GuideforITR1(SARALII)AY201011

Guide for Preparation of Income Tax Return- ITR1 (SARAL-II) for AY 2010-11
Overview TheExcelsoftwarehasafeaturetohelpinthecomputationofTaxandInterestandhelpsinthefilling upoftheIncomeTaxReturninpreparationforelectronicfilingofthereturnforAY201011.Thisguide takestaxpayerthroughthestepstocomputeTaxandInterestLiability,tocomputeBalanceTaxpayable forthepurposeofpaymentofSelfassessmenttax,andthereaftertocompletethereturnandsubmit thesame. Theoverallstepsinvolvedare a) ComputationofIncome b) ComputationofTaxandInterest c) PaymentofbalanceTaxPayable(Selfassessmenttax),ifany,andrecomputationofInterestto verifythatthereisnobalanceTaxPayable. d) Generationofxmlfileandelectronicfilingofreturnathttp://incometaxindiaefiling.gov.in. A) ComputationofIncome. FillupthereturnwithdetailstodetermineIncome.Forthispurposethefollowingmaybekeptreadily available: a) Form16GivingdetailsofSalaryIncomeandTaxDeductedatSource(TDS)fromEmployer b) RentalIncomedetails(alongwithForm16AincaseanyTaxhasbeendeducted)andStatement ofInterestpaidonHousingloanfromBank c) InterestofFD,SavingsBanketcdetails(alongwithForm16AincaseanyTaxhasbeendeducted) d) Lifeinsurance/healthinsurancepremium,donationreceipts e) TaxpaymentchallansandTDScertificates f) Departmental excel software that can be downloaded from the website http://incometaxindiaefiling.gov.in Takecaretoenteraccurateandcompletedetailsof a) PAN b) DateofBirth c) Gender d) Status e) ResidentialStatus f) Address(Refunds,ifany,oranyothercommunicationwouldbesenttothisaddress) g) Bankaccountnumber(theBanknumberismentionedontherefundordercheque) a. InSlno1ofITR1,EnterIncomeunderSalary b. InSlno2ofITR1,EnterIncome/lossfromHouseProperty c. InSlno3ofITR1,EnterIncome/lossfromOtherSources d. The software will compute Gross Total Income (Salary income + House Property Income + IncomefromOtherSources)inSlNo4. e. InSlnos5ato5l,Enterdetailsofeligibledeductionsof80C,80D,80Getc.Entertheclaimsinthe greencells.ThesystemwilllimittheclaimsbasedontherulesforDeductionsunderthevarious DirectorateofIncomeTax(Systems) Page1of6

GuideforITR1(SARALII)AY201011 sections, and will display in yellow fields, the maximum allowed deduction for the particular assesseeandincomefigures. For ex: The aggregate deductions in respect of claims under Section 80C, 80CCC and 80CCD cannot exceed Rs.1,00,000. However, for certain deductions, which depend on factors not ascertainablebythesystem,thetaxpayerhastoensurethattheclaimismadeaspertheactual condition. For ex: Higher claims for Deductions u/s 80DD are allowed for severe disability, hencetheassesseemustentertheclaimbasedonthelevelofdisability. f. B) ThesoftwarewillcomputeTotalallowabledeductioninSlno6andTotalIncome(Finaltaxable incomeafterreducingallallowabledeductions)inSlno7. TaxComputation a. EnterdetailsofTDSonSalaryasperForm16givenbyEmployeronlyinSlno23.Pleaseensure thatTDSfromallemployersisenteredseparatelywithVALIDTANineachcase.ThetotalofTax deducted(Col7)isincludedincomputationoftotalTDSautomatically. b. EnterdetailsofTDSonInterestorRentalsetcasperForm16AgivenbyBank,TenantonlyinSl no24.PleaseensurethatTDSfromalldeductorsisenteredseparatelywithVALIDTANineach case.TheTDSamountshouldbementionedinCol6.Typicallythesamevaluehastobeentered inCol7.PleasenotethatthetotalofTDSAmountclaimedforthisyear(Col7)isonlyincluded incomputationoftotalTDS. c. Enter details of Advance Tax and Self Assessment Tax paid in Sl no 25. To arrive at Quarterly AdvanceTaxpaymentsandSelfAssessmentTaxpaidandtherespectivetotals,thesoftwarewill refertotheDateoftaxpaymentandtheAmountpaid. d. Oncompletionofabove,thetotalsofadvanceandselfassessmenttaxpaymentsandTDSwill automaticallybecalculatedinSlnos16a,16cand16brespectively. e. TotaltaxespaidwillautomaticallybecalculatedinSlno17. f. EnterdetailsofReliefsclaimedu/s89duetoarrearsinSalaryinSlno11onlyiftheReliefhas beencomputedandprovidedbySpecifiedEmployerinForm10E. g. EnterdetailsofReliefsclaimed90/91duetoDoubleTaxationAgreementsinSlno12. Clickon"CalculateTax" Basedondetailsenteredabovethesoftwarewillthenautomaticallycalculatethefollowing: a) TaxpayableonTotalIncome(Slno8) b) EducationCess(IncludingSecondaryandHigherSecondaryEducationCess)(Slno9) c) TotalTaxandEducationCessPayable(Slno10) d) Balance Tax Payable (Sl no 13) which is determined after reducing values of Relief under Section89(Slno11)andReliefunderSections90/91(Slno12). e) Total Interest Payable U/s 234A/ B/C (Sl no 14) in case there is any delay in filing of return (234A),shortfallintaxespaidascomparedtotaxpayable(234B),ordefermentoftaxespaid (234C) f) Total Tax and Interest Payable (Sl no 15) which is the total due from taxpayer including tax andinterest. DirectorateofIncomeTax(Systems) Page2of6

GuideforITR1(SARALII)AY201011 C) PaymentofSelfAssessmentTax After completing steps above, refer to Sl no 18, Tax Payable. If this amount is positive, it implies that afteradjustingalltaxespaidbytaxpayerthereisstillsomeoutstandingtaxtobepaidbytaxpayer.The same has to be paid as Self Assessment Tax before filing the Return. The relevant details have to be addedtotheTaxPaymentSchedule(Slno25)aftermakingnecessarypayments. OncetheBalanceTaxPayableisdeterminedandthesameispaidasmentionedabovethen: UpdateSlno25forTaxpaymentdetailswiththisamount, RecalculateTaxandInterestbyclickingontheCalculateTaxbuttonasexplainedabove. Once again refer Sl no 18 and if taxpayer has paid the exact amount of balance Tax Payable as Self Assessment Tax, then there should now (after recalculation) be no positive amount in balance Tax Payable. Please note if there is substantial gap (if date spills over to next month), between the dates duringearliercalculationandtheactualSelfAssessmenttaxpaymentdate,thentheinterestcomputed figures may vary and there may be a residual balance Tax Payable even after payment of Self AssessmentTax.Therefore,careshouldbetakentoensurethatSelfAssessmenttaxpaymentismade withinthesamemonth. Incasetaxpayerhasoverpaidtaxes,thenRefundvalue(Slno19)willbepositive. The refund will be issued against the Name and Bank Account Number (Sl no 20) and sent to the AddressasmentionedintheReturn,incasetaxpayerselectstoreceivetherefundbyChequeinSlno 21.IftaxpayerselectstoreceivetherefundbyDirectDepositintotheBankAccountinSlno21,then provideadditionalinformationoftheMICRCodeoftheBankBranchinSlno22. Eveniftaxpayerdoesnotexpectanyrefund,itisadvisedtoenteratleasttheBankAccountNumber inallcases, sothat the Department cansend aRefundOrder cheque,incaseofadeterminationof Refund(due to acorrect application ofprocessing rulesin taxpayercase), without havingtosend a communicationseekingthisadditionalinformation. Note: Thecriticaldatesusedincomputationare: a) ExpectedDateoffilingofreturn(canbethesameasdateuptowhichInterestistobecalculated in 3 below). This date is used for calculation of 234A Interest, if any. By default, the software uses the higher of the SYSTEM date or Date of verification as entered by taxpayer in the verificationportionoftheReturn. b) Due date of filing return. Typically, the due date for filing of Corporate returns and Returns whereprovisionsofSection44ABareattractedis30thSeptemberandinallothercasessuchas Salariedtaxpayers,theduedateforfilingis31stJuly. c) DateuptowhichInterestistobecalculated(usuallythedateonwhichSelfAssessmentTaxis paid or is expected to be paid). This date is used for calculation of 234B Interest, if any. By default,thesoftwareusesthehigheroftheSYSTEMdateorDateofverificationasenteredby taxpayerintheverificationportionoftheReturn.

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GuideforITR1(SARALII)AY201011 If any error is made in data entry in the return in any of the filled in values, such as Gender, Date of Birth,Status,ResidentialStatus,PAN,TotalIncomeorDeductions,thecomputedtaxfigureswilldiffer from what is expected. Taxpayer may rectify any of these, and once again recalculate Tax as per B) above.Thiscanberepeatedasmanytimesasdesired. D) Generationofxmlfile a. Aftercompletingallstepsabove,savetheExcelfile. b. ThenclickonGenerateXMLbutton. c. ThexmlfileisgeneratedandsavedbydefaultinthesamedirectoryorlocationwheretheExcel fileissaved. d. The xml file (NOT the excel file) has to be uploaded to the efiling website of the Income Tax Departmenthttp://incometaxindiaefiling.gov.inafterlogginginasaregistereduser. Beforeuploadingthexmlfileforelectronicfilingpleaseensurethat: a) ThePANintheexcelfileandUserIDintheefilingwebsitearethesame. b) TheselectedFormTypeisITR1. c) TheassessmentyearisAY201011 Aftersuccessfullyuploadingthexmlfile,anITRV(IncomeTaxVerification)formisgeneratedbythe website. The taxpayer should print out two copies of Form ITRV. One copy of ITRV, duly signed by the taxpayer,hastobesentbyordinaryposttoIncomeTaxDepartmentCPC,PostBagNo.1,Electronic CityPostOffice,Bangaluru560100(Karnataka)immediately.Theothercopymayberetainedbythe assesseeforhisrecord. Disclaimer: Theutilityisageneralpurpose,simpletaxandinterestcalculationtoolfortheassistanceoftaxpayers. Theutilityhasbeenpreparedbasedontheprovisionsoflawanddoesnottakeintoaccountanyspecial conditionsthatmayaffectanyspecifictaxpayer.Further,theresponsibilitytoconformtoprovisionsof theIncomeTaxAct1961continuestovestwiththetaxpayerandheshouldensurethatnoclaimis madewhichisnotasperlawirrespectiveofthefactthatthesameisnotprecludedinthecalculation aspertheutilityowingmerelytotheconstructandconstraintoftheForm.Anycalculationoftaxand/ or interest as per this utility is subject to the final determination of tax and / or interest during the processing of the return as per Section 143 (1) and other sections of the Income Tax Act 1961 by the Departmentandmayaccordinglyvary.

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GuideforITR1(SARALII)AY201011

HowtocomputeIncomefromSalary(Incaseofmultipleemployersreplicateitems1to6foradditionalemployersandcalculateTotal) NameofEmployer1: 1 Salary(Excludingallallowances,perquisites&profitinlieuofsalary) fromForm16 1 2 Allowancesexemptundersection10(nottobeincludedin 2 Salary) 3 Allowancesnotexempt 3 4 Valueofperquisites 4 5 Profitsinlieuofsalary 5 6 TaxableSalaryfromEmployer1(1+3+4+5) 6 TobementionedinItem1ofITR1ReturnForm TotalSalaryIncome HowtocomputeIncomefromHouseProperty 1 HouseProperty a Annualletablevalue/rentreceivedorreceivable(IfSelfOccupiedenter0) 1a b Theamountofrentwhichcannotberealized 1b c Taxpaidtolocalauthorities(Watertax,PropertyTaxetc) 1c d Total(1b+1c) 1d e Balance(1a1d) 1e f 30%of1e(Enter0if1eisnegative) 1f InterestpayableonHousingLoan(RestricttoRs1,50,000 1g g ifSelfOccupied,norestrictionifpropertyisLetOut) h Total(1f+1g) 1h i Incomefromhouseproperty1(1e1h) 1i 2 IncomeundertheheadIncomefromhouseproperty a Rentofearlieryearsrealizedundersection25A/AA 2a b Arrearsofrentreceivedduringtheyearundersection25Bafterdeducting30% 2b TobementionedinItem2ofITR1ReturnFormTotalIncomefromHouseProperty(2a+ 2b+1i) Pleaseincludetheincome,ifany,ofspecifiedpersonssuchasminorchildrenwhilecomputingtheincomeunderthishead,if NOTE propertyisintheirname HowtocomputeIncomefromOtherSources(IncaseofmultipleFDinterest&interestfromsavingsaccountfillthetotalinitem1b) 1 Incomeotherthanfromowningracehorse(s): a TaxableDividends,Gross 1a b Interest,Gross 1b Rentalincomefrommachinery,plants,buildings,etc., c 1c Gross d Others,Gross 1d e Total(1a+1b+1c+1d) 1e f Deductionsundersection57: i Expenses fi ii Depreciation fii iii Total fiii g Balance(1e1fiii) 1g TobementionedinItem3ofITR1ReturnFormTotalIncomefromothersources(1g) Pleaseincludetheincome,ifany,ofspecifiedpersonssuchasminorchildrenwhilecomputingtheincomeunderthishead,if NOTE FD,recurringdepositetcisintheirname. HOUSEPROPERTY OTHERSOURCES SALARIES

HowtocomputeExemptIncome(IncomenottobeincludedinTotalIncome) 1 Interestincome 2 Dividendincome 3 LongtermcapitalgainsonwhichSecuritiesTransactionTaxispaid 4 NetAgricultureincome(notexceedingRs.5,000) 5 Others,includingexemptincomeofminorchild 6 TobementionedinItem27ofITR1ReturnFormTotal(1+2+3+4+5) 1 2 3 4 5 6

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EXEMPT INCOME

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GuideforITR1(SARALII)AY201011

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