CA Umesh Sharma

Karniti: Why and for whom Income Tax return Filing before 31st July is mandatory?

Arjuna (Fictional Character): Krishna, 31st July 2018 is near and many taxpayers are hurrying up for filing income tax returns. What are the points to be considered before filing income tax returns?

Krishna (Fictional Character): Arjuna, for the financial year 2017-18, taxpayers who are not liable for tax audit under Income Tax Act, i.e. Salaried persons, pensioners, businessmen having turnover upto Rs.1 crore, professionals having gross receipts upto Rs.50 lakhs, persons having income from house property and other sources and person not requiring to furnish report u/s 92E should file return upto 31st July 2018. There are many intricacies which should be followed by taxpayers.

Arjuna: Krishna,How can the taxpayers file returns?

Krishna:Arjuna, return filing has become very easy. The taxpayer should get registered on the website of the Income Tax Department through valid mobile number and email. The taxpayer should fill the e-return form available on the website and upload the same.

After uploading the return, signed copy of the acknowledgement is to be sent to CPC, Bangalore within 120 days. The assessee can also e-verify their return Otherwise a digital signature option is also available. E-filing of returns is compulsory for assessees having income above Rs.5 lakhs. Assessees having income below Rs.5 lakhs and no refund is claimed in the return of income and super senior citizen  have the option of either efiling the return or manually submitting it to the local income tax department. However this option is available only in case of filing of ITR 1 and 4

Arjuna:Krishna,what are the major changes in the forms of return to be filed for financial year 2017-18 which needs to be take care off by these asseseees?

Krishna:Arjuna,the taxpayer should select proper form of return applicable to him based on his sources of income. Some of the major changes in ITR for year A.y 2018-19 are as follows :

1. Assessee with income from salary, one house property and other sources (like interest) use the most basic one-page ITR-1 or Sahaj form. The form now seeks additional details of salary. The taxpayer first needs to fill up salary amount excluding allowances, perquisites, and so on. Then, provide details pertaining to perquisites, allowances, ‘profit in lieu of salary’, etc. Up to Assessment year 2017-18, an assessee was required to mention only the taxable figure of salary

2. The new ITR-1 Sahaj form also seeks details about income from property such as gross rent received/ receivable/ letable value; tax paid to local authorities; annual value; interest payable on borrowed capital; and income chargeable under the head house property. The form now wants the taxpayer to provide the break-up of gross rent received, tax paid to local authorities, etc.

3. The new ITR forms have specific columns to report each capital gain exemption separately. Details of each capital gains exemption under Sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F need to be reported in its applicable column now. A taxpayer availing these capital gains exemptions needs to mention the date of transfer of original capital asset which was missing in earlier ITR forms.

4. The business owner also needs to provide GST number of the assessee and the amount of turnover based on the GST return filed. Earlier, business owners reported a different turnover for income tax and other indirect taxes based on their convenience. The details disclosed in the ITR can now be crossed-checked with the GST filing. These details are essentially sought after the implementation of Goods and Services Tax (GST).

5. The newly notified ITR-2 form is no longer applicable for individuals who have profits and gains from any business or profession. The assessee now needs to use ITR-3 to file the return. Until last year, a partner was allowed to file the return using ITR-2.

6. If the return is furnished after the due date (July 31) but before December 31, the penalty is Rs 5,000 and Rs 10,000 after that. Tax experts believe that the income-tax software will not allow assessees to start filing their returns unless they pay the penalty first. Relevant changes have been included in the new ITR forms wherein a new row is added to enable the taxpayer to fill the details of late filing fees.

For Detail Analysis on Changes in ITR, please refer

Arjuna:Krishna, What care should be taken by salaried persons while filing income tax returns?

Krishna: Arjuna, Salaried persons unnecessarily take tension. They should not really worry as Form 16 issued by the employer contains all the details of income, deductions, tax deducted, etc. They should just confirm that Form 16 and Form 26AS match and file the return accordingly. The real problem arises only when any income other than salary or any deduction has not been included in Form 16 such as interest on saving bank account, FDR, rent from house property, capital gains, LIC payments, etc has not been included in Form 16. To avoid last minute rush and additional payment of tax, complete information of income and deductions should be given to the employer beforehand, so that proper TDS will be deducted and there will be less difficulty while filing returns.

Arjuna:Krishna, please explain briefly what care should be taken by businessmen while filing income tax returns?

Krishna: Arjuna,you asked a very complicated question as every businessman has to prepare Profit and loss account and Balance Sheet as per the nature of his business or profession. The businessman may determine his profit/loss by comparing current year’s actual financials with the previous years. Further as on 31st March, depreciation, stock, accounts of debtors and creditors, etc. have to be accounted and reconciled. Also, the figures have to be matched with other tax return like GST return. Form 26AS is also required to be matched. The most important thing is that it is mandatory for businessmen having turnover upto 2 crore to show minimum 6% to 8% profit, otherwise tax audit provisions will be applicable. And yes, it is very important to file Loss return before 31st July 2018, otherwise few loss cannot be carried forward to next year.

Arjuna: Krishna, does this mean that the return needs to file on time?

Krishna: Arjuna,taxpayer may face trouble if the return is not filed in time. Along with interest on tax payable, additional interest for late filing of return u/s 234A will also be required to be paid. Loss cannot be carried forward as given above. Further, if any mistake is noticed a belated return cannot be revised (wef A.y 2017-18 belated return can be revised). Also, in case of refund interest will not be received for the period of delay. It means interest will be received from the date of filing of return. This will result in hardship to the taxpayer. Apart from this,  as pr section 234F, if return is filed after 31st July 2018 but on or before 31st  December 2018 a penalty of Rs.5000 may be levied and a penalty of Rs 10,000 shall be levied if the return is files after 31st December 2018. However the amount of penalty shall not be more than Rs 1,000 if the total income does not exceeds Rs 5 Lacs. Return should be filed every year as efiling of return is permissible for only for one previous years (i.e Return for A.y 2018-19 can be filed only upto 31.03.2019. Many taxpayers file returns of previous years all at once at the time of applying for bank loan. This may create problems in the loan proposal, hence regular and timely filing of returns is beneficial.

Arjuna: Krishna, Why many taxpayers are so lethargic towards filing of returns?

Krishna: Oh Arjuna, Compliance of simple law is also difficult, be it any law. Like one become restless while waiting at the signal for one minute also.Everyone is desperate for the green signal to come so that we can go and out of this many people break the signal rules and run away. In the same way, inspite of the fact that the taxpayer is aware of the 31st July due date for filing returns since years, there is hurry and rush at the eleventh hour. Due to this, there is stress and return filing becomes burdensome. If proper information regarding income and tax is provided to the department through return, the department also avoids giving trouble by sending notices. Otherwise, legal proceedings between the taxpayer and department initiate which creates problem for everyone. In today’s era of information technology and computerization, it is difficult to find a hideout for tax evaders. The only option available to the taxpayer is timely and correct payment of tax and filing of returns, if wants to live in peace of law.

Dear Taxguru lovers, your comments please.

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(Republished With Amendments)

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  1. Mahesh Maisuria says:

    Dear Sir,
    I am 60 TDS has been deducted by bank on 1 year FD of Rs.20.00 lac. I have no income and falls under 10% tax bracket. Can I claim refund TDS or not by filing return?

  2. Dev Bajwa says:

    Sir I am salaried pers and I file my ITR-1, If I choose sec 139(4)and filed before 31 Jul and receipt showing refund, Will it effect to refund or not

  3. Dipankar Parui says:

    My salaried income is Rs-5,95,673/- and I have an exemption of U/s-10 (13A)for HRA of Rs-34941/- which is in excess of Rs-5000/-. I tried ti file online return in ITR-1 but it is not working perhaps because of this U/s-10 (13A)exemption. Can you please suggest me which ITR Form will serve my purpose-ITR-2?
    As I have only one day left, please suggest me as quick as possible.

  4. Shashi says:

    Even deducted tax from my salary. But not allowed HRA & LTA after documents submitted. Pls help me in yhis regard through call or mail..

  5. Shashi says:

    I’m salaried person. In form 16 my company people not added rent allowance & LTA, even I submitted rent agreement & LTA bill. Now can I add the same while filing returns? Pls reply & help me.

    Eith regards,

  6. Anup Tawde says:

    Every year, I always end up with lack of complete knowledge of tax deductions and filling return. I always rely on consultants who come to our organizations for ITR. I would really like to get complete idea about tax savings, requirements for filling ITR and almost everything about tax.

    I am ready to pay fees if any but would like to meet personally or on a phone call to understand tax payment, ITR, savings, etc, etc, etc, etc.

    I am real frustrate with this ITR and everything…

    Email or a phone call from you would be really appreciated.

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