ITR REGISTRATION PROCESS

Registration

Registration helps in creating a user account in the e-Filing portal. Taxpayer needs to register on the e-Filing website to leverage the services such as filing ITR, tax deducted details, refund status and so on. Briefly, taxpayer can track all tax-related activities on this website.
Select the Taxpayer's user type to register on e-Filing

Individual

Prerequisite

Before taxpayers start registration, ensure the following details should be hand-in-hand.

• Valid PAN
• Valid Mobile Number
• Valid Current Address
• Valid Email Address, preferably your own

Persons Incompetent to Register

Minor, lunatic or idiot and those who are barred by Indian Contract Act, 1872

Registration Process

Perform the following steps to register as a 'Individual User':

Step 1	Visit the 'e-Filing' Portal www.incometaxindiaefiling.gov.in
Step 2	Click 'Register Yourself' button located at right side of the Home Page.
Step 3	Select the user type as 'Individual' ⇒ Click Continue
Step 4	Provide the following basic details: PAN Surname, First Name and Middle Name Date of birth Residential Status
Step 5	Click 'Continue'
Step 6	Fill in the following mandatory details: Password Details Contact Details Current Address Click 'Submit'
Step 7	After registration, For Residents, a six digit OTP1 and OTP2 will be shared on your mobile number and email ID, specified at the time of registration. For Non-residents, OTP will be shared on your primary email ID, specified at the time of registration.
	Enter the correct OTP to complete the registration process Prerequisite The user must have the following mandatory details: Valid PAN Card Valid Mobile Number Valid Email Address, preferably belonging to KARTA* Karta means senior most male member in the family. He is the person who takes care of day to day expenses of the family looks after the family and protects the joint family properties. No outsider or stranger can become a Karta. Registration Process Perform the following steps to register as a 'HUF User': Step 1 Visit the 'e-Filing' Portal www.incometaxindiaefiling.gov.in Step 2 Click 'Register Yourself' button located at right side of the Home Page. Step 3 Select the user type as 'HUF' ⇒ Click Continue Step 4 Provide 'PAN of the HUF*', 'Name of HUF*', and 'Date of Incorporation *' Step 5 Click 'Continue' Step 6 Fill in the following details: Password Details PAN Details of Karta Contact Details of Karta Address of HUF Click 'Submit' Step 7 After registration, For Residents, a six digit OTP1 and OTP2 will be shared on your mobile number and email ID, specified at the time of registration. For Non-residents, OTP will be shared on your primary email ID, specified at the time of registration. Step 8 Enter the correct OTP to complete the registration process

What is Goods and Services Tax (GST)?

GST stands for “Goods and Services Tax”, and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. Its main objective is to consolidates all indirect tax levies into a single tax, except customs (excluding SAD) replacing multiple tax levies, overcoming the limitations of existing indirect tax structure, and creating efficiencies in tax administration.

Simply put, goods and services tax is a tax levied on goods and services imposed at each point of sale or rendering of service. Such GST could be on entire goods and services or there could be some exempted class of goods or services or a negative list of goods and services on which GST is not levied. GST is an indirect tax in lieu of tax on goods (excise) and tax on service (service tax). The GST is just like State level VAT which is levied as tax on sale of goods. GST will be a national level value added tax applicable on goods and services.

A major change in administering GST will be that the tax incidence is at the point of sale as against the present system of point of origin. According to the Task Force under the 13th Finance Commission, GST, as a well designed value added tax on all goods and services, is the most elegant method to eliminate distortions and to tax consumption.

One of the reasons to go the GST way is to facilitate seamless credit across the entire supply chain and across all States under a common tax base. It is a tax on goods and services, which will be levied at each point of sale or provision of service, in which at the time of sale of goods or providing the services the seller or service provider can claim the input credit of tax which he has paid while purchasing the goods or procuring the service. This is because they include GST in the price of the goods and services they sell and can claim credits for the most GST included in the price of goods and services they buy. The cost of GST is borne by the final consumer, who can’t claim GST credits, i.e. input credit of the tax paid.

Example: A product whose base price is ₹ 100 and after levying excise duty @ 12%value of the product is ₹ 112. On sale of such goods VAT is levied @ 12.5% and value to the ultimate consumer is ₹ 126. In the proposed GST system on base price of ₹ 100 CGST and SGST both will be charged, say @ 8% each, and then the value to the ultimate consumer is ₹ 116. So, in such a case the industry can better compete in global environment.

Therefore, GST is a broad based and a single comprehensive tax levied on goods and services consumed in an economy.

In particular, it would replace the following indirect taxes as these will be subsumed in the proposed GST:

At Central level

• Central Excise Duty
• Service Tax
• Additional Excise Duties
• CVD (levied on imports in lieu of Excise duty)
• SAD (levied on imports in lieu of VAT)
• Excise Duty levied on Medicinal and Toiletries preparations,
• Surcharges and cesses
• Central Sales Tax

At State level

VAT/Sales tax

Entertainment tax (unless it is levied by the local bodies)

Luxury Tax

Taxes on lottery, betting and gambling

Entry tax not in lieu of Octroi

Cesses and Surcharges

Taxes/Duties Likely to be subsumed in GST

Central Taxes/Levies	State Taxes/Levies
Central excise duty under Central Excise Act, 1944	Sales Tax/Value Added Tax (VAT)
Additional excise duties – Under Additional Duties of Excise (Goods of Special Importance Act, 1957	Entertainment tax
Excise Duty under Medicinal & Toiletries Preparation Act, 1955	State excise duty
Service Tax under Finance Act, 1994	Luxury tax
Additional Customs Duty (Countervailing Duty – CVD)	Taxes on lottery, betting & gambling
Special Additional Duty of Customs (SAD)	Entry tax (not in lieu of Octroi)
Surcharges (e.g. national calamity contingent duty)	Purchase tax
Cesses (e.g., Cess on rubber, Cess on tea etc)	State Cesses
Central Sales tax (to be phased out)	State Surcharges

Taxes/Duties not likely to be subsumed in GST

Central Taxes/Levies	State Taxes/Levies
Basic Customs Duty	Taxes on Liquors
Excise Duty on Tobacco products	Toll Tax/ Road Tax
Export Duty	Environment Tax
Taxes on petroleum products	Property Tax
Stamp Duties	Purchase tax on food grains
Specific Central Cess like Oil Cess etc	Taxes on motor spirit & high speed diesel
	Tax on Consumption or Sale of Electricity – Not certain
	Stamp Duty – Not certain

Basics of Income Tax for Beginners

Paying your income tax for the first time is a milestone in any citizen’s life. However, the process can seem too daunting and tedious for a first-timer, and some of the terms tend to go right over your head. This needn’t be so. To help you understand the tax implications of your income (based on your income source), here is a compilation of basics of income tax for beginners.

1. Basics of Income Tax for Beginners
2. Defining the ‘Previous year’
3. Assessment Year
4. Understanding your Salary
5. Income on which you pay Tax?
6. Deductions
7. Make Section 80C your best friend
8. TDS or Tax deducted at source?
9. Calculating Tax Payable
10. Standard Deduction
11. Illustration on salary TDS

1. Basics of Income Tax for Beginners

Are you just out of college and looking for a job? Or have you already landed the job and are going to file your income tax returns for the first time? If nitty-gritty of income tax and investments confuse you, ClearTax is here to help. Our aim at ClearTax is to simplify Income Taxes for you and make your financial lives easier. Basically, anybody with an income is liable to file income tax returns. Today we bring to you the basics of Income Tax you’ll need to equip yourself with and this should help you take a confident first step into your job.

2. Defining the ‘Previous year’

Previous year or the financial year or your tax year is the 12 month period that begins on 1st April and ends on the 31st March of the next year. No matter when you start your job, your tax year closes on 31st March and a new tax year starts on 1st April. So, it is important to plan your taxes for each financial year.

3. Assessment Year

It is a term you’ll often hear in relation to tax filing. It is the financial year after the previous year in which you will ‘assess’ and file your return for the previous year. So, assessment year is 2019-20 for the previous year 2018-19.

Assessment year is the year in which you will file your return for the previous year. For instance, if you start your job on 1 January 2019, your tax year closes on 31 March 2019. 2018-19 is your previous year and your AY is 2019-20. The last day to file your return is 31 August 2019.

4. Understanding your Salary

When you start your job – reach out to your payroll or HR department and get your Salary details/ Pay Slip / Tax Statement. Here, you will get an idea of the major components of your salary and how much tax will be deducted from your salary based on them.

5. Income on which you pay Tax

Besides the salary income you receive, you may be earning an income from several other sources. Your Total Income is the sum total of all heads of income below.

Sources of Income

Income from Salary	Salary, Allowances, Leave encashment basically all the money you receive while rendering your job as a result of your employment agreement
Income from House Property	Income from house or building, this may be owned and self-occupied or may be rented
Income from Capital Gain	Income from gain or loss when you sell a capital asset
Income from Business or Profession	Income/loss that arises as a result of carrying on a business or profession
Income from Other Sources	This is the residual head - includes your income from savings bank accounts,fixed deposits,family pension or gifts received

6. Deductions

Deductions reduce your Gross Income. These are the amounts Income Tax Department allows you to reduce your Income, bringing down your tax liability.

Sum of All heads of Income = Gross Income Gross Income – Deductions = Taxable Income

The more you make use of the deductions allowed, the lower your tax shall be. Deductions are allowed under section 80 of the Income Tax Act (Section 80C to 80U).

7. Make Section 80C your best friend

Section 80C can take off INR 1,50,000 from your Gross Income. Given below are some of the widely-used investment vehicles under this section.

a. PPF

One of the most popular deductions under 80C is deposits to Public Provident Fund or PPF. When you open a PPF account, you need to deposit a minimum of INR 500 and a maximum of INR 1,50,000 in a year. Money deposited in a PPF account compounds, as you deposit more money in the subsequent financial years to claim deductions. PPF is a traditional and safe saving avenue to park your hard earned money. A PPF account can be easily opened with a bank.

b. Tax-saving FD

Fixed deposits assure capital protection as well as a sizable interest income for investors. To get tax benefits under 80C, you need to stay invested for at least 5 years. It is safe, but the Interest Income from it is taxable.

c. Tax-saving mutual funds or ELSS

One of the only mutual fund scheme allowed under 80C, ELSS (Equity Linked Savings Scheme) is gaining popularity among people for its historically higher performance in the recent years. Another perk of ELSS is that it has the lowest lock-in period of 3 years.

8. TDS or Tax deducted at sourceTDS is Tax Deducted at Source – it means that the tax is deducted by the person making payment. The payer has to deduct an amount of tax based on the rules prescribed by the income tax department. For instance, An employer will estimate the total annual income of an employee and deduct tax on his Income if his Taxable Income exceeds INR 2,50,000. Tax is deducted based on which tax slab you belong to each year. Similarly, if you earn interest from a Fixed Deposit, the bank also deducts TDS. Since the bank does not know your tax slabs, they usually deduct TDS @ 10%, unless you haven’t mentioned your PAN (in that case a 20% TDS may be deducted).

9. Calculating Tax Payable

On your Taxable Income, tax slabs or rates are applied and final tax payable is calculated. From this tax payable, you can reduce all the TDS that has already been deducted.You can always use our Tax Calculator!

10. Standard Deduction

As per the Budget 2018, salaried employees are entitled to a standard deduction of Rs 40,000 from the gross salary. This standard deduction will replace the medical reimbursement amounting to INR 15,000 and transport allowance amounting to Rs. 19,200 in a financial year. Effectively, the taxpayer will get an additional income exemption of Rs 5,800. The limit of Rs. 40,000 has been increased to Rs. 50,000 from FY 2019-20 onwards in the Interim Budget 2019.

11. Illustration on salary TDS

Aditya is a 25-year-old software engineer living in Mumbai. He spends his free time enjoying his new found financial freedom. This is his first job and he’s clueless about tax or savings. But it’s almost the end of January and Aditya heard his friends talking about Section 80C and how they pay zero tax thanks to Section 80C. Aditya earns Rs 6,60,000 annually. Here are his salary details.

Salary components	Monthly	Annually
Basic salary	30,000	3,60,000
House Rent Allowance	15,000	1,80,000
Special Allowance	10,000	1,20,000
Total		6,60,000

Aditya looked up his pay slip and found out that his employer has been deducting a TDS on his salary of Rs 2,988 each month. This shall work out to Rs 35,860 for the whole year. While Aditya has been busy enjoying his new life he has no clue how much tax he needs to pay and whether he can save any tax!

Let’s help him!

Aditya should first find out his total income from all sources. Besides salary income, Aditya has earned savings bank account interest of Rs 2,500. He found this amount in his bank statement. His father had forced him to put aside Rs 50,000 in fixed deposit and from his online FD statement, he found out he will earn an interest of Rs 3,500 on this FD until 31st March 2020. Aditya is not sure whether any TDS has been deducted on his interest income – so he looks up his Form 26AS. Form 26AS has the details of all the tax deducted and deposited against Aditya’s PAN. He found TDS of Rs 2,988 deducted by his employer each month until January. Here is Aditya’s total Income:

Aditya’s Total Income
Income from salary		Rs 6,60,000
Income from other sources		Rs 6,000
Savings Bank account interest	Rs 2,500
Fixed Deposit interest	Rs 3,500
Gross Total Income		Rs 6,66,000
Tax deducted or TDS till the end of January 2020 (Rs 2,988*10)		Rs 29,880

Aditya also revealed he lives in a rented accommodation in Mumbai along with 4 other roommates and his share of rent is Rs 10,000. If Aditya can organize rent receipts from the landlord and get his PAN number, he can claim an exemption on HRA. If Aditya can submit the rent receipts well in time, to his employer – his employer will be able to adjust his tax calculations.

Aditya’s HRA exemption
HRA exemption shall be least of the following:
HRA received (A)	Rs 15,000
50% of the basic salary	Rs 15,000
Rent paid less 10% of the basic salary	Rs 7,000
HRA exempt (lower of the above) (B)	Rs 7,000
HRA taxable (A)-(B)	Rs 8,000

Now let us see Aditya’s revised tax calculation.

Tax calculation for Aditya
Income from salary		Rs 5,76,000
Basic salary	Rs 3,60,000
Taxable portion of HRA	Rs 96,000
Special allowance	Rs 1,20,000
Income from other sources		Rs 6,000
Gross total income		Rs 5,82,000
Deduction under section 80C		Rs 1,50,000
Deduction under section 80TTA		Rs 2,500
Total income		Rs 4,29,500
Tax payable		Rs 8,975
Less: Rebate under section 87A (for total income up to Rs 5 lakh)		Rs 8,975
Tax payable		Nil

Did you notice! If Aditya can manage to claim Rs 1,50,000 under section 80C – no tax shall be payable by him on account of rebate claimed under section 87A. With this deduction, his taxable income does not exceed Rs 5 lakh which is eligible for rebate under section 87A for the AY 2020-21. However, Aditya has to file an income tax return because his gross total income is above the basic exemption limit of Rs 2.5 lakh. Also, Aditya can claim a refund of the TDS of Rs 29,880 which has been deducted on his income.

Aditya claims Rs 1,50,000 under section 80C. Deduction on Section 80C is available for PF @12% of Basic Salary, its Rs 43,200 for him. Since this is already deducted from salary, he simply needs to consider this amount – no additional payout is required. Aditya wants to try his hands in equities and finds the market returns promising so he invests Rs 50,000 in ELSS. He opens a PPF account and deposits Rs 57,580 – all of these add up to Rs 1,50,780. The amount of deduction eligible under section 80C is limited to Rs 1,50,000. Accordingly, Aditya claims a deduction of Rs 1,50,000 under section 80C.

Deduction under section 80C available to Aditya
EPF contribution @ 12% of basic salary	Rs 43,200
Subscription to ELSS	Rs 50,000
Contribution to PPF	Rs 57,580
Total	Rs 1,50,780
Deduction eligible	Rs 1,50,000