Income Tax Return

WHAT IS A RETURN OF INCOME?

It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income. These forms can be downloaded from www.incometaxindia.gov.in

WHAT ARE THE DIFFERENT MODES OF FILING THE RETURN OF INCOME?

The Return Form can be filed with the Income-tax Department in any of the following ways, -(i) by furnishing the return in a paper form;(ii) by furnishing the return electronically under digital signature;(iii) by transmitting the data in the return electronically under electronic verification code;(iv) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;Note:Where the return of income is filed in the manner given at (iv) without digital signature, then the taxpayer should take two printed copies of Form ITR-V. One copy of ITR-V, duly signed by the taxpayer, is to be sent (within the period specified in this regard, i.e., 120 days) by ordinary post or speed post to "Income-tax Department – CPC, Post Bag No. 1, Electronic City Post Office, Bengalore-560100 (Karnataka). The other copy may be retained by the taxpayer for his record.

FOR WHOM E-FILING OF RETURN IS MANDATORY?

Following taxpayers shall file their return of income only through e-filing mode:
(1) From the assessment year 2015-16 onwards any asessee filing ITR 1/2/2A (other than an individual of the age of 80 years or more at anytime during the previous year) having a refund claim in the return or having total income of more than Rs. 5,00,000 is required to furnish the return of income electronically with or without digital signature or by using electronic verification code.
(2) Every company shall furnish the return of income electronically under digital signature. In other words, for corporate taxpayer e-filing with digital signature is mandatory.
(3) A firm or an individual or a Hindu Undivided Family (HUF) whose books of account are required to be audited under section 44AB shall furnish the return of income electronically under digital signature. In other words, in such a case, e-filing with digital signature is mandatory.
(4) A resident assessee having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India or income from any source outside India shall furnish the return of income electronically with or without digital signature or by using electronic verification code.
(5) Taxpayers claiming relief under section 90, 90A or 91 shall furnish the return of income electronically with or without digital signature or by using electronic verification code.
(6) A person who is required to file ITR – 5 shall file the same electronically with or without digital signature. However, a firm liable to get its accounts audited under section 44AB shall furnish the return electronically under digital signature.
(7) A taxpayer who is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW or to give a notice under section 11(2)(a) shall furnish the return electronically.
(8) Return Form ITR- 3 is to furnish electronically in the following modes:(i) by furnishing the return electronically under digital signature;(ii) by transmitting the data in the return electronically under electronic verification code;(iii) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V.
(9) Return Form ITR-4 is to be furnish electronically in the following modes:(i) by furnishing the return electronically under digital signature;(ii) by transmitting the data in the return electronically under electronic verification code;(iii) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;However, where the books of accounts are required to be audited under section 44AB, the return is required to be furnished in the manner provided at (i) i.e. e-filing with digital signature.
(10) Return Form ITR – 7 is to be furnished electronically in the following modes :(i) by furnishing the return electronically under digital signature;(ii) by transmitting the data in the return electronically under electronic verification code;(iii) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;However, a political party shall compulsorily furnish the return in the manner mentioned at (i) above. Where the Return Form is furnished in the manner mentioned at (iii), the assessee should print out two copies of Form ITR-V. One copy of ITR-V, duly signed by the assessee, has to be sent by ordinary post to Post Bag No. 1, Electronic City Office, Bangalore-560100 (Karnataka). The other copy may be retained by the assessee for his record.

IF YOU FAIL TO FURNISH YOUR RETURN WITHIN THE DUE DATE, WILL YOU BE FINED OR PENALIZED?

Yes, if you have not furnished the return within the due date, you will have to pay interest on tax due. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F.

CAN A RETURN BE FILED AFTER THE DUE DATE?

Yes, if one could not file the return of income on or before the prescribed due date, then he can file a belated return. A belated return can be filed within a period of one year from the end of the assessment year or before completion of the assessment, whichever is earlier. Return filed after the prescribed due date is called as a belated return. However, w.e.f. 01-04-2017, belated income-tax return for the Assessment Year 2017-18 and onwards can be filed at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. A belated return attracts interest and penalty as discussed in previous FAQ.E.g., In case of income earned during FY 2015-16, the belated return can be filed up to 31st March, 2018.

HOW MANY TIMES CAN I REVISE THE RETURN?

Theoretically a return can be revised any number of times before the expiry of one year from the end of the assessment year or before assessment by the Department is completed, whichever event takes place earlier.

WHAT PRECAUTIONS SHOULD BE TAKEN WHILE FILING THE RETURN OF INCOME?

Following is the list of few important steps/points/precautions to be kept in mind while filing the return of income:

The first and foremost precaution is to file the return of income on or before the due date. Taxpayers should avoid the practice of filing belated return. Following are the consequences of delay in filing the return of income :

Loss (other than house property loss) cannot be carried forward.

Levy of interest under section 234A.

Penalty of Rs. 5,000 under section 271F can be levied.

Exemptions/deductions under section 10A, section 10B, 80-IA, 80-IAB, 80-IB, 80-IC , 80-ID and 80-IE are not available.

Belated return cannot be revised under section 139(5). However, w.e.f. 01-04-2017, income-tax return for the Assessment Year 2017-18 and onwards filed under section 139(1) or section 139(4)[belated return' can also be revised.

Taxpayer should download Form 26AS and should confirm actual TDS/TCS/Tax paid. If any discrepancy is observed then suitable action should be taken to reconcile it.

Compile and carefully study the documents to be used while filing the return of income like bank statement/passbook, interest certificate, investment proofs for which deductions is to be claimed, books of account and balance sheet and P/L A/c (if applicable), etc. No documents are to be attached along with the return of income.

The taxpayer should identify the correct return form applicable in his case.

Carefully provide all the information in the return form.

Confirm the calculation of total income, deductions (if any), interest (if any), tax liability/refund, etc.

If any tax is payable as per the return of income, then the same should be paid before filing the return of income, otherwise return would be treated as defective return.

Ensure that other details like PAN, address, e-mail address, bank account details, etc., are correct.

After filling all the details in the return of income and after confirmation of all the details, one can proceed with filing the return of income.

n case return is filed electronically without digital signature and without electronic verification code do not forget to post the acknowledgement of filing the return of income at CPC Bangalore (as discussed earlier).For details on e-filing please logon to www.incometaxindiaefiling.gov.in ………………………………………….CA. Rajiv Bansal (Partner at Garg Bansal & Company)