Currently, certain category of person e.g. Individual, HUF are required to file a tax return only if his total income exceeds maximum amount not chargeable to tax. With the objective of ensuring governance in Budget 2019 Proviso to Section 139 (1) has been inserted and the scope of tax-return filing requirement has been widened by including these categories who were otherwise not required to file a tax return. This proviso will ensure that people who have ability to incur large expenditure do not escape from paying tax and filing of tax return.
Mandatory Filing of ITR in Certain Cases: New Proviso to Section 139 (1)
In the Budget 2019 a new proviso to Section 139 (1) has been inserted where it’s made mandatory to file the Income Tax Return by the person if such person during the previous year:
1. has deposited an amount or aggregate of the amounts exceeding one crore rupees in one or more current account maintained with a banking company or a co-operative bank; or
2. has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or
3. has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity; or
4. fulfills such other conditions as may be prescribed
5. claims the benefits of tax exemption for long term capital gains under various provisions under section 54 of the Income Tax Act (i.e. Claims rollover benefit of capital gains, for investment in a house or a bond or any other asset under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB).
In the above cases such person has to file the ITR even if the income of such person is below the taxable limit.
These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the Assessment Year 2020-2021 i.e. Financial Year 2019-20.
Amendment to Section 139A for Permanent Account Number (PAN)
It is proposed to insert a new clause (vii) in the said sub-section so as to provide that every person, who intends to enter into such transaction, as may be prescribed by the Board in the interest of revenue, shall also apply to the Assessing Officer for allotment of a permanent account number.