

However, the total deduction for all three components combined cannot exceed Rs 1.50 lakh.

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2. Contribution to the National Pension System (NPS)

An extra deduction of up to Rs 50,000 can be claimed on NPS contributions made by employees under Section 80 CCD (1B). This is in addition to the investment made according to Section 80CCD (1).

A deduction for an employer’s NPS contribution can be claimed under Section 80 CCD2. However, the size of the tax benefit will be determined by the type of employer.

-The deduction limit is 10% of the basic wage plus dearness allowance if the employer is a PSU, state government, or any other private sector enterprise (DA).

If your employer is the federal government, you can deduct up to 14% of your basic salary plus DA.

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3. Rental property income

An individual can claim a tax deduction of up to Rs 2 lakh on interest payments on a house loan or home improvement loan on a self-occupied property under Section 24(b). However, payments made toward the principal of a house loan can be claimed under Section 80C up to a maximum of Rs 1.50 lakh.

You cannot, however, claim this tax benefit if you have chosen the new tax regime.

4. Premium payment for health insurance

A deduction can be claimed under Section 80 D for premiums paid for health insurance for self and dependent family members, as well as for preventative health check-ups. However, there are certain limitations:

Section 80D allows a deduction of Rs 25,000 for self/spouse, dependent children, or patents. This deduction might be up to Rs 50,000 if the claimant or any family members are senior people. Only a Rs 5000 deduction is allowed under Section 80D for preventive health examinations.

Medical expenses incurred by a senior citizen can also be deducted up to Rs 50,000 under Section 80D.

5. Expenses for the care and treatment of a dependent who is impaired

Expenses for the maintenance or medical care of a disabled dependent can be deducted up to Rs 75,000. However, if you have a severe disability (80% or more), you may be eligible for a reduction of up to Rs 1.25 lakh.

6. Medical treatment reimbursement

A deduction of up to Rs 40,000 can be claimed under Section 80 DD (1B) for medical expenditures incurred by self and dependent family members for specified diseases. If one of the family members is a senior citizen, the deduction limit would be increased to Rs 1 lakh.

7. The amount of interest paid on a student loan

An individual can deduct interest paid on an education loan taken for the higher education of a dependent child or spouse under Section 80E. It’s worth noting that there’s no maximum limit to this deduction.

Haven’t received an Income tax refund yet? Follow these Steps

Haven’t received an Income tax refund yet? Do this

If there is a discrepancy between the information on the tax return and the information on file with the IRS, the refund may be delayed. Another reason for the delay could be if the bank account information provided is inaccurate.

Between April 2021 and October 4, 2021, the Central Board of Direct Taxes (CBDT) paid refunds of Rs 82,229 crore to over 53.54 lakh taxpayers. Tax refunds are usually paid within 20-45 days of the conclusion of ITR processing by the Centralized Processing Centre (CPC).

You should receive your refund within 30-45 days after your income tax return (ITR) has been submitted. However, there are a variety of reasons why your refund may be delayed.

Income Tax Refund can be claimed when:

  • You did not provide your company with all of the investment proofs. As a result, your employer’s tax deductions exceeded your actual tax due for the fiscal year.
  • On your interest income from bank FDs or bonds, excess TDS was deducted.
    The advance tax you paid on self-assessment exceeds your regular assessment tax liability for the corresponding FY.
  • If there is a case of double taxation,

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How to check Income Tax refund status:

On the National Securities Depository Ltd (NSDL) website, as well as the Income-tax Department’s e-filing portal, you can check the status of your income tax refund.

1. On the NSDL website, for starters.

Step 1: To trace your return, go to the NSDL website.
Step 2: A new window will open, displaying the following webpage. Fill in the required information, including PAN and AY, and then click ‘Proceed.’
Step 3: The status of your income tax refund will be presented, as shown in the figure below.

2. On the e-filing site:

Step 1: Go to the Income Tax Department’s e-filing portal by clicking here.
Step 2: Select View Returns/ Forms from the drop-down menu.
Step 3: Select ‘Income Tax Returns’ from the ‘My Account page. Submit the form.
Step 4: Select the acknowledgement number from the drop-down menu.
Step 5: A page showing your return details along with income tax refund status will appear.

Haven’t received an income tax refund yet? Reasons for delay

Tax refunds are usually paid within 20-45 days of the conclusion of ITR processing by the Centralized Processing Centre (CPC). If there is a discrepancy between the information on the tax return and the information on file with the IRS, the refund may be delayed. Another reason for the delay could be if the bank account information provided is inaccurate.

Reasons why the refund hasn’t reached you and what to do:

1. Your reimbursement request requires further evidence from the IT department: Contact the assessing officer as soon as possible by phone or mail, and send the needed paperwork. Obtain a written acknowledgement from the officer.

2. Request for a refund was denied. According to the IT department, you owe them the following taxes: The government may send you a notification detailing the amount of unpaid taxes. In this situation, double-check all of your paperwork and compute your tax liability and refund due. File a rectification to support your claim if the figures you entered in the returns form are valid.

If the returns filed is found to be incorrect, pay the outstanding tax demanded by the department within the time limit mentioned in the notice.

3. Refund request determined to be erroneous by the IT department: If the department determines that your refund request is incorrect, you will receive a note stating why. You can file a rectification to support your claim even if you receive the notice.

4. Forgot to add a tax break you’re entitled to: If your returns have not yet been processed by the IT department, you can go ahead and modify them to include the missing deductions.

5. The bank account information provided to the IT department for tax filing has changed: If your bank account information has changed, inform your assessing officer of the new account number and MICR code. The evaluating officer will advise the bank of this information and request that the money transfer process be updated.

If you haven’t still received your refund, do these things:

1. Review your ITR:

If there is a discrepancy between the information on your tax return and the information on file with the IRS, your refund may be delayed. So, go over your ITR to see if you made any mistakes. If you haven’t received your refunds or received any correspondence from the IRS in the last two months, the first thing you should do is review your ITR.

2. Additional information:

The Income Tax Department may require additional documentation to process your refund request in some situations. If the department requires more proof to complete your refund request, please contact the assessing officer as soon as possible by phone or mail and submit the needed documentation to ensure that your refund request is processed quickly and the cash credited as soon as possible.

3. Re-evaluate:

If there is an outstanding tax amount, refund claims may be denied, and you may receive a letter from the department specifying the overdue tax amount. If you find yourself in this scenario, go over all of your documentation and recalculate your tax liability and refund. File a rectification to support your claim if the figures you entered in the returns form are valid. If your ITR is discovered to be erroneous, you must pay the outstanding tax sought by the department within the time frame specified in the notice in order to get your refund.

 

Extended due dates of Income Tax Return and Tax Audit

4. Mistakes in ITR:

Your refund will be delayed if you select the incorrect ITR form, misspell important personal details, or provide incorrect information. Income tax refunds are now solely granted electronically, according to the tax department’s new method, which implies that refunds are credited directly to the taxpayer’s bank accounts. If the bank account number entered on the tax form is wrong, reimbursements will be delayed until the error is addressed. If you make this mistake, you can update your bank account information on the income tax department’s website. It is critical that you provide a bank account that is linked to a permanent account number.

If there are discrepancies between the data you provided last year and what you did this year, an IT official will extensively examine your records to see if you need to submit further information. You may receive a request from the IT department to provide additional information.

5. Income or tax amount mismatch:

If there is a discrepancy in income from different sources, the refund process may be delayed. This usually occurs when the information on Form 16 does not match the TDS information on Form 26 AS. When an ITR cannot be completed because of a proposed adjustment under section 143(1)(a) or because it is defective under section 139, the refund is also delayed (9). To ensure that your refund request is met, you will need to file an amended return.

6. Prevalidating the bank account:

The bank account must be prevalidated in order to get an income tax refund. You can access profile settings by going to the income tax department’s website and logging in with your PAN and password. You can easily find a prevalidation option for your bank account. Pre-validation will be done directly using an electronic verification code (EVC) and net-banking route if your bank is integrated with the e-filing portal. Your bank account number, IFSC code, mobile number, and email address associated with that account must all be provided.

It’s worth noting that if you make a mistake on your ITR and the department sends you a communication, you’ll only get it if you provided accurate communication information.