RETURN OF INCOME
1. OVERVIEW: - Section 139(1) of the act requires every person :- a) Being a company or firm to file a return of income
b) Local authority to file return if total income exceeds the exemption limit c) Every other person to file a return of income if his total income(without giving
effect to chapter VI A and provisions of Section 10A, 10B, 10BA) or total income of any other person in respect of which he is assessable exceeds the exemption limit. d) Although in point (b) and (c) only persons whose income exceed exemption limit
are required to file a return of income but law do not stop other persons to file their return of income.
2. DUE DATE OF FILING RETURN OF INCOME: - The due date of filing return of income in prescribed form is:-
a) Where assessee is:-
Company or
Any other person(other than company) whose accounts are audited under this act or any other law in force or
Working partner of firm (whose accounts are audited),
The assessee is required to file his return of income by 30 September of the relevant assessment year.
b) In any other case, assessee is required to file his return of income by 31 July. 3. RETURN OF LOSS(section 139(3)): - Section 139(3) read with section 80 requires an
assessee to compulsorily file a return of loss u/s 139(3) to carry forward some losses, the provisions of section 139(3) shall apply in the same manner as in section139(1). For carry forward of loss it is necessary that return is filed by due date.
Return is necessary for carry forward of: - Business loss
Speculation business loss Capital gain loss
Loss on account of owning and maintaining horses Return is not necessary for carry forward of: -
House property loss
Loss of business specified u/s 35AD Unabsorbed depreciation, etc. NOTES: -
Section 139(3) read with section 80 do not stop set off of loss in current year even if return is not filed it just prohibits carry forward of such loss
It is to be noted that current year loss cannot be carried forward if return is not filed but in this case, losses pertaining to preceding years can be carried
forward if return for these years is filed by due date.
4. BELATED RETURN(Section139(4)): - If return is not filed u/s 139(1) or within time allowed u/s 142(1) by A.O. than also assessee can file a belated return: -
Within 1 year from the end of relevant assessment year or
Before expiry of best judgment assessment u/s 144 Whichever is earlier.
5. RETURN OF CHARITABLE TRUST OR INSTITUTION: - Every person who is in receipt of following income:-
Income from property held under trust whose income is wholly or In part only for religious or charitable purposes
Income by way of voluntary contribution on behalf of such trust.
Must file return of income in ITR-7 if such income before allowing exemption u/s 11 and 12 exceeds the exemption limit must file his return of income by 30th September.
CONSEQUENCES OF FAILURE TO FILE RETURN: - Penalty of Rs. 100 per day till default continues.
6. RETURN OF POLITICAL PARTY(Section 139(4B)): - If Total income of a political party before allowing exemption u/s 13A exceeds maximum amount not chargeable to tax, The CEO of such party is required to file it’s return of income. The due date if party wants to seek exemption u/s 13A is 30th September otherwise it is 31st July.
7. RETURN OF SPECIFIED INSTITUTIONS( Section 139(4C)): - Specified institutions means:-
Scientific research institution mentioned in section 10(21)
News agency mentioned in section 10(22B)
Association for promotion of certain institutions and professions referred in section 10(23A)
Certain khadi and village development associations referred in section 10(23B)
Institutions or funds referred in section 10(23C)
Education institutions other than those substantially financed by govt. if gross receipts exceed Rs. 1 Crore.
Trade union mentioned in section 10(24)
Such assesses shall be required to file their return of income, duly verified and in prescribed form if Total Income before allowing exemption u/s 10 exceeds maximum amount not chargeable to tax
8. RETURN OF CERTAIN INSTITUTIONS(Section 139(4D)): - Specified institutions means institutions mentioned in section 35 which were accepting donations for scientific research including colleges, recognized bodies.
These institutions are compulsorily required to file a return of income.
9. REVISED RETURN(section 139(5)): - An assessee can revise his return anytime before:-
One year from the end of relevant assessment year or
Completion of best judgment assessment u/s 144 Whichever is earlier.
Revised return substitutes the original return. NOTES:-
Belated return cannot be further revised
Revised return can be further revised within time limits prescribed under this section (section 139(5)).
10. Section 139(C): - Board may make any rules for certain persons or class of persons who may not be required to attach documents, certificates, etc. with the return of a person except that under section 139(D).
11. RETURN IN ELECTRONIC FORM(Section 139(D)): -The board may make any rules prescribing rules for:
Persons who are required to file return in electronic form Form and manner of filing return
Documents, statements, certificates, reports to be filed along with the report The computer resource to which such return is to be transmitted.
12. PAN(Permanent account Number): -Every person: -
a) Whose Total income Exceeds exemption limit and covers the case where he is assessable for any other person or
b) Whose Receipts of his business and profession exceeds Rs. 500000 or c) If he is required to file return of trust or charitable institution and d) Every employer who is required to file a return of fringe benefits
Must apply for PAN number to the A.O. in form 49A in time limit prescribed. Any other person may voluntarily apply for PAN number.
Besides this A.O. may also allot PAN number to any person. TIME LIMIT FOR APPLYING FOR PAN NUMBER: -
SITUATION TIME LIMIT
In case of persons in clause (a) On or before 31 May of the assessment year for which income is assessable In case of persons in clause (b) On or before end of that accounting year In case of persons in clause (c) On or before end of that accounting year In any other case On or before end of that accounting year
CERTAIN CASES WHERE PAN HAS TO BE QUOTED: -
In all returns or correspondences with income tax authority In all challans for payment of sum due under this act
In all documents pertaining to certain transactions as may be prescribed by board.
CERATIN TRANSACTIONS PRESCRIBED BY BOARD FOR QUOTINF OF PAN: - Sale/purchase of immovable property valued at 5 lakhs or more Sale/purchase of motor vehicles(other than two wheelers) which
require registration under motor vehicles act,1988
Deposit exceeding Rs. 50000 in post office savings bank account Contract for purchase/sale of securities for more than Rs.1 Lakh Payment for hotel/restaurant bills exceeding Rs. 25000 at one time Application for installation of telephone connection including
cellular connection.
Payment exceeding Rs. 50000 to:- Mutual fund company
Company for acquiring it’s shares
Company or institution for acquiring it’s debentures or bonds RBI for acquiring bonds issued by it.
Any person to whom PAN has not been allotted and enters into above transactions must file a declaration in Form No.60
Person who is in receipt of only agricultural income and to whom PAN has not been allotted and enters into above transactions must file a declaration in Form No. 61 INTIMATION OF PERSONS TO INFORM PAN TO CERTAIN PERSONS AND OBLIGATION OF THAT OTHER PERSON: -
a) In case TDS has been deducted: -
Person receiving such sum shall intimate his PAN to person deducting TDS Such person deducting tax shall quote this PAN on: -
All statements of perks furnished to employee All certificates of TDS given to that person
All statements of TDS given to income tax authorities.
b) Obligation of buyer, licensee, lessee or seller of alcoholic liquor, timber or any other forest product: -
Every buyer, lessee or licensee of these products shall intimate his PAN to persons responsible for collecting tax
Such persons collecting Tax shall Quote this PAN on:-
In all certificates furnished to such buyer, lessee, etc. of these products
In all statements furnished to income tax authorities in this regard. 13. SELF –ASSESMENT u/s 140A: - Every person before filing his return of income shall first
make self-assessment of income in the following manner: - a) calculate total income
b) calculate tax on such income c) add surcharge, if applicable
d) add Education cess@2% and secondary and higher education cess@ 1% e) Calculate relief u/s 89,90,etc.
f) Deduct MAT credit..
g) Add interest u/s 234A for late submission of return of income. IT IS CALCULATED AFTER DEDUCTION FROM TAX LIABILTY THE AMOUNT OF ADVANCE TAX, TDS, RELIEF u/s 89,90, etc.
h) Add interest u/s 234B for short or non- payment of advance tax
i) Add interest u/s 234C for short or non- payment of advance tax installments. j) Deduct amount of TDS from above calculated Liability
k) The above tax is self assessment tax and interest payable to authorities. 14. Signing the return of income ( section 140 ):
Assessee
Who should sign the return:
Individual By the individual himself or
where the individual concerned is absent from India , by the person duly authorized by him on his behalf ( i.e. person holding valid power of attorney and such power of attorney shall be attached to the return), and
where the individual is mentally incapacitated from attending to the affairs, by the guardian or person competent to act on his behalf, and
where it is not possible for individual to sign the return for any other reason, by any person duly authorized by him in his behalf.
HUF By the Karta, or
Where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of the family.
Company By the Managing Director thereof, or
where for any unavoidable reason such managing director is not able to sign or where there is no managing director, by any director of the company.
Firm By the managing partner, or
Where for any unavoidable reason, such managing partner is not able to sign or where there is no managing partner , by any major partner.
Limited Liability Partnership
By the designated partner thereof,
Where for any unavoidable reason, such designated partner is unable to sign or where there is no designated partner, by any partner thereof.
Local Authority By the Principal officer thereof
Political Party By the Chief Executive Officer ( CEO) of Political Party
