CA Brijesh Baranwal
Government of India needs money for its expenses and development activities which is collected in the form of taxes and Income Tax is probably the biggest source of revenue of government of India.
As per Press Release dated 07.11.2017, the provisional figures of Direct Tax collections up to October, 2017 show that net collections are at Rs. 4.39 lakh crore which is 15.2% higher than the net collections for the corresponding period of last year. Net Direct Tax collections represent 44.8% of the total Budget Estimates of Direct Taxes for F.Y. 2017-18 (Rs. 9.8 lakh crore). Gross collections (before adjusting for refunds) have increased by 10.7% to Rs.5.28 lakh crore during April-October, 2017. Refunds amounting to Rs. 89,507 crore have been issued during April, 2017 to October, 2017.
In India, Income of the whole financial year is clubbed together under following five heads, i.e.
1. Income from Salary,
3. Income from Business/ Profession,
4. Income from Capital Gains and
5. Income from Other Sources (For those income/s not covered in above 4 heads).
INCOME TAX RETURN-FILING REQUIREMENTS
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;
[(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 asses sable 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 FOR AY 2017-2018 (FY 2016-2017)
|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).|
TIME LIMIT FOR FILING INCOME TAX RETURN
|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|
FILING OF BELATED RETURN
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 2017-18 (Financial Year 2016-2017), can be filed belatedly till 31st March 2018.
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.
REVISION OF INCOME TAX RETURN
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.
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.
CONCEPT OF BLACK MONEY
The income which is taxable but not disclosed in proper Income Tax Return and due taxes have not been paid, is considered Black Money.
REFUND OF EXCESS TAX
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.
SPECIAL POINTS FOR NRIs
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: firstname.lastname@example.org
Disclaimer- This write up is only for awareness purpose and professional opinion may be required depending upon the particular facts.