Tax returns checklist: Your one-stop guide
Finance
Which form to file?
Salaried employees
Form 1 - Income < INR 50 lakhs and own one house and no taxable capital gains
Form 2 - Income > INR 50 lakhs, co-own a house/own more than one house, and/or taxable capital gains
Business owners
Form 3 or 4 - Depending on the nature of income and other conditions, individuals, Hindu Undivided Families (HUFs), small businesses or professionals
Form 5 - Limited Liability Partnerships (LLPs)/ Limited Liability Companies (LLCs)
Form 6 - Companies
Form 7 - Trusts and societies
*Capital gain is denoted as the net profit that an investor makes after selling a capital asset exceeding the price of purchase. Examples of capital assets include property, shares of a company, mutual fund investments.
House Rent Allowance (HRA) and Section 80GG
You can claim HRA up to INR 60,000 a year, If you:
live on rent and don't own property in that city,
are self-employed, or
have not received any HRA component from your employer
The least of the following three amounts can be deducted under Section 80GG:
INR 5,000 per month or INR 60,000 a year
The yearly rent amount minus 10% of the taxpayer’s adjusted total income
25% of the adjusted total income for a year
You can fill out Form 10BA along with your ITR. PAN of the rented property’s owner is mandatory if the amount of rent exceeds INR 1 lakh in any given financial year.
How much total Tax Deducted at Source (TDS) has been paid by your employer?
Check out your Form 26AS on the income tax e-filing website.
Form 26AS is your TDS passbook. All taxes that are deducted and deposited against your PAN by your employer, bank or any other entity, any advance tax and self-assessment tax deposited by you against your PAN, is reflected in your Form 26AS.
Ensure that details on Form 26AS match with details on Form 16.
How to use Form 16?
Form 16 is basically your “Salary/Income Certificate” that is issued by your employer.
For most salaried people, Form 16 helps wonderfully when it comes to filing taxes with the IT department; however, ensure that details match with Form 26AS. In the case of discrepancies, the IT department will rely on Form 26AS.
Also, don’t forget to update details on interest income, profit/loss from financial market transactions, and other details you didn’t give your employer.
Old vs new tax regime
For the first time, taxpayers will get an option to choose between the old and new regime while filing their taxes. Once you move to the new regime, you cannot go back to the old regime.
While the new regime does have lower tax rates, there are no exemptions and deductions allowed under the new regime.
The tax is levied on the whole of your income and thus, if you are someone who has invested and spent under these exemptions and deductions, it is wise to calculate your liability under both regimes and then decide which one is actually more beneficial.
Old regime: Exemptions and deductions
*Standard deduction refers to a flat INR 50,000 (FY20-21) deduction allowed to salaried people
**Uniform allowance: special allowance in India, for the expenses incurred in purchasing and maintaining the uniform to be worn to the employment of profit/office
Interest on delayed tax payment
While the deadline for tax filing for AY 2021-22 (FY 2020-21) has been extended to September 30 due to COVID-19, the deadline for paying self-assessment tax*, which is July 31, 2021, has not been extended.
Anyone with a tax liability of more than INR 10,000, has to pay advanced tax. Interest of 1% per month is levied on total tax liabilities in the absence of advance tax payment as per schedule.
* Self-assessment tax is the tax that is paid in a case where your tax liability is greater than the sum of advance tax, tax deducted at source, etc.
Facial recognition technology in post-pegasus India
Technology
With the revelation of the spy software Pegasus being used for surveillance in India, where a person’s every move can be tracked even when legally performing their day-to-day activities, how do we feel about agencies tracking our faces and remembering them daily?
Facial Recognition Technology (FRT) has also been floated as an option for identification and authorization for administering vaccines in India.
What are the implications here? Is it a big deal if your facial data is being recorded?
How does facial recognition work?
FRT is based on artificial intelligence (AI) model that learns what various human faces look like and assigns a unique digital signature to each face it can understand. The next time it sees a face, it extracts various data points from the face, creates a new signature and tries to match it to the existing signatures in its database. Based on a certain threshold of match, it then updates its database with the latest face of the person to accommodate factors like changes in facial measurements, ageing, etc.
Current status of FRT in India
A total of 64 FRT systems have already been installed in India today, with Telangana, Maharashtra and Tamil Nadu leading the numbers. FRTs at a state and central level today are mostly being used for identification/authorization (eg: CBSE, Pune airport) and security/surveillance purposes (eg: Hyderabad and Mumbai police).
Data protection laws in India
Based on storing large volumes of image data of various people, FRT raises questions on privacy and mandates a policy/law around the usage of such sensitive data.
European Union accounts for FRT data in General Data Protection Regulation (GDPR) guidelines and multiple states in the USA ban the usage of facial image data for FRT. India has no data protection laws around facial recognition.
The IT Act, 2000 which largely governs the 'Digital India' campaign falls short in terms of guaranteeing Indian users’ privacy.
How secure is UIDAI data?
The UIDAI (Unique Identification Authority of India) database stores the largest volume of biometric data in the world, so if the government plans to link the FRTs to UIDAI data, the safety of the data is a major concern.
Multiple security researchers have pointed out that third parties which end up using this data can serve as weak links in exposing sensitive information to hackers. A similar incident happened with Facebook where the data of 553 million people was breached due to a third-party loophole.
FRTs: Bias and scalability
The effectiveness of FRT scalability remains questionable. It is a known fact that FRTs perform poorly for darker skin tones and in lower lit areas, give better results for men, and do not understand the gender non-binary yet.
In India, if the data that we use to train an FRT model is based on Aadhaar data, out of the 1.25 billion people that are said to own Aadhaar cards, not everyone’s picture is taken with proper lighting. We also have no transparency regarding how well these systems perform for various demographics.
FRT shows promise
Provides huge value in detecting and preventing terrorist activity, safeguarding human lives and property
Acts as triggers to report incidents like rape, molestation, theft and accidents and notify the nearest first response teams immediately
If employed correctly, can prevent the transmission of viruses while administering vaccines in a pandemic-stricken world by making the process no-touch
Can help find missing persons, find the presence of a person’s face on pornographic sites and even help diagnose certain diseases
Is this the right time for FRT in India?
Do we want to give the government the power of mass surveillance and tracking every move of ours when an act of bad faith has been committed by the same with Pegasus software?
How do you ‘unsubscribe’ from surveillance within your legal right to privacy other than covering your face? A fundamental question comes up: Why am I under surveillance when I am doing perfectly legal activities like grocery shopping?
Data breaches, discrepancies and biases
A data breach can trigger the Deepfake industry where it is now very easy to use your face to superimpose on another human’s in a picture or a video. Think revenge porn, exploitation and extortion.
If the output of these FRTs shows discrepancies between various user demographics, we naturally exclude portions of our population if this ends up being used in activities like vaccination drives.
There might be bias in the very definition of ‘terrorists’, ‘molesters, ‘thieves’ which might lead to people being tagged unfairly.
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