CA Brijesh Baranwal
Article explains Income Tax In India, Taxable Income, Income Tax Return-Filing Requirements, Time Limit For Filing Income Tax Return, Filing of Belated Return, Revision of Income Tax Return, Defects in Income Tax Returns, Concept of Black Money, Refund of Excess Tax and Special Point For Non Resident Indians (NRIs).
Government of India needs money for its expenses and development activities which is collected in the form of taxes and Income Tax is the biggest source of revenue for government of India.
As per the latest data released by the Indian Income Tax Department, out of 8.6 lakh Doctors in the country, only 4.2 lakh Doctors paid income tax. 2.6 lakh Lawyers are tax payers out of 13 lakh Lawyers in the country and only 1 lakh Chartered Accountants are tax payers out of 2.8 lakh Chartered Accountants. So, there seems to be a huge gap which Government might try to cover to increase the number of taxpayers and revenue, in the coming years. This necessitates a brief review of laws and provisions relating to income tax return filing in our country.
In India, Income of the whole financial year is clubbed together under following five heads, i.e.
4. Income from Capital Gains and
5. Income from Other Sources (For those income/s not covered in above 4 heads).
Under the provisions of Indian Income Tax Laws, if the income of a person exceeds the basic exemption limit, filing of Income Tax Return (ITR) is required. However, In those cases where a person have an asset or financial interest in an entity located outside India or he/she is signing authority in a foreign bank account, then filing of Income Tax Return (ITR) is mandatory even if income is below exemption limit.
Section 139 of the Income Tax Act, 1961 provides that;
139. [(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.
List Of Income Tax Returns Applicable
|S. NO.||ITR Form||Applicable For The Category|
|1.||ITR 1||For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh.|
|2.||ITR 2||For Individuals and HUFs not carrying out business or profession under any proprietorship.|
|3.||ITR 3||For individuals and HUFs having income from a proprietary business or profession.|
|4.||ITR 4||For presumptive income from Business & Profession.|
|5.||ITR 5||For persons other than:-
(iii) Company and
(iv) Person filing Form ITR-7.
|6.||ITR 6||For Companies other than companies claiming exemption under section 11.|
|7.||ITR 7||For 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).|
|S. No.||Type of Assessee||Time 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 audited (Tax Audit cases).||30th September|
|2.||In the case of an assessee who is required to furnish a report referred to in section 92E (Cases involving Transfer Pricing provisions).||30th November|
|3.||In case of any other assesse.||31st July|
The last date for filing Income Tax Return is July 31 of each year (with few certain exceptions as provided above) which can be belatedly filed up to March 31. For example, Income Tax Returns for Assessment Year 2018-19 (Financial Year 2017-2018), can be filed belatedly till 31st March 2019. However a service fees/late filing fees will be applicable for the filings beyond specified dates.
Section 139 (4) (w.e.f. 1-4-2017) provides that:
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.
Section 139 (5) (w.e.f. 1-4-2017) provides that:
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.
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.
The income which is taxable but not disclosed in proper Income Tax Return and due taxes have not been paid, is considered Black Money.
Although filing Income Tax Return is a legal requirement with a consequential penalties etc. for non-compliance, one can claim refund of excess taxes (TDS), after adjusting the final tax with the same.
Although the provisions mentioned above are applicable for NRIs also, there are certain points which are of special significance for NRIs and while filing Income Tax Returns in India, NRIs should consider the same, for example;
1. Finding out Residential status,
2. Taking benefits of Double Tax Avoidance Agreement (DTAA),
3. Special Deductions and Exemptions for NRIs etc.
The Author is a Mumbai based, Practicing Chartered Accountant. In case of queries and suggestions, please contact. Mobile: 9312412020, Email: [email protected]
Disclaimer- This write up is only for awareness purpose and professional opinion may be required in specific cases depending upon the particular facts.
(Republished With Amendments)