Taxes are the biggest source of revenue of government of India, for its day to day expenses and social welfare measures. Normally tax collections are divided in Direct Tax and Indirect Tax category. Income Tax comes under the Direct Taxes group and this is biggest source of revenue under this category. Direct Tax Collections have increased from Rs. 68,305 Cr. in the year 2000-2001 to Rs. 7,42,295 Cr. in the year 2015-2016.

Once again, season of Income Tax Return filing has arrived. So, as a preparatory measure, some relevant points are discussed hereunder.

DIFFERENT HEADS UNDER WHICH INCOME IS COMPUTED

There are five heads under which income is computed for taxation purposes;

1. Income from salary,

2. Income from house property,

3. Profits and gains of business or profession,

4. Capital gains and

5. Income from other sources

FILING OF INCOME TAX RETURN

Section 139 of the Income Tax provides that;

[(1) Every person,—

(a) being a company or a firm; or

(b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax,

shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.

It further provides that a person, being a resident other than not ordinarily resident in India, who is not required to furnish a return under this sub-section 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.

TIME LIMIT FOR FILING INCOME TAX RETURN

S. No.Type of AssesseeTime Limit
1.Company or a person whose accounts are required to be audited or a working partner of a firm whose accounts are required to be audited30th September
2.In the case of an assessee who is required to furnish a report referred to in section 92E30th November
3.In case of any other assessee31st July

FILING OF BELATED RETURN

Section 139 (4) further provides that “Any person who has not furnished a return within the time allowed to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

The following sub-section (4) shall be substituted for the existing sub-section (4) of section 139 by the Finance Act, 2016, w.e.f. 1-4-2017 :

(4) Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

REVISION OF INCOME TAX RETURN

Sub-section (5) of Section 139 provides that “ If any person, having furnished a return under sub-section (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

The following sub-section (5) shall be substituted for the existing sub-section (5) of section 139 by the Finance Act, 2016, w.e.f. 1-4-2017 :

(5) If any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

DEFECTS IN INCOME TAX RETURN

As per sub-section (9) of Section 139, Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return :

Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return.

INCOME TAX RETURN FORMS

S. No.Type of Income Tax Return FormAssessees for whom applicable
1.ITR 1 (SAHAJ)For Individuals having Income from Salary & Interest
2.ITR 2For Individuals & HUFs not having Income from Business or Profession
3.ITR 2AFor Individuals & HUFs not having Income from Business or Profession and Capital Gains and who do not hold foreign assets
4.ITR 3For Individuals/HUFs being partners in firms and not carrying out business or profession under any proprietorship
5.ITR 4For Individuals & HUFs having income from a proprietory business or Profession
6.ITR 4S (SUGAM)For Individuals/HUF/Partnership Firm having income from presumptive Business
7.ITR 5For persons other than, (i) individual, (ii) HUF, (iii) company and (iv) person filing ITR7
8.ITR 6For Companies other than companies claiming exemption under section 11
9.ITR 7For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)

DOCUMENTS REQUIRED FOR FILING INCOME TAX RETURN

  1. A copy of last year’s income tax return,
  2. Form 16 for salaried assesses and Form 16A for others,
  3. Bank Statements along with Bank Account No. and IFSC Codes,
  4. Aadhar,
  5. Mobile No. and Email ID,
  6. Savings certificates/Deductions,
  7. Balance Sheet, P&L Account Statement and other Audit Reports wherever applicable,
  8. Other relevant documents.

WAYS OF FILING INCOME TAX RETURN

There are different kinds of professionals present to assist filing Income Tax Return, such as;

  1. By the assesse himself,
  2. Chartered Accountants,
  3. Income Tax Return Preparers,
  4. Advocates and other professionals practicing in taxation,
  5. Website of various private vendors etc.

FEES FOR FILING INCOME TAX RETURN

Normally fee for filing Income Tax Return depends upon data and complexity of the particular case. Income Tax Department has provided all forms on their website which may be used for the purpose. An assessee can prepare and file return himself if he so desires or take help of tax professionals. While fees of Chartered Accountants and other professionals are subject to personal negotiations there are Income Tax Return Preparers (TRPs) available, whose fees may be determined by the Government and they may be incentivized on the basis of tax collections, by the Government itself. TRPs are supervised by the Government. However, The Committee for capacity building of CA Firms and small & medium practitioners of the Institute of Chartered Accountants of India has also published a minimum recommended scale of fees for Chartered Accountants which may also be followed.

So, gear up and file your income tax return without waiting for the last day as events during that time might force you to miss the deadline.

CA Brijesh BaranwalAuthor: CA. Brijesh Baranwal

The Author is a Practicing Chartered Accountant and based in Dwarka, New Delhi. In case of queries and suggestions, please contact: cabrijesh@yahoo.co.in

Disclaimer- This write up is only for awareness purpose and should not be considered as expert opinion.

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