Category: TAX

The Indian government has introduced the QRMP plan to make it easier for small business taxpayers to file taxes. 

What is the QRMP scheme?

The Quarterly Reports Monthly Payment (QRMP) program, which is in effect as of January 1, 2021, enables registered taxpayers with combined revenue of up to INR 5 crores in the most recent financial year to file returns every quarter and pay taxes monthly.

Prior to the QRMP scheme, taxpayers had to file GSTR-1 and GSTR-3B every month. Now, they just have to do so once every three months.

For instance, you can now only submit your returns once from April through June, and you can pay your taxes by the May deadline. By this plan, you must pay taxes every month (i.e., the first two months of a quarter) using the fixed sum method (via a pre-filled challan) or the self-assessment method (due tax amount after adjusting ITC).

If you choose this plan, you’ll remain a part of it until you reach the turnover level or decide to leave.

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Why is the QRMP scheme important?

• Small business taxpayers need to be aware of this plan since it would reduce the number of returns they must file annually.
• The optional Invoice Furnishing Facility (IFF) is another alternative for qualifying taxpayers under this program.
• Four GSTR-1 returns can be submitted through IFF each year, and you can upload invoices for the first two months of a quarter rather than waiting until the end of the quarter before filing the return. 

Criteria for the QRMP scheme

• This program is only available to those who are required to file Form GSTR-1 and Form GSTR-3B returns.
• Your prior fiscal year’s total yearly income must have been up to INR 5 crores or less. If your turnover exceeds this limit, you will no longer be eligible for the program starting next quarter.
• Your last GSTR-3B return that was due should have been submitted.
• You should not have any data saved in Form GSTR-1 in the portal for the time frame you specify for the scheme. You can choose the plan after wiping the Form GSTR-1’s recorded data.

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How to avail the QRMP scheme

• Visit the GST portal to opt-in or out of the QRMP scheme.
• Select Login →Services → Returns.
• Next, select the option to opt-in for quarterly returns.

Payment of taxes under the QRMP scheme

You must submit Form PMT-06 and create a payment challan to pay taxes for the first two months of a quarter. Every month’s payment is due by the 25th of the following month. 

There are two payment options available:

• Fixed-sum approach

If your most recent GSTR-3B was filed quarterly, you could obtain a pre-filled challan for 35% of the tax amount (paid in cash) from the previous quarter. However, you cannot access the 35% challan if you are a new taxpayer, have not submitted your most recent GSTR-3B, or have chosen to forgo the Composition plan.

If your most recent GSTR-3B was submitted every month, you could obtain a pre-filled challan for the entire tax amount (paid in cash) in the final month of the preceding quarter.

• Self-evaluation technique

It is the current approach where a taxpayer can pay the tax due by considering the tax due on both inbound and outbound supply and the available input tax credit.

The taxpayer must manually calculate their monthly tax obligation and submit form PMT-06 with the payment. For establishing the amount of ITC available for the month, the taxpayer might use form GSTR-2B.

There are also other circumstances where no deposit may be necessary, such as:

• For the first month of the quarter, either the electronic cash/credit ledger balance is sufficient to cover the tax bill for that month, or there is no tax liability.
• For the second month of the quarter, either there is enough money in the computerised cash/credit ledger to cover the total taxes owed for the first and second months, OR there are no taxes owed.

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Before the ITR filing process, there are many documents you need to keep in handy. Form 16A is one among them.

What is Form 16A?

Form 16A is a document every employer of an organisation maintains for its employees. The document states the income sources of the employee and is more like a TDS(Tax Deducted at Source) certificate.

However, Form 16A shows TDS deducted and deposited on all other payments except salary.

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The Components of Form 16A 

The Form 16A means a document comprising many components, and they are:

1. Deductor’s Name, PAN and TAN: The deductor can be:

• The bank deducting your TDS 
• The insurance company from where TDS is applicable
• A person or place from whom you receive income on which TDS is applicable

2. Deductee’s Name and PAN- the deductee can be an individual who receives TDS benefits
3. Payment details such as: 

• Payment date
• Payment amount 
• Nature of payment

4. TDS payment’s receipt number

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How to Fill Form 16A?

1. Enter the Deductor’s name and address, including their PIN (Postal Index Number).
2. Fill in the Deductor’s TAN (this is an alphanumeric number with the first four digits in alphabets and 5 in digits, and 1 in alphabets).
3. You will also need to enter the Deductor’s PAN (an alphanumeric number with the first four in alphabets, five in digits, and one in alphabets).
4. Enter the data for four acknowledgement numbers.
5. The type of payment follows, whether contractual, professional or otherwise.
6. Enter the corresponding codes for all payments mentioned.
7. The name of the deductee.
8. Enter the PAN number of the deductee in the specified column.
9. Enter the period, which will be the fiscal year. For example, the fiscal year will run from 1 April 2019 to 31 March 2020.
10. After you’ve completed all of these fields, you’ll need to enter the TDS deduction information.
11. State the TDS amount in words.

How to Get Form 16A?

Usually, the deductor issues the form 16A document to an employee for the current financial year and reflects the following:

1. Total earnings
2. Total income taxes deducted for that financial year from other sources of income apart from your salary

You can get the form 16A document by following the below steps:

1. Navigate to the online website of the income tax department.
2. Download the form 16 A document either in the fillable form or pdf.

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When is Form 16A Required?

A “TDS Certificate.” is issued by a deductor when payments from non-Salary incomes are made like – TDS Professional fees, Rent, and Bank Interest payments to the IT Department.

As it carries all amounts of TDS deposited with the Income Tax Department, the form 16A document acts like a TDS certificate. Therefore, when filing Income Tax returns, you need all these details in Form 16A.

In earlier times, tax-paying used to be a manual job. An individual or a company had to pay their taxes at their respective banks, and then the Income Tax Department would collect the taxes through the banks. This process was quite difficult, and there was a lot of cheating involved. Many times, people or companies would pay incorrect taxes. Hence, the government was constantly functioning at a loss.

To overcome this issue, the government introduced the Online Tax Accounting System or OLTAS in 2004. The system is adopted to minimise human intervention, reduce genuine or deliberate errors, and provide online information on taxes collected or deposited. 

The OLTAS system made it easy for layperson to fill their taxes and for the government to collect them. The system provides a single copy of a Challan, which helps taxpayers to track the status of the taxes filed online. 

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3 types of ITNS challans:

1. Challan ITNS 280: This challan is issued when income tax, including self-assessment tax, advance tax, and regular assessment tax, is paid. 
2. Challan ITNS 281: This challan is issued when Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) are deposited. 
3. Challan ITNS 282: This challan is issued for payment of Gift Tax, Wealth Tax, Estate Duty, Expenditure Tax, etc.

A TDS challan is a document that deposits taxes deducted at source (TDS) with the government. The challan records taxpayer details, the tax amount, and the period for which the tax has been deducted.

What is TDS Challan 281?

A challan is a formal receipt that confirms a payment. As per the Income Tax Act of 1961, businesses must deduct TDS before paying an individual or entity’s income. 

For instance, if a business pays a contractor Rs. 2 lakh, they must first deduct Rs. 20,000 (10% TDS) and then pay Rs. 1,80,000 net.

The taxpayer who received the income should deposit the TDS to the income tax department using Challan 281.

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Process of Filing Challan ITNS 281

The two methods for submitting Challan 281 are:

Online Mode

• Visit the tin-nsdl website and choose Challan No./ITNS 281. 
• The following information must be entered into Challan 281 at the time of tax payment:

1. Choose the Deductees: Choose the correct deductee, or the person from whose account the payment has been taken. 

There are two possibilities: 

0020: Company deductee

0021: Non-company deductees

2. Assessment Year (AY): The appropriate AY for which the payment is paid. 

For instance, if the payment is made on June 30, 2018 (i.e., it relates to the fiscal year 2018–2019), the appropriate AY will be 2019–20.

3. Tax Deduction Account Number (TAN): TAN is a 10-digit alphanumeric number given to those who must deduct or collect taxes.

4. Payment Method: 

• If the TDS/TCS is a routine transaction, 200 should be chosen.
• If you are paying for a demand made by the income tax authorities, you should choose 400.

5. Kind of Payment: Choose the category for which TDS/TCS has been subtracted from the drop-down list.

6. Payment Information: Include the income tax, surcharge, and late filing penalties (if applicable), time and bank branch.

After entering all the necessary information, click “submit to bank,” and you will be redirected to the payment page.

A challan counterfoil with the CIN number, payment information, and bank name to make the e-payment is visible when a transaction is completed successfully.

Offline Mode

For the offline procedure, the taxpayer can make the payment by going to the bank in person and submitting a challan.

There are two payment options: cash or cheque.

As proof of submission, the bank will issue a counterfoil receipt after receiving the challan.

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Penalties for late TDS payments 

If you do not pay your TDS on time, or you do not file your tax return on time, you will have to pay a fine. This fine is called an interest payment and depends on the type of delay:

• Delayed TDS deduction: 1% of the monthly TDS, or a portion thereof
• Delay in repaying the TDS that was deducted – 1.5% of the TDS per month, or a portion of it.
• TDS return filing delay – According to the TDS amount, Rs 200/day is allowed. Additionally, if the delay lasts for a year or longer, the fine may range from Rs. 10,000 to 1 lakh.

Check Challan 281 status

Deductors can verify the status of Challan 281 online or offline using the CIN number or the TAN number.

CIN based View

1. Visit the TIN-NSDL website and go to Services.
2. Select OLTAS > Challan Status Inquiry
3. Go to “For Taxpayers” and select the CIN-based View.
4. Enter the challan serial number, cash or cheque deposit date, collecting bank branch’s BSR code, challan tender date, and the total amount shown on the counterfoil.
5. Enter the captcha code and select View to check the status.

TAN based View

1. Visit TIN-NSDL website and go to Services
2. Select OLTAS > Challan Status Inquiry
3. Go to “For Taxpayers” and select the TAN-based View.
4. Enter the TAN number, tender challan date, or deposit date.
5. Enter the captcha code and select View to check the status.

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Senior persons have the right under 80TTB to claim a greater deduction for interest income generated on deposits. It is intended to assist elderly persons in maintaining a good living after retirement, as many rely on their interest income money for these costs. The goal is to provide significant assistance to elderly persons so that they may retain a respectable economic position after retirement and therefore promote a happy existence and a healthy livelihood. This article will explain Section 80TTB of the Income Tax Act.

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What is 80TTB

This Section functions as an enhanced version of Section 80TTA, as the tax deduction on interest income, has been increased from INR 10,000 to INR 50,000.  Budget 2018 included a new section 80TTB to the Income Tax Act, allowing seniors to deduct certain interest income from their taxable income. A resident individual who is 60 years of age or older during the fiscal year is referred to as a senior citizen under the Income Tax Act. Section 80TTB allows a senior person to deduct up to Rs 50,000 from total interest income received during a fiscal year from gross total income generated during that fiscal year before tax is deducted.

• Where an assessee’s gross total income as a senior citizen includes any income from interest on deposits with

• A financial firm subject to the Financial Regulation Act, 1949 (10 of 1949) (which includes any bank or banking institution specified in section 51 of that Act);
• A co-operative banking society (which may include a co-operative land mortgage bank or a co-operative land development bank); or
• A Post Office as specified in subsection (k) of section 2 of the Indian Post Office Act of 1898. (6 of 1898),

In determining the assessee’s total income, a deduction shall be granted in line with and subject to the requirements of this section—

• If the entire amount of such revenue does not exceed fifty thousand rupees;
• In all other cases, the amount is 50,000 rupees.

• There shall be no deduction from the total income of any partner or member of the firm, any member of the association, or any individual member of the body in the case where the income mentioned in sub-section (1) is derived from any deposit held by or on behalf of such firm, an association of persons, or body of individuals under this section in respect of such income.

‘In this section, a “senior citizen” is defined as a person living in India who is sixty years old or older at any point during the previous year’

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80TTA vs 80TTB

When opposed to Section 80TTA, Section 80TTB provides significantly more benefits to older persons. Section 80TTA is similar to Section 80TTB in some ways, however, it only allows for interest deductions on savings accounts kept in a bank, co-operative bank, or post-office.

The amount mentioned is INR 10,000 from the individual taxpayer’s or Hindu Undivided Family’s gross total income (HUF). As a result, it was open to anybody, regardless of age, who had a deposit. However, once Section 80TTB went into effect in the fiscal year 2018-2019, the advantages of Section 80TTA were no longer available to elderly persons. Section 80TTB is reserved for elderly persons alone; older citizens no longer have access to Section 80TTA. 

The following contrasts between the two parts are discernible.-

• Eligibility

Section 80TTA: Applicable to individual taxpayers and HUF Hindu Undivided Family and Not applicable to resident senior citizen taxpayers

Section 80TTB: Applicable only to resident senior citizen taxpayers

• Maximum Amount of Deduction

Section 80TTA: Rs 10,000 or the actual amount of interest income, whichever is lower

Section 80TTB: Rs 50,000 or the actual amount of interest income, whichever is lower

• Type of Interest Income

Section 80TTA: Interest on savings accounts; does not apply to fixed deposits, term deposits, or recurrent deposits.

Section 80TTB: Interest on deposits, including fixed deposits and savings bank account balances; does not apply to bonds or non-convertible bonds. Interest income as a percentage of a firm’s equity, AOP, and BOI are not covered. Such a business, AOP, or BOI, holds the deposit.

• Type of FD Accounts

Section 80TTA: Includes NRO account and NRI account interest income

Section 80TTB: Not applicable to any type of NRI account

Deduction Under Section 80TTB Of Income Tax Act (Person Eligible, Types Of Income, Maximum Amount)

Not all interest income is deductible. Section 80TTB imposes several limitations and eligibility requirements that must be met in order to reap the advantages.

• Personal Eligibility

An elderly citizen who is a resident of India is eligible for a deduction under section 80TTB. For the purposes of section 80TTB, a senior citizen is a resident individual taxpayer who is over the age of 60 at any point during the fiscal year. Senior citizens having non-resident status (NRI) will not be eligible for this deduction.

• Types Of Income

Interest income generated on deposits by a senior citizen is deductible under section 80TTB. Deposits should be made with one of the following institutions:

• A co-operative society engaged in banking business (this includes a co-operative land development bank or a co-operative land mortgage bank);
• A post office that comes under section 2 (k) of the Indian Post Office Act.
• A financial institute (i.e. a bank) that comes under the Banking Regulation Act (this includes banks referred to in section 51) 

Section 80TTB (2) specifies expressly that interest income generated on savings accounts maintained by a firm, an Association of Persons (AOP), or a Body of Individuals (BOI) is not deductible under section 80TTB for partners of the business, members of the association, or an individual of the BOI.

• Maximum Amount 

The maximum deduction allowed according to section 80TTB is as follows:

• The entire interest income earned during the fiscal year, or INR 50,000

In plain terms, if the amount of eligible interest income is less than INR 50,000, the whole amount of eligible interest income is deductible. However, if the interest income exceeds INR 50,000, only INR 50,000 can be deducted under section 80TTB.

80TTB Deduction for FY 2020-21

The deduction is up to Rs.50,000 in light of the interest earned on elderly persons’ savings. Senior citizens who have FDs, savings accounts at banks, cooperative banks, and post offices who earn interest on their deposits are entitled to the section 80TTB deduction. Individuals can continue to use the old/current tax system in FY 2020-21 by making use of current deductions and tax exemptions. He or she might also choose the new, more favourable tax system without claiming any deductions or tax exemptions. 

Among the tax benefits that are forfeited when one chooses to participate in the new tax regime are deductions under Section 80C for a maximum of Rs 1.5 lakh claimed by investing in specified financial products, Section 80D for health insurance premiums paid, Section 80TTA/80TTB for a deduction on savings account interest earned from a bank or post office, and so on. As a result, taxpayers who choose the new tax system will be unable to make use of the deduction allowed under sections 80TTA and 80TTB.

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FAQs on Section 80TTB

1. How do I apply for a deduction under Section 80TTB?

You can claim the 80TTB deduction by completing your income tax return. The income must first be reflected in your income before the 80TTB deduction can be claimed.

2. Is FD interest included in 80TTB?

Yes, section 80TTB includes an interest in FDs. Senior citizens may deduct interest earned on fixed deposits under section 80ttb.

“No revision has been made to the existing income tax slabs in the recently announced Union Budget 2022″

Taxes are collected on its inhabitants by governments to produce money for initiatives that increase the country’s economy and enhance residents’ standard of living. The Government’s ability to charge taxes in India is derived from the Indian Constitution that gives Central and State governments the right to levy taxes.

In this post, we cover income tax in India, Indian tax types & income tax slabs.

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Basics Of Income Tax Act India

Income tax is a levy applied by the government on an individual’s earnings. It is a direct tax whose liability cannot be transferred to another party. In India, income tax is controlled by the Income Tax Act, 1961. Each financial year, income tax is levied at the slab rates specified in the Union budget. It is assessed differently for different types of persons, including individuals, partnership firms, and corporations. According to income tax, the major sources of income are as follows:

• Salary, income from house property (rent); business or profession profits and gains; capital gains income; and other sources of income

Income tax allows for a variety of deductions from income before calculating the tax due. Income tax returns must give a detailed accounting of a person’s earnings and the income tax owed. An income tax return is a declaration that details a person’s status, all sources of revenue, deductions, and finally, the tax payable or refund (if any). There are several sorts of returns available for each type of person.

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Types of Taxpayers

A taxpayer is an individual or corporate entity that owes taxes to the federal, state, or municipal governments. Individual and corporate taxes are a significant source of revenue for governments.

The Income Tax Act categorizes taxpayers in order to apply different tax rates to various taxpayer classes.

Taxpayers are categorized as below:

• Individuals, Hindu Undivided Family (HUF), Association of Persons(AOP), and Body of Individuals (BOI)
• Firms/Companies

Additionally, individuals are divided between residents and non-residents. Individuals who are residents of India are required to pay tax on their worldwide income, which includes money generated both in India and overseas. Non-residents, on the other hand, are only required to pay taxes on income earned or accrued in India. For tax reasons, each financial year’s residence status must be established individually based on the duration of the stay in India. For tax reasons, resident individuals are further divided into the following categories:

• Individuals less than 60 years of age
• Individuals aged more than 60 but less than 80 years
• Individuals aged more than 80 years

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Income Tax Slabs – The New Tax Regime

A new tax regime is applicable from FY 20-21 with reduced tax rates and no deductions/exemptions will be available to individuals and HUFs. Individuals and HUF have the choice of continuing with the current regime or switching to the new regime. The new tax regime is elective, and the decision should be made at the time the ITR is filed. If the old regime is maintained, the taxpayer may claim all applicable deductions/exemptions. The new tax regime has the following income tax brackets:

Income Tax Slab in lakhs	New Regime Income Tax Slab Rates FY 2020-21
(Applicable for All Individuals & HUF)
Rs 0.0 – Rs 2.5	NIL
Rs 2.5 lakhs- Rs 3.00	5% (tax rebate u/s 87a is available)
Rs. 3.00 lakhs – Rs 5.00
Rs. 5.00 lakhs- Rs 7.5	10%
Rs 7.5 lakhs – Rs 10.00	15%
Rs 10.00 lakhs – Rs. 12.50	20%
Rs. 12.5 lakhs- Rs. 15.00	25%
>Rs. 15	30%

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Tax Slab Exceptions

Always remember that not all income is subject to slab taxes. This regulation does not apply to an exemption from capital gains income. Capital gains are taxed according to the kind of asset and the duration of the asset. The duration of the holding time of an asset influences whether the asset is regarded to be long-term or short-term. In addition, the time necessary to determine the type of asset is different from one asset to the next. The holding periods, asset classifications, and tax rates for each investment are given in the table below.

Capital asset	Holding period	Rate
House Property	Long Term – More than 24 months.Short Term – less than 24 months.	20%
Debt mutual funds	Long Term – More than 36 months.Short Term – less than 36 months.	20%
Equity mutual funds	Long Term – More than 12 months.Short Term – less than 12 months.	Dispensable (until 31 March 2018) Gains over Rs 1 lakh taxable at 10% 15%
Shares (STT paid)	Long Term – More than 12 months.Short Term – less than 12 months.	Dispensable (until 31 March 2018) Gains over Rs 1 lakh taxable at 10% 15%
Shares (STT unpaid)	Long Term – More than 12 months.Short Term – less than 12 months.	20%
FMPs	Long Term – More than 36 months.Short Term – less than 36 months.	20%

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Types of Taxes in India

Oftentimes, the tax system is made up of both direct and indirect charges.

Direct taxes are the ones you pay directly to the government. These taxes cannot be transferred to another company or person since they are imposed directly on individuals. This tax handled by the Department of Revenue is governed by the Central Board of Direct Taxes (CBDT).

Several of the most significant direct taxes are as follows:

• Income tax
• Wealth tax
• Gift tax
• Capital Gains tax
• Securities Transaction tax
• Corporate tax

Indirect taxes are levies that are indirectly placed on the general population. The majority of these are levied through the sale of products and services. These taxes are included in the prices charged by the vendor, and they are subsequently collected by the appropriate government agencies.

Some important Indirect taxes include:

• Sales tax
• Goods and Services tax
• Value Added Tax (VAT)
• Customs duty
• Toll tax
• Octroi duty

In India the central government introduced the Good and Services Tax (GST) in 2017, to incorporate a few taxes in one blanket. GST is a multi-stage location tax that is levied from the acquisition of raw matter to the sale of the final product and then to the end customer at each level of the supply chain. Typically, when there is value-added and ownership transfer in the supply, GST will apply. Some of the taxes replaced by GST are:

• Sales tax
• Service tax
• Octroi
• Central Excise duty
• Entertainment tax
• Purchase tax

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FAQs about income tax

What is total gross income?

A taxpayer’s total revenue from all the revenue categories is referred to as Gross Total Income

Can I file income returns even if my income is below taxable limits?

Yes, even though your income is smaller than the basic exemption level, you can file the return of income voluntarily

Should I divulge in return all my income, even if it is exempt?

Yes. Revenues from all sources including exempt revenues must be revealed. The same might be indicated in Schedule EI.

Will my income be taxed if I’m a farmer?

Any revenue earned by agriculture or its associated activities shall not be taxed. However, when computing a tax for any non-agricultural income that you may have, it will be evaluated for tax purposes.

Who may get a Section 87A rebate?

Any resident Indian whose total yearly income is less than Rs. 5 lakh can claim reimbursement under Section 87A. The highest discount allowed under 87A is Rs. 12,500.

What is TAN full form?

Full form of TAN is Tax Deduction and Collection Number .

What is TAN Application Form 49B

Form 49B is the application individuals can use to apply for a new Tax Deduction and Collection Number (TAN). The form is available at any TIN facilitation centre for receiving e-TDS returns. A new TAN application, Form 49B, can be made by visiting the Income Tax department or creating an online application at the Income Tax official website.

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Types of TAN Application

Applications for allotment and applications for change are the two categories of TAN applications.

Applications for allotment of new TAN are available on nsdl website, or one can download them to submit offline. The processing fee is Rs. 55 + 18 % GST.

Applications for change or correction of TAN have a processing fee of Rs. 63 + service tax. For this, details like 10-digit TAN number, address, nationality, and PAN details are necessary.

Guidelines For Filling Application Form 49B

The applicant must carefully complete Form 49B, which contains many sections, for the TAN application to be accepted.

Following are some considerations the applicant should make when filling out Form 49B:

• Form 49B must only be filled out in capital letters in English to make the entries readable.
• The tax deductor or collector must provide information about the assessing officer. You can get these facts from the Income Tax Office if they are unavailable.
• Every text field on the form should have one letter entered for easier reading and comprehension.
• The tax collector or deductor must additionally provide information about the region, area code, district, etc. Before filling out Form 49B, the Income Tax Office can be contacted to get more information.
• A gazetted officer, a notary, or magistrate must certify the signature if the form is signed with the left-hand thumbprint.
• The left thumb impression is only accepted from applicants for TAN. The acknowledgement form printed must be signed by applicants who fall under another “category of deductors.”
• Complete the fields on Form 49B. Any portions that are left empty or unfinished are not taken into account.
• The individual in charge of tax filing and submission must set down their title.
• The applicant must provide a valid Indian address.

The Income Tax Department checks the information after form 49B has been completed and submitted. If the application appears complete and accurate, Protean eGov Technologies Limited will notify the applicant of the new TAN information at the address listed on Form 49B or, if the application was submitted online, by email.

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Tan acknowledgement slip

The acknowledgement slip must be provided to Protean eGov Technologies Limited after the TAN application has been filed successfully. The duly executed acknowledgement slip should be sent to:

Protean eGov Technologies Limited

5th Floor, Mantri Sterling 

Plot No.341, Survey No.997/8,

Model Colony, Near Deep Bungalow Chowk, Pune – 411016

Protean eGov Technologies Limited must receive the acknowledgement slip and required documents within 15 days of the online application. TAN application processing will only begin after receipt of the signed acknowledgement and payment is confirmed.

Payment For Availing TAN  

To apply for a new TAN, applicants must pay Rs.65 (Rs.55 application charge + 18% of Goods and Services Tax). 

The applicant can make the payment through any of the following modes:

• Demand draft
• Cheque
• Credit card/Debit card
• Online banking

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Required Documents for TAN Application

When submitting a TAN application, the applicant is not needed to provide any supporting documentation. If they submit their request for a new TAN online, they only need to include the acknowledgement slip and the demand draft.

Contact TDS

The following ways can be used to contact Protean eGov Technologies Limited representatives for more information:

• Dial 020-27218080 for PAN/TDS Call Centre or 020-27218081 for faxes.

• Send an email to tininfo@nsdl.co.in.

• To find out the status of the TAN application, SMS the NSDLTANacknowledgement number to 57575.

• Write to: Protean eGov Technologies Limited, Fifth Floor, Mantri Sterling, Plot 341, Survey 997/8, Model Colony Near Deep Bungalow Chowk, Pune 411016
  

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Introduction to Company Income:

Before learning about tax rates and how they are determined, we need to know about the types of income a company makes. It is as follows:

1. Profits generated by the business firms
2. Capital Gains
3. Revenue from property rental
4. Other sources of income include dividends, interest, and so on.

A corporation is a legal entity distinct from its stockholders. Under the Income-tax Act, both domestic and international corporations are required to pay corporate tax. The domestic corporation is taxed on its total income, a foreign corporation is taxed only on income gained within India, that is, income accruing or receiving in India.

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Corporations established under the Companies Act, 1956, and foreign companies producing income in India are subject to the corporate tax rate imposed on their “net income,” which is defined as the amount of money they make after deducting their expenses.

A company earns profit from various sources, including sales, capital gains, commissions, and rent. The government relies heavily on the taxation of these earnings.

Income tax is distinct from corporate tax where corporate tax is levied on an individual’s earnings. As with income tax, corporations are entitled to minimize the taxable amount through several deductions and exemptions.

Additionally, the company tax rate is frequently revised globally. Similarly, India’s statutory corporate tax rate was reduced to 22% from 30% in 2019. However, the 22% tax rate is available solely to domestic corporations that do not seek tax exemptions.

The rates have been updated and lowered to assist companies in development. The corporate can concentrate on business expansion and capital enhancement when they have a significant share of the profits in their possession.

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How to Calculate Corporate Tax

India has one of the world’s highest corporate tax rates, but the actual tax rate varies by industry and sector. Whether domestic or international, a corporation is required to pay CIT according to the country’s 1961 Income Tax Act. Unlike resident companies, non-resident (foreign) companies are only taxed on income received, earned, or deemed to be sourced in India.

The term ‘Corporate Tax’ meaning is the taxes paid by businesses on their income. The income tax divides companies into two categories –

• Domestic Business
• A foreign business

Domestic corporations are taxed on their entire income, whereas international companies are taxed on only India’s income received/accrued. The term “domestic company” and “foreign corporation” are defined in the following section of the Income Tax Law.

A domestic firm is an Indian corporation or any other corporation subject to tax under the Income Tax Act that has made necessary arrangements for the declaration and payment of dividends (including dividends paid on preference shares) within India, payable from the said income.

A foreign firm is simply one that is not a domestic one.

Corporate tax in India is the tax levied on the profit earned by registered firms under the Companies Act, 2013, throughout a financial year. The profit of these companies shall be taxed at a fixed rate subject to modification according to the government’s discretion. The revenue earned by the corporation is evaluated and calculated differently from the income calculation for individuals.

Net income is another name for the profit earned from the business over a financial year. You can obtain net income from the entire revenue by deducting the overall expenses. The total expenditure includes the cost of goods sold and other costs such as rent, wages, interest, etc. Total revenue includes revenue plus commissions and capital gains.

The equation and calculation for corporate tax are provided here. The value of company tax is calculated by multiplying the entire profit/net income of a corporate unit by the applicable tax rate.

Corporate tax payable = Net profit obtained under the country’s tax standards × applicable tax rate

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Corporate Tax Rates on Different Companies

Type of company	New tax rate for companies	Additional advantage
Companies claiming no exemptions or incentives pay 22% plus relevant cess and surcharge.	The effective rate is 25.17%.	These businesses are not required to pay a Minimum Alternative Tax.
Companies claiming exemptions or incentives	30 percent	Minimum Alternative Tax decreased to 15% from 18.50 percent.
New manufacturing companies	Decreased by 15% from the previous level by 25%	These new manufacturing enterprises must be formed by October 2019 and begin operations by March 2023.

Corporate Tax Rates for Domestic Corporations in India

Corporate tax is levied on domestic enterprises for the financial year 2019-20 based on their annual revenue. The rates are the following:

Gross Turnover	The rate of taxation
Up to Rs. 250 Crore	25% of the total
Over Rs. 250 crore	30%

• If the company’s yearly revenue reaches Rs. 1 crore in a financial year, a surcharge of 7% shall be applied to such firms. If the income surpasses 10%, the tax shall be 12%.
• A 4% cessation of health and education and a business tax on domestic firms are applied.
• If a domestic corporation has an overseas branch, the same rate is applied to the corporation’s total earnings, domestic and foreign. Therefore it is essential to remember that corporate tax planning in India also considers the foreign earnings of domestic enterprises.

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Corporate Taxation of Foreign Corporations

A firm not of Indian origin and management is located entirely outside India. These companies are not registered under the Companies Act, 2013. For these enterprises, therefore, the tax structure differs from domestic companies. For foreign companies, the taxation system focuses on the Indian and foreign corporations’ tax agreements.

Income	Taxation
Any royalty or charge for technical services obtained by a foreign business from an Indian concern or government prior to April 1, 1976.	50%
Any other sources of income	40%

When the income lies in between Rs. 1 crore and Rs. 10 crores, a surcharge of 2 per cent is payable on the total income. If it surpasses ten crores, a 5% surcharge is applicable.

Corporate Income Tax Rebates

The income tax legislation has numerous provisions that allow rebates and discounts to businesses when determining their corporate tax liability. Several significant rebates and deductions include the following:

• Domestic corporations may deduct a portion of their interest revenue from their profit for corporate tax purposes.
• If the corporation has invested in new infrastructure or sources of energy, those costs are deducted.
• The corporation may carry forward losses for up to eight years.
• If a domestic business gets a dividend from some other domestic company.
• The capital gains earned by enterprises are not taxed.
• Deductions are permitted in certain circumstances for exports and new ventures.

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FAQs on Corporate Tax

Q1. What is the distinction between individual income tax and corporate income tax?
Ans. Individuals are taxed on their income. But, the corporate tax is charged on the profits of businesses that are constituted under the Companies Act, 2013, or any preceding company law.

Q2. What about the MAT (Minimum Alternate Tax)?
Ans. MAT is mandated under Section 115JB of the Act and has been in place for decades. The goal of MAT is to tax businesses at either the MAT rate on book profit or the taxation on taxable income, whichever is greater. MAT was originally 18.5 per cent of book profits but has been cut to 15 per cent.

Corporate taxpayers opting to exercise 115BAA or 115BAB are exempt from the application of MAT under these rate modifications.

Q3. Which businesses prefer to gain the most from the corporate tax rate changes?
Ans. Existing domestic enterprises with less than INR 4,000 million in revenue profit are relatively less because their income tax rate is reduced from 26-29 per cent to 25.17 per cent. Still, they also lose the benefits of some special exemptions or deductions.

New manufacturing businesses formed after 1 October 2019 profit from these reforms, as they qualify for a considerable tax rate reduction.

Large domestic corporations also benefit from the adjustments in corporate tax rates, as they can now choose a rate of 25.17 per cent rather than the prior range of 31-35 per cent.

Q4. Is corporate tax based on gross revenue?
Ans. No, after payment of interest on debts, corporate tax shall be computed on net earnings.

80TTA is an interest income deduction section of the income tax act that is available to resident individuals and Hindu United Families (HUF). Section 80TTA talks about the interest income deduction of INR 10,000. In this article we’re going to take a deeper look at section 80TTA, all its effects, how do you claim it and what other measures need to be kept in mind. 

What is interest income and which interest income is considered in section 80TTA? What is considered interest income 80TTA deduction for AY 2020-21

Section 80TTA of the income tax act talks about the interest income earned through various sources and the deduction that can be claimed while filing for taxes. The deduction allowed under section 80TTA is capped at INR 10,000 and it includes income only received through interest. Any other income cannot be clubbed under this section. 

However, not all interest income is included under this head. Interest income only from particular sources can be available for section 80TTA deduction. Some of the examples from where interest income can be deducted are:

• Interest income earned from a savings bank account 
• Interest income earned from a cooperative society carrying on the business of banking 
• Interest income earned from the savings bank account in a post office 

These are the various sources from where the interest income earned is available for deduction under section 80TTA. For example, interest income earned from bonds that you bought either personally or for the business is not included for deduction under section 80TTA. This is just one of the examples wherein the interest income is not included. Some other examples of where interest income is not included under section 80TTA are: 

• Interest income earned from fixed deposits 
• Interest income earned from recurring deposits 
• Interest income earned from any other time deposits 

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What is the minimum and maximum deduction allowed under section 80TTA of the income tax act? 

For the 80TTA deduction for AY 2020-21, the maximum deduction allowed is INR 10,000. There is no minimum deduction that is required under section 80TTA. The interim budget in the year 2019 had increased the amount of deduction to INR 40,000 however that’s been changed and for ay 2020-21 the maximum deduction is back at INR 10,000. In case the interest income is lower than INR 10,000 then the amount of the interest income earned will be the amount for the deduction. However, in case the interest income is more than INR 10,000 the permissible amount is only INR 10,000. One cannot claim more than INR 10,000 even if their interest income is more. 

The amount mentioned in interest income has to be combined with all the interest earned from all the banks. The amount isn’t just dedicated to a single bank account, but the interest income earned throughout all the different bank accounts held. 

Example of interest income earned under section 80TTA 

Before we further discuss the examples that need, one must know that all the interest income needs to be included under the head of ‘income from other sources. All of this needs to be considered in the total return and then the interest income deduction needs to be considered for section 80TTA. 

Let’s say for example Ms Nirali Mehta earns INR 15,00,000 from the business. Her income from other sources is interest income on a savings account at INR 10,000 and interest income on fixed deposits at INR 15,000. 

First, the entire sum of INR 15,000 + INR 15,000 needs to be included under the head of income from other sources. This is what it should look like 

Particulars	Amount in INR	Amount in INR
Income from salary		10,00,000
Income from other sources
Savings account	15,000
Fixed Deposits	15,000
Total income from other sources		30,000
Gross Total Income		10,30,000
Deduction under Chapter VI-A
Deduction under 80C	15,000
Deduction under 80TTA	10,000	25,000
Taxable Salary		10,05,000

Even though the interest income earned in the year is INR 15,000 the deduction that Ms Nirali Mehta can receive under section 80TTA is only INR 10,000. This is because the maximum deduction available under section 80TTA is INR 10,000. Therefore, post the income from other sources and considering the deduction for the same under 80C and 80TTA the final taxable salary is INR 10,05,000. 

Is it necessary to disclose the interest income earned and what are the consequences of not paying for it? 

Yes. According to the Income Tax Act, every individual or Hindu united family (HUF) must disclose all the income earned through the different sources and streams of investment for the particular year that they are filing the taxes for. 

By not disclosing the income earned, the individual or the Hindu united family (HUF) can be exposed to a penalty that they have to pay and may also have to pay interest on the amount of tax that is not paid. This is everything that one needs to know about section 80TTA of the income tax act. 

What is Section 80TTB under the Income Tax act? 

Section 80TTA under the income tax act is for residents and individuals under the age of 60. To cater to the senior citizens, the interest income earned by them comes under section 80TTB of the income tax act. Most of the rules that apply to section 80TTA are the same rules that apply to section 80TTB. This is, the interest income earned from a savings account either from a bank, post office or co-operative society carrying business for the bank is eligible for deduction under section 80TTB. 

The only difference which is the biggest difference is that under section 80TTA, the maximum amount available for deduction is INR 10,000. However, under section 80TTB the maximum amount that is available for deduction is INR 50,000. This means that if a senior citizen earns around INR 50,000 through interest income, the entire amount is available for deduction, as against the INR 10,000 allowed under section 80TTA. 

This is the only major difference between Section 80TTA and Section 80TTB under the income tax act of 1961. 

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FAQs about deductions under section 80TTA

1. What is the section of 80TTA under the income tax act for?
Ans: Section 80TTA is the tax that needs to be paid on the interest income earned from savings bank accounts or from savings accounts held with the post office.

2. Who can avail for deduction under section 80TTA of the income tax act?
Ans: Individual residents and Hindu United Families (HUF) are the ones who can avail of deduction under section 80TTA of the income tax act.

3. What is the maximum deduction allowed under section 80TTA?
Ans: The maximum deduction one can claim under section 80TTA of the income tax act is INR 10,000. Any income greater than INR 10,000 needs to be taxed. The sum can be lower than INR 10,000. There is no rule or compulsion on that.

4. When is the due date for section 80TTA deduction for AY 2020-21?
Ans: The Income Tax Return due date has been extended from 31st July to 2021 to 30th September 2021. This means section 80TTA for AY 2020-21 can be filled during the same time too.

5. What is the difference between Section 80TTA and Section 80TTB under the income tax act?
Ans: While both, section 80TTA and Section 80TTB cater towards the income earned through interest, section 80TTB is catered towards senior citizens. Since section 80TTB is catered towards senior citizens, the amount that is available for deduction is also higher.

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