December 14, 2018

Income Tax Returns

Income Tax Return(ITR)

This is one of very much important topic and person frequently asked questions about Income Tax Return, let us discuss about Income Tax Return.

It is mandatory for every taxpayer to communicate the details of his income to the Income-tax Department, for this he needs to file in the prescribed forn which is known as return of income.

In this part, you can gain knowledge about the various provisions relating to return of income.

Who is to file the Income Tax Return ?

The provisions related to filling of return is depend upon the status of the person :

a) In case of Company:

  • Every company is to file its return irrespective of its profit or loss, in other word every person being a company has to file its return compulsorily.

b) In the case of partnership firms:

  • Every person, being a partnership firm (including Limited Liability Partnership), has to file its return of income compulsorily, irrespective of its income being profit or loss.
  • It is mandatory for every partnership firm to file the return of income irrespective of its income or loss.

c) In the case of an Individual/HUF/AOP/BOI/Artificial Juridical Person:

  • Every individual / HUF/AOP/ BOI/artificial juridical person has to file the return of income
  • if his total income (including income of any other person in respect of which he is assessable)
  • without giving effect to the provisions of section 10(38), 10A, 10B or 10BA or Chapter VIA (i.e., deduction under section 80C to 80U), exceeds the maximum amount which is  not chargeable to tax i.e. exceeds the exemption limit.

d) In the case of charitable or religious trusts:

  • Every person in receipt of
    • income derived from property held under charitable or religious trusts/legal obligations or
    • in receipt of income being voluntary contributions referred to in section 2(24)(iia),
  • has to file the return of income if its total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to income-tax.

e) In the case of political parties:

  • The Chief Executive Officer of every political party has to file the return of income of the party if the total income of the party without giving effect to the provisions of section 13A exceeds the maximum amount not chargeable to income-tax.

f) In the case of certain associations :

Following entities are liable to file the return of income if their total income without giving effect to the provisions of section 10 exceeds the maximum amount not chargeable to tax:

  •  Research association referred to in section 10(21)
  •  News agency referred to in section 10(22B)
  • Association or institution referred to in section 10(23A)
  •  Institution referred to in section 10(23B)
  •  Fund/institution/trust/university/other educational institution/any hospital/medical institution referred to in sub-clause (iiiad), (iiiae), (iv), (v), (vi) or (via) of section 10(23C)
  •  Mutual Fund referred to in clause (23D) of section 10
  •  Securitisation trust referred to in clause (23DA) of section 10
  •  Venture capital company or venture capital fund referred to in clause (23FB) of section 10;
  •  Trade union/association referred to in sub-clause (a) or (b) of section 10(24)
  • Body/authority/Board/Trust/Commission referred to in section 10(46)
  •  Infrastructure debt fund referred to in section 10(47)

 

g)  In the case of certain university, college or other institution:

  • Every university, college or other institution referred to in clause (ii) and clause (iii) of section 35(1), which is not required to furnish return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.
  • In the case of Business Trust Every business trust, which is not required to furnish return of  income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective   of income (or) loss.

h)  In case of investment fund referred to in section 115UB

  • Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions, shall furnish the return of income in respect of its income or loss every year irrespective of income (or) loss.

i) In the case of persons holding assets located outside India:

A person, being a resident in India (other than not ordinarily resident), who is not required to furnish a return under any of the above `and who at any time during the previous year :

(a) holds, as a beneficial owner (*) or otherwise, any asset (including any financial interest in any entity)                             located outside India or has signing authority in any account located outside India; or

(b) is a beneficiary (*) of any asset (including any financial interest in any entity) located outside India, shall                      furnish, on or before the due date, a return in respect of his income or loss for the previous year in such                          form and verified in such manner and setting forth such other particulars as may be prescribed. However,                    above discussed provision will not apply to an individual, being a beneficiary of any asset (including any                        financial interest in any entity) located outside India where, income, if any, arising from such asset is                             includible in the income of the person referred to in (a) above.

(*) “Beneficial owner” in respect of an asset means an individual who has provided, directly or indirectly,                            consideration for the asset for the immediate or  future benefit, direct or indirect, of himself or any other                        person.

(*) “Beneficiary” in respect of an  asset means an individual who derives benefit from the asset during  the                          previous year and the  consideration for such  asset has been provided by any person other than such                             beneficiary.

 

Income Tax Return is the form in which an assessee files information about his Income and tax thereon to the              Income Tax Department

Benefits of Filing ITR

  • Proof of your income
  • On the basis of Income Tax Returns, one can gets loan very easily
  • If there is losses you can carry forward your losses if you file Income Tax Return
  • If you want to take refund then also there is a need for Income Tax Return.
  • For professionals and business organisations, Income tax returns are a must to become eligible to secure certain tenders.

How Many forms are there for filing ITR

There are 9 forms available for filing ITR. Different forms are available for filing ITR for different sources of Income and status of Person

ITR-1(click here)

ITR-2(click here)

ITR-2A(click here)

ITR-3 (click here)

ITR-4 (click here)

ITR-4S (click here)

ITR-5 (click here)

ITR-6 (click here)

ITR-7 (click here)

Time Limit for furnishing of Income Tax Returns(Section 139(1))

Belated Return(Section 139(4))

If an assessee has not filed the return within the time allowed under section 139(1) or within time allowed under notice issued under section 142(1), then the person may furnish the return of previous year at any time

  • before the expiry of one year from the end of relevant assessment year or completion of assessment whichever is earlier.
  • before the end of relevant assessment year or completion of assessment whichever is earlier.( applicable from AY 2017-18)

e.g:-   If a Company wants to file return for the previous year  2015-16 then the due date of filing return is 30th September 2016 but if assesssee fails to furnish such return within the due date then he can file the return till 31.03.2018(i.e. one year from the end of relevant assessment year i.e. 31.03.2017)

From A.Y. 2017-18

e.g:-  If a Company wants to file return for the previous year  2016-17 then the due date of filing return is 30th September 2017 but if assesssee fails to furnish such return within the due date then he can file the return till 31.03.2017(i.e. before the end of relevant assessment year i.e. 31.03.2017)

 

Consequences of late filing of Returns

  • Interest U/s 234A is levied

If return is filed after the due date or not furnished, the assessee is liable to pay interest u/s 234A

Rate of interest:  @ 1% per month or part of month

Period for which interest is levied:

From the day immediately following the due date till the date

  • on which return is filed or
  • assessment is completed.
  • Penalty under Section 271F:
    • If a person who is required to furnish a return of his income, as required under sub-section (1) of section 139 or by the provisos to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of five thousand rupees.

(that means even if belated return is filed after the end of relevant assessment year then also penalty is imposed)

  • If a return of loss is filed after the due date, then the loss cannot be carried forward

 

1 Comment

  1. Great coverage we have not seen this such type of comprehensive coverage on Income Tax Rturn on any site ever before we really apreciate your efforts

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