News | Tax

CBDT issues ITR forms for Assessment Year 2021-22

12.The Central Board of Direct Taxes has notified income tax return forms for the assessment year 2021-22 with no significant changes, keeping in view the ongoing Covid pandemic crisis. 
 
The forms will provide taxpayers the chance to opt for filing returns under the new tax regime – which excludes all exemptions and deductions while giving flat rates of income tax – and the existing tax regime, as reported by The Economic Times.
 
 “Besides the choice between the regimes, taxpayers need to report quarterly dividend income earned in FY 2020-21 in order to comply with advance tax provisions similar to how advance tax is calculated and paid on capital gains," said Archit Gupta, chief executive officer of Cleartax, a portal used for tax filing. 
 
ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are simpler Forms that cater to a large number of small and medium taxpayers. Sahaj can be filed by an individual having income upto Rs. 50 lakh and who receives income from salary, one house property or other sources. These forms include declaration of bank deposits of more than Rs 1 crore, expenditure of over Rs 2 lakh in foreign travel and expenditure on electricity bills of more than Rs 1 lakh in the previous year. 
 
Similarly, Sugam can be filed by individuals, Hindu Undivided Families (HUFs) and firms other than limited liability partnerships having total income upto Rs. 50 lakh and income from business and profession computed under the presumptive taxation provisions. 
 
Individuals and HUFs not having income from business or profession (and not eligible for filing Sahaj) can file ITR-2 while those having income from business or profession can file ITR Form 3. Persons other than individual, HUF and companies, which are partnership firms, LLPs can file ITR Form 5. 
 
Companies can file ITR Form 6. Trusts, political parties, charitable institutions etc. claiming exempt income under the Act can file ITR-7.
 

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Changes in Our Business Model
 
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • The investools will have to be reworked and will offer model portfolios. We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder