Comprehensive Guide to Income Tax Returns (ITR) Filing for A.Y. 2023-24

An informative guide detailing the procedures, requirements, and implications of filing Income Tax Returns (ITRs) in India, catering to a wide range of entities such as individuals, companies, trusts, and more for for A.Y. 2023-24.

INOME TAX RETURNS

Income Tax Returns (ITRs) are the formats through which taxpayers provide details of their income to the Income Tax Department.

Person required to filing the ITR:

• COMPANY: Every company, irrespective of its income, is required to file the return of income, even in cases of loss.
• Partnership Firm: Every partnership firm, including LLPs, should compulsorily file the return of income irrespective of the income being gain or loss.
• Individual or HUF or AOP or BOI or Artificial Juridical Person: Each individual, HUF, AOP, BOI, or Artificial Juridical Person should file an ITR if their TOTAL INCOME, excluding the effects of the following, exceeds the maximum amount NOT chargeable to tax:

a) Section 10(38) e. exemption on LTCG from sale of equity shares of a company or a unit of an equity oriented mutual fund

b) Section 10A e. special provisions for income derived by newly established entities in Special Economic Zone

c) Section 10B e. deduction to 100% export oriented enterprises on the gains derived from export of article or things or computer software.

d) Section 10BA e. deduction of gains derived by an entity from export of certain things other than covered in section 10A or 10B

e) Section 54 e. exemption on capital gain from transferring residential house property

f) Section 54B e. exemption on capital gain from transfer of agricultural land

g) Section 54D e. capital gain on compulsory acquisition of land and building NOT to be charged

h) Section 54EC e. exemption on LTCG from eligible bonds

i) Section 54F e. exemption of capital gain arising from transfer from certain capital assets

j) Section 54G e. exemption of capital gain on transfer of asset in case of shifting of industrial undertaking from urban area

k) Section 54GA e. exemption of capital gain on transfer of asset in case of shifting of industrial undertaking from urban area to any Special Economic Zone

l) Section 54GB e. exemption of capital gain arising from transfer of capital gain

m) Deductions under section 80C to 80U

• Charitable or Religious Trust: Every person receiving income derived from trust property or voluntary contribution should file the ITR if their total income, excluding the effects of section 11 and section 12, exceeds the maximum amount not chargeable to tax.
• Political Parties: The CEO of every political party must file the ITR of the party if the total income of the party, excluding the effect of section 13A, exceeds the maximum amount not chargeable to tax.
• Certain Associations: The following entities need to file the ITR if their total income, excluding the effect of section 10, exceeds the maximum amount NOT chargeable to tax:

a) Research Organisations referred in section 10(21)

b) News agencies referred in section 10(22B)

c) Association or institution referred in section 10(23A)

d) Person referred in section 10(23AAA)

e) Institution referred in section 10(23B)

f) Funds or Institutions or trust or university or other educational institutions or medical or hospital institutions referred in clause (iiiac), (iiiab), (iiiad), (iv), (v), (vi), or (via) of section 10(23C)

g) Mutual funds referred in section 10(23D)

h) Securitisation trust referred in section 10(23DA)

i) Investor Protection Fund referred in section 10(23EC) or 10(23ED)

j) Core settlement guarantee funds referred in section 10(23EE)

k) Venture capital company or venture capital fund referred in section 10(23FB)

l) Trade union or association referred in clause (a) or (b) of section 10(24)

m) Board or authority referred in section 10(29A)

n) Body or authority or Board or Trust or Commission referred in section 10(46)

o) Infrastructure debt fund referred in section 10(47)

• Colleges or University or other Institutions: Every College, University or other institutions referred in clause (ii) and (iii) of section 35(1) i.e. organisations that shall carry out scientific research activity by itself and shall maintain separate books of accounts in respect of sums received by it for scientific research shall furnish ITR irrespective of income or loss
• Business Trust: Every business trust is required to file ITR irrespective of income or loss.
• Investment Fund referred in section 115UB: Every investment fund referred in section 115UB shall file ITR irrespective of income or loss.
• Person holding assets outside India: A Person being ordinary resident of India who is NOT required to file ITR in any provisions mentioned above AND who AT ANY TIME during the P.Y. holds, as a Beneficial Owner or as a Beneficiary, ANY asset located outside India shall furnish ITR. However, these provisions are NOT applicable to any individual where income arising from such asset is includible in income of Beneficial Owner.

MANDATORY FILING OF ITR IN FOLLOWING CASES

From A.Y. 2020-21, it is mandatory for every person other than a company or firm who is not required to furnish ITR under any other provision of section 139(1), to file ITR if during the P.Y. he:

• Has deposit an amount or in aggregate exceeding Rs. 1Cr. in one or more current account maintained with a bank or co-operative bank
• Has incurred aggregate expenditure in excess of Rs. 2 lakh for himself or for any other person for travel to a foreign country
• Has incurred aggregate expenditure on electricity bill in excess of Rs. 1 lakh
• Other conditions as may be prescribed.

The CBDT vide notification no. 37/2022, dated on 21-4-2022, has notified additional conditions whereby filing is mandatory. These additional conditions are as follows:

• If total sales, turnover or gross receipt of the business exceeds Rs. 60 lakh during the P.Y.
• If total gross receipt of the profession exceeds Rs. 10 lakh during the P.Y.
• If the total of tax deducted and collected of a person during the P.Y. is 25000 or more. The threshold is Rs. 60000 for senior citizen who is an ordinary resident of India
• If the aggregate deposit in one or more savings bank account of person is Rs. 50 lakh or more during the P.Y.

DUE DATE of Filing of Return of Income

• Any company other than which is required to furnish a report in form no. 3CEB under section 92E or any person(other than a company) whose accounts are required to be audited or a working partner of firm whose accounts are required to be audited, shall file ITR till 31 OCOTOBER of A.Y.
• Any person required to furnish report in from no 3CEB under section 92E, shall file ITR till 31 NOVEMBER of A.Y.
• Any other assesse shall furnish ITR till 31 JULY of A.Y.

What are the consequences of DELAY in filing of ITR

• Loss other than the loss under head “Income from House Property” cannot be carried forward
• Levy of interest under section 234A
• Levy of fee under section 234F
• Exemption under sections 10A and 10B are NOT available
• Deductions under Part-C of chapter VI-A shall not be available

REVISION OF RETURNS [section 139(5)]

When a taxpayer files ITR but omits to enter some details in it or commit any mistake in filing such return then such a taxpayer can correct the ITR by filing revised return.

A return can be revised at any time 3 months before the end of relevant A.Y. or before the completion of assessment, whichever is earlier. But only return filed under section 139(1) or belated return filed under section 139(4) can be revised.

A return filed after notice under section 142(1) cannot be revised under section 139(5)

DEFECTIVE RETURN [section 139(9)]

When the return is considered as DEFECTIVE by Assessing Officer (A.O.) then A.O. may intimate such defect to taxpayer and may give him an opportunity to him to rectify such defect within 15 days or within such extended period as may provide by him. However, if such taxpayer fails to rectify such defect in return then the return shall be treated as an invalid return and provision of this act applies as if the taxpayer had failed to furnish the return.

ITR FORMS

• ITR-1: This form is for a residential individual whose total income for A.Y. 2023-2024 includes:

a) Income from salary/pension or

b) Income from one House Property excluding cases when loss is brought forward from P.Y.

c) Income from other sources excluding winning from lottery and horse race

d) Agricultural income up to Rs. 5,000.

Who cannot use ITR-1 Form?

a) Total income exceeding Rs. 50 lakh.

b) Taxable Capital Gain

c) When assessee have income from business or profession

d) Having income from more than ONE house property

e) Director of a company

f) If assessee had investment in equity shares of unlisted company at any time during the P.Y.

g) Owing asset outside India

h) An assessee having foreign income

i) An assessee whose TDS has been deducted under section 194N

j) If the assessee have any brought forward loss or loss needs to be carried forward under any income head

• ITR-2: This form is for individual or HUF whose total income for A.Y. 2023-202 includes:

a) Income from salary/pension

b) Income from House Property

c) Total income exceeding Rs. 50 lakh.

d) Taxable Capital Gain

f) An assessee being a resident ordinary resident, resident not ordinary resident and non-resident

g) Director of a company

h) If assessee had investment in equity shares of unlisted company at any time during the P.Y.

i) Owing asset outside India

j) An assessee having foreign income

k) An assessee whose TDS has been deducted under section 194N

l) If the assessee have any brought forward loss or loss needs to be carried forward under any income head

Who cannot use ITR-2 Form?

An assessee whose total income for the A.Y. 2023-24 includes Income from Business or Profession

• ITR-3: This form is for those whose total income includes income from Business or Profession. Also individuals or HUFs who are not eligible to file ITR-1, ITR-2 and ITR-4, should file ITR-3.
• ITR-4: This form is for Individuals, HUFs and partnership firm (other than LLP), which are resident and whose total income includes:

a) Business income according to presumptive income scheme under section 44AD or 44AE.

b) Professional income according to presumptive income scheme under section 44ADA.

c) Income from salary or pension up to Rs. 50 lakh

d) Income from ONE house property NOT more than Rs. 50 lakh.

e) Income from other sources having income NOT more than Rs. 50 lakh excluding income from lottery and race-horses.

• ITR-5: This form is for Firms, LLPs, AOPs, BOIs, Artificial Juridical Person, Estate of Deceased, Estate of Insolvent, Business trust and investment fund.
• ITR-6: This form is for Companies other than companies claiming exemption under section 11.
• ITR-7: This is for those persons including companies required to furnish return under section 139(4A), section 139(4B), section 139(4C), section 139(4D), section 139(4E) and section 139(4F).

Return under section 139(4A) is required to be filed by every person in receipt of income derived from TRUST PROPERTY for charitable or religious purpose.

Return under section 139(4B) is required to be filed by the political party if total income without giving effect to provisions of section 139A exceeds the maximum amount not chargeable to tax.

Return under section 139(4C) is required to be filed by:

a) Scientific Research Association.

b) News Agency

c) Association or institution referred in section 10(23A)

d) Institution referred in section 10(23B)

e) Funds or institution or university or other educational institutions or any hospital or other medical institute.

Return under section 139(4D) is required to be filed by every college or university or other institution, which is NOT required to furnish a return of income or loss under any other provision of this section

Return under section 139(4E) is required to be filed by every business trust which is NOT required to furnish a return of income or loss under any other provision of this section

Return under section 139(4F) is required to be filed by any investment fund referred in section 115UB which is NOT required to furnish a return of income or loss under any other provision of this section.

By whom RETURN should be VERIFIED [section 140]

• In case of Individual:

a) by individual himself

b) where such individual is absent from India, by individual himself or any other person authorised by him on his behalf

c) where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent to act on his behalf, and

d) where, any other reason, it is not possible for the individual to verify the return , by any person authorised by him.

• In case of HUF: By KARTA and where KARTA is absent from India or he is incapable from attending to his affairs, any other adult member of such family.
• In case of company: by managing director or where for any unavoidable reasons such managing director is not able to verify the return or where there is no managing director, by any director thereof.
• In case of firm: by managing partner of firm or where for any unavoidable reasons such managing partner is not able to verify the return or where there is no managing partner, by any partner thereof, not being minor.
• In case of LLP: by designated partner of firm or where for any unavoidable reasons such designated partner is not able to verify the return or where there is no designated partner, by any partner thereof.
• In case of local municipal party: by the principal officer thereof.
• In case of political party: by CEO of such party
• In case of any other association: by any member of association or the principal officer thereof
• In case of any other person: by that person or any other person competent to act on his behalf.

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