What is a return of income?

It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income. These forms can be downloaded from www.incometaxindia.gov.in

What are the forms of return prescribed under the Income-tax Law?

Under the Income-tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms). The forms of return prescribed under the Income-tax Law for filing of return of income for the assessment year 2016-17 (i.e., financial year 2015-16) are as follows:

Return FormBrief Description
ITR – 1Also known as SAHAJ is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses).
ITR 2AIt is applicable to an individual or HUF whose total income for the assessment year 2016-17 does not include income from business or profession, capital gains. Further, an individual or HUF claiming foreign tax credit or having any asset (including financial interest in any entity) located outside India or having any signing authority in any account located outside India or having income from any source outside India cannot use this form for filing of return of income.
ITR – 2It is applicable to an individual or a Hindu Undivided Family having income from any source other than “Profits and gains of business or profession”.
ITR – 3It is applicable to an individual or a Hindu Undivided Family who is a partner in a firm and where income chargeable to tax under the head “Profits or gains of business or profession” does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.
ITR – 4SAlso known as SUGAM is applicable to individuals or Hindu Undivided Family or partnership firm (other than limited liability partnership firm) who have opted for the presumptive taxation scheme of section 44AD/44AE.
ITR – 4It is applicable to an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.
ITR – 5This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or section 139(4E) or section 139(4F) shall not use this form (i.e., trusts, political parties, institutions, colleges, investment fund etc.)
ITR – 6It is applicable to a company, other than a company claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust).
ITR – 7It is applicable to a persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political parties, institutions, colleges, investment fund, etc.).
ITR – VIt is the acknowledgement of filing the return of income.

From where can I get a return form?

The return form can be downloaded from the site http://www.incometaxindia.gov.in or http://incometaxindiaefiling.gov.in

What are the different modes of filing the return of income?

The Return Form can be filed with the Income-tax Department in any of the following ways, –

  (i) by furnishing the return in a paper form;

 (ii) by furnishing the return electronically under digital signature;

(iii) by transmitting the data in the return electronically under electronic verification code;

(iv) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;

Note

Where the return of income is filed in the manner given at (iv) without digital signature, then the taxpayer should take two printed copies of Form ITR-V. One copy of ITR-V, duly signed by the taxpayer, is to be sent (within the period specified in this regard, i.e., 120 days) by ordinary post or speed post to “Income-tax Department – CPC, Post Bag No. 1, Electronic City Post Office, Bengalore-560100 (Karnataka). The other copy may be retained by the taxpayer for his record.

For whom e-filing of return is mandatory?

Following taxpayers shall file their return of income only through e-filing mode:

(1) From the assessment year 2015-16 onwards any asessee filing ITR 1/2/2A (other than an individual of the age of 80 years or more at anytime during the previous year) having a refund claim in the return or having total income of more than Rs. 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code.

(2) Every company shall furnish the return of income electronically under digital signature. In other words, for corporate taxpayer e-filing with digital signature is mandatory.

(3) A firm or an individual or a Hindu Undivided Family (HUF) whose books of account are required to be audited under section 44AB shall furnish the return of income electronically under digital signature. In other words, in such a case, e-filing with digital signature is mandatory.

(4) A resident assessee having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India or income from any source outside India shall furnish the return of income electronically with or without digital signature or by using electronic verification code.

(5) Taxpayers claiming relief under section 90, 90A or 91 shall furnish the return of income electronically with or without digital signature or by using electronic verification code.

(6) A person who is required to file ITR – 5 shall file the same electronically with or without digital signature. However, a firm liable to get its accounts audited under section 44AB shall furnish the return electronically under digital signature.

(7) A taxpayer who is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW or to give a notice under section 11(2)(a) shall furnish the return electronically.

(8) Return Form ITR- 3 is to furnish electronically in the following modes:

   (i) by furnishing the return electronically under digital signature;

  (ii) by transmitting the data in the return electronically under electronic verification code;

 (iii) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V.

(9) Return Form ITR-4 is to be furnish electronically in the following modes:

   (i) by furnishing the return electronically under digital signature;

  (ii) by transmitting the data in the return electronically under electronic verification code;

  (iii) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;

However, where the books of accounts are required to be audited under section 44AB, the return is required to be furnished in the manner provided at (i) i.e. e-filing with digital signature.

(10) Return Form ITR – 7 is to be furnished electronically in the following modes :

   (i) by furnishing the return electronically under digital signature;

  (ii) by transmitting the data in the return electronically under electronic verification code;

 (iii) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;

However, a political party shall compulsorily furnish the return in the manner mentioned at (i) above. Where the Return Form is furnished in the manner mentioned at (iii), the assessee should print out two copies of Form ITR-V. One copy of ITR-V, duly signed by the assessee, has to be sent by ordinary post to Post Bag No. 1, Electronic City Office, Bangalore-560100 (Karnataka). The other copy may be retained by the assessee for his record.

Is it necessary to attach any documents along with the return of income?

ITR return forms are attachment less forms and, hence, the taxpayer is not required to attach any document (like proof of investment, TDS certificates, etc.) along with the return of income (whether filed manually or filed electronically). However, these documents should be retained by the taxpayer and should be produced before the tax authorities when demanded in situations like assessment, inquiry, etc.

As discussed above, no documents are to be attached along with the return of income, however, in case of a taxpayer who is required to furnish a report of audit under section 10(23C)(v), 10(23C)(vi), 10(23C)via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW or to give a notice under section 11(2)(a) shall furnish it electronically on or before the date of filing the return of income.

Where and how am I supposed to file my return?

Return of income can be filed either in hard copy at the local office of the Income-tax Department or can be electronically filed at www.incometaxindiaefiling.gov.in

In the case of certain persons (already discussed in previous FAQ) e-filing is mandatory.

Who can use ITR – 1 (SAHAJ)?

Return Form ITR – 1 (SAHAJ) can be used by an individual whose total income includes:

(1) Income from salary/pension; or

(2) Income from one house property (excluding cases where loss is brought forward from previous years); or

(3) Income from other sources (excluding winnings from lottery and income from race horses).

Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used only when such income falls in any of the above categories.

Who cannot use ITR – 1 (SAHAJ)?

Return Form ITR – 1 (SAHAJ) cannot be used by an individual:

  • Whose total income for the year includes income from more than one house property.
  • Whose total income for the year includes income from winnings from lottery or income from race horses.
  • Whose total income for the year includes income chargeable to tax under the head “Capital Gains”.
  • Whose total income for the year includes agricultural income of more than Rs. 5,000.
  • Whose total income for the year includes income from business or profession.
  • Whose total income for the year includes loss under the head “Income from other sources”.
  • Who has claimed relief under section 90 and/or 91.
  • Any Resident having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.
  • Any resident having income from any source outside India.

Who can not use ITR-2A?

Return Form – ITR 2A cannot be used by an individual or a Hindu Undivided Family whose total income for the assessment year 2016-17 includes,-

 (a) Income from Capital Gains; or

 (b) Income from Business or Profession; or

 (c) Any claim of relief/deduction under section 90, 90A or 91; or

 (d) Any resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India; or

 (e) Any resident having income from any source outside India.

Who can use ITR-2A?

Return Form ITR – 2A can be used by an individual or a Hindu Undivided Family whose total income for the assessment year 2016-17 includes:-

 (a) Income from Salary / Pension; or

 (b) Income from House Property; or

 (c) Income from Other Sources (including Winning from Lottery and Income from Race Horses).

Further, in a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used where such income falls in any of the above categories.

Who can use ITR – 2?

Return Form ITR – 2 can be used by an individual or a Hindu Undivided Family whose total income for the year includes:

  • Income from Salary / Pension; or
  • Income from House Property; or
  • Income from Capital Gains; or
  • Income from Other Sources (including winnings from lottery and income from race horses).

Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this Return Form can be used if income to be clubbed falls in any of the above categories.

Who cannot use ITR – 2?

Return Form ITR – 2 cannot be used by an individual whose total income for the year includes income from Business or Profession.

Who can use ITR – 3?

Return Form ITR – 3 can be used by an individual or a Hindu Undivided Family who is a partner in a firm and income chargeable to income-tax in his/its hand under the head “Profits or gains of business or profession” does not include any other income, except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.

In case a partner of the firm does not have any income from the firm by way of interest, salary, etc., and has only exempt income by way of share in the profit of the firm, he shall use Form ITR – 3 only and not Form ITR-2.

Who cannot use ITR – 3?

Form ITR – 3 cannot be used by an individual or HUF whose total income for the year includes income from Business or Profession under any proprietorship.

Who can use ITR – 4S (SUGAM)?

Form ITR – 4S (SUGAM) can be used by an Individual/HUF/Firm (Other than LLP) whose total income for the year includes:

(a) Business income computed as per the provisions of section 44AD or 44AE; or; or

(b) Income from salary/pension; or

(c) Income from one house property (excluding cases where loss is brought forward from previous years); or

(d) Income from other sources (excluding winnings from lottery and income from race horses).

Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used where income to be clubbed falls in any of the above categories.

Who cannot use ITR – 4S (SUGAM)?

Form ITR – 4S (SUGAM) cannot be used by an individual/HUF:

  • Whose total income for the year includes income from more than one house property.
    • Whose total income for the year includes income from winnings from lottery or income from race horses.
    • Whose total income for the year includes income chargeable to tax under the head “Capital Gains”.
    • Whose total income for the year includes agricultural income of more than Rs. 5,000.
    • Whose total income for the year includes income from speculative business and other special incomes.
    • Whose total income for the year includes income from profession as referred to in section 44AA(1).
    • Whose total income for the year includes income from agency business or income in the nature of commission or brokerage.
    • Who claims relief under section 90, 90A and/or section 91
    • Who is a resident and ordinarily resident and has any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.

In case of a taxpayer who is engaged in any business eligible for the presumptive taxation scheme of section 44AD or section 44AEbut he does not opt for the presumptive taxation scheme, then such a taxpayer has to maintain the books of account of the business as per the provisions of section 44AA and has to get these accounts audited. In such a case he cannot use ITR 4S.

In case of a taxpayer who is engaged in any business eligible for the presumptive taxation scheme of section 44AD or section 44AE but he does not opt for the presumptive taxation scheme, then such a taxpayer has to maintain the books of account of the business as per the provisions of section 44AA and has to get his accounts audited. In such a case he cannot use ITR 4S.

Who can use ITR – 4?

Form ITR – 4 can be used by an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.

Who cannot use ITR – 4?

Form ITR – 4 cannot be used by any person other than an individual or a HUF. Further, an individual or a HUF not having income from business or profession cannot use ITR – 4.

Who can use ITR – 5?

Form ITR – 5 can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person , cooperative society and local authority.

Who cannot use ITR – 5?

Form ITR – 5 cannot be used by, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political party, institutions, colleges, investment fund, etc.).

Who can use ITR – 6?

Form ITR – 6 can be used by a company, other than a company claiming exemption under section 11 (charitable/religious trust can claim exemption under section 11).

Who cannot use ITR – 6?

Form ITR – 6 cannot be used by a company claiming exemption under section 11 (charitable/religious trust can claim exemption under section 11).

Who can use ITR – 7?

Form ITR – 7 can be used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4f) (i.e., trusts, political party, institutions, colleges, investment fund, etc.).

Who cannot use ITR – 7?

Form ITR – 7 cannot be used by a person who is not required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political party, institutions, colleges, investment fund, etc.).

How to file the return of income electronically?

Income-tax Department has established an independent portal for e-filing of return of income. The taxpayers can log on to www.incometaxindiaefiling.gov.in for e-filing the return of income.

What is e-filing utility provided by the Income-tax Department?

The Income-tax Department has provided free e-filing utility (i.e., software) to generate e-return and furnishing of return electronically. The e-filing utility provided by Department is simple, easy to use and also contains instructions on how to use it. By using the e-filing utility, the taxpayers can easily file their returns of income. Utility can be downloaded from www.incometaxindiaefiling.gov.in

Is there any e-filing help desk established by the Income-tax Department?

In case of queries on e-filing of return, the taxpayer can contact 1800 4250 0025.

What is the difference between e-filing and e-payment?

E-payment is the process of electronic payment of tax (i.e., by net banking or SBI’s debit/credit card) and e-filing is the process of electronically furnishing of return of income. Using the e-payment and e-filing facility, the taxpayer can discharge his obligations of payment of tax and furnishing of return easily and quickly.

Will I be put to any disadvantage by filing my return?

No, on the contrary by not filing your return inspite of having taxable income, you will be liable to the penalty and prosecution provisions under the Income-tax Act.

What are the benefits of filing my return of income?

Filing of return is your duty and earns for you the dignity of consciously contributing to the development of the nation. Apart from this, your income-tax returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits, etc.

What are the benefits of e-filing the return of income?

E-filing can be done from any place at any time and it saves time and efforts. It is simple, easy and faster. The e-filed returns are generally processed faster as compared to returns filed manually.

Is it necessary to file return of income when I do not have any positive income?

If you have sustained a loss in the financial year, which you propose to carry forward to the subsequent year for adjustment against subsequent year(s) positive income, you must make a claim of loss by filing your return before the due date.

What are the due dates for filing returns of income/loss?

Due date of filing of return of income

Sr. No.Status of the taxpayerDue date
1Any company other than a company who is required to furnish a report in Form No. 3CEB under section 92E (i.e. other than covered in 2 below)September 30 of the assessment year
2Any person (may be corporate/non-corporate) who is required to furnish a report in Form No. 3CEB under section 92ENovember 30 of the assessment year
3Any person (other than a company) whose accounts are to be audited under the Income-tax Law or under any other lawSeptember 30 of the assessment year
4A working partner of a firm whose accounts are required to be audited under this Act or under any other law.September 30 of the assessment year
5Any other assesseeJuly 31 of the assessment year .

If I fail to furnish my return within the due date, will I be fined or penalized?

Yes, if you have not furnished the return within the due date, you will have to pay interest on tax due. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F.

Can a return be filed after the due date?

Yes, if one could not file the return of income on or before the prescribed due date, then he can file a belated return. A belated return can be filed within a period of one year from the end of the assessment year or before completion of the assessment, whichever is earlier. Return filed after the prescribed due date is called as a belated return. However, w.e.f. 01-04-2017, belated income-tax return for the Assessment Year 2017-18 and onwards can be filed at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. A belated return attracts interest and penalty as discussed in previous FAQ.

E.g., In case of income earned during FY 2015-16, the belated return can be filed up to 31st March, 2018.

If I have paid excess tax how will it be refunded to me?

The excess tax can be claimed as refund by filing your Income-tax return. It will be refunded to you by crediting it in your bank account through ECS transfer. The department has been making efforts to settle refund claims at the earliest.

If I have committed any mistake in my original return, am I permitted to file a revised return to correct the mistake?

Yes* Return can be revised within a period of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier.

E.g., E.g., In case of income earned during FY 2015-16, the due date of filing the return of income (considering no audit) is 31st July, 2016. If the return of income is filed on or before 31st July, 2016 then the return can be revised upto 31st March, 2018 (assuming assessment is not completed by that date).

How many times can I revise the return?

Theoretically a return can be revised any number of times before the expiry of one year from the end of the assessment year or before assessment by the Department is completed, whichever event takes place earlier.

Am I required to keep a copy of the return filed as proof and for how long?

Yes, since legal proceedings under the Income-tax Act can be initiated up to four or six years (as the case may be) prior to the current financial year, you must maintain such documents at least for this period. However, in certain cases the proceedings can be initiated even after 6 years, hence, it is advised to preserve the copy of return as long as possible. Further, after introduction of the e-filing facility, it is very easy and simple to maintain the copy of return of income.

There are various deductions that are not reflected in the Form 16 issued by my employer. Can I claim them in my return?

Yes, it can be claimed if you are otherwise eligible to claim the same.

Why is return filing mandatory, even though all my taxes and interests have been paid and there is no refund due to me?

Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the Department by way of filing of the return of income. Only then the Government assumes rights over the taxes paid by you. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.

Am I liable for any criminal prosecution [arrest/imprisonment, etc.] if I don’t file my Income-tax return, even though my income is taxable?

Non-payment of tax attracts interests, penalty and prosecution. The prosecution can lead to rigorous imprisonment from 3 months to 2 years (when the tax sought to be evaded exceeds Rs. 25,00,000 the punishment could be 6 months to 7 years).

What is Form 26AS?

A taxpayer may pay tax in any of the following forms:

(1) Tax Deducted at Source (TDS)

(2) Tax Collected at Source (TCS)

(3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.

The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer).  Form 26AS is an annual statement maintained under Rule 31AB of the Income-tax Rules disclosing the details of tax credit in his account as per the database of Income-tax Department. In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.

Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.

What to do if discrepancies appear in actual TDS and TDS credit as per Form 26AS?

Every person deducting tax at source has to furnish the details of tax deducted by him to the Income-tax Department. The details will cover the name of the deductee, Permanent Account Number of the deductee, amount of tax deducted, amount paid to the deductee, date of payment of TDS to the credit of Government, etc. On the basis of the details of TDS provided by the deductor, the Income-tax Department will update Form 26AS of the deductee.

Many times the actual amount of TDS and TDS credit as appearing in Form 26AS may differ and it may happen that the TDS credit appearing in Form 26AS may be less as compared to actual TDS, this may happen due to reasons like non-furnishing of TDS details to the Income-tax Department by the deductor, deducting the tax in incorrect Permanent Account Number, etc. In such a case the deductee should approach the deductor and request him to take the necessary steps to rectify the discrepancy due to above reasons.

The Income-tax Department updates the TDS details in Form 26AS on basis of details provided by the person deducting the tax (i.e., the deductor), hence, if there is any default on the part of deductor like non -furnishing of TDS details (i.e., TDS return) to the Income-tax Department, deducting the tax in incorrect Permanents Account Number, etc. then Form 26AS will not reflect the actual TDS. In such a case, the taxpayer may not be able to claim the credit of correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference, if any.

What precautions should be taken while filing the return of income?

Following is the list of few important steps/points/precautions to be kept in mind while filing the return of income:

  • The first and foremost precaution is to file the return of income on or before the due date. Taxpayers should avoid the practice of filing belated return. Following are the consequences of delay in filing the return of income :
  • Loss (other than house property loss) cannot be carried forward.
  • Levy of interest under section 234A.
  • Penalty of Rs. 5,000 under section 271F can be levied.
  • Exemptions/deductions under section 10A, section 10B, 80-IA, 80-IAB, 80-IB, 80-IC , 80-ID and 80-IE are not available.
  • Belated return cannot be revised under section 139(5). However, w.e.f. 01-04-2017, income-tax return for the Assessment Year 2017-18 and onwards filed under section 139(1) or section 139(4)[belated return’ can also be revised.
  • Taxpayer should download Form 26AS and should confirm actual TDS/TCS/Tax paid. If any discrepancy is observed then suitable action should be taken to reconcile it.
  • Compile and carefully study the documents to be used while filing the return of income like bank statement/passbook, interest certificate, investment proofs for which deductions is to be claimed, books of account and balance sheet and P/L A/c (if applicable), etc. No documents are to be attached along with the return of income.
  • The taxpayer should identify the correct return form applicable in his case.
  • Carefully provide all the information in the return form.
  • Confirm the calculation of total income, deductions (if any), interest (if any), tax liability/refund, etc.
  • If any tax is payable as per the return of income, then the same should be paid before filing the return of income, otherwise return would be treated as defective return.
  • Ensure that other details like PAN, address, e-mail address, bank account details, etc., are correct.
  • After filling all the details in the return of income and after confirmation of all the details, one can proceed with filing the return of income.
  • In case return is filed electronically without digital signature and without electronic verification code do not forget to post the acknowledgement of filing the return of income at CPC Bangalore (as discussed earlier).

(Republished with Amendments)

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Category : Income Tax (20858)
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  • Gulam Dastgir Quraishi

    wherein to fill in details of the donee for the 80GGC dedeuctions