Return of Income

Obligation to file Return of Income

* w.e.f. A.Y. 2015-16; # w.e.f. A.Y. 2016-17; ** w.e.f. 1-4-2018

Maximum amount not chargeable to tax for A.Y. 2018-2019

No Obligation to File Return of Income

1. No obligation is incurred on the assessee referred in sections 115A(1), 115AC(1), 115BBA or 115D to file Return under section 139(1), if he derives no other income other than those specified in the above Sections. Further, tax deductible at source should be deducted thereon from such income.
2. The Central Government has by notification exempted individuals having income up to ₹5,00,000 from filing of return of income subject to fulfilment of conditions for AY 2012-13

Due Dates for filing Return of Income for A.Y. 2018-2019

Where the last day for filing return of income/loss is a day on which the office is closed, the assessee can file the return on the next day afterwards on which the office is open and, in such cases, the return will be considered to have been filed within the specified time limit — Circular No. 639, dated 13-11-1992.

Return of Income to be verified by

^ The condition of signing the return of income has been omitted by the Finance (No. 2) Act, 2014 and hence w.e.f. 1-10-2014, return of income only needs to be verified in prescribed manner.

Forms for Return of Income for A.Y. 2018-2019

Mode of Filing of return

Electronic Verification Code (EVC) is a 10 digit alphanumeric code which can be generated through e-filing portal and is valid for 72 hours. Following are the modes to E-verify Return

• EVC received in Registered Mobile number and e-mail. This option would be available for taxpayer whose total income is Less than ₹ 5 lakh and there is no refund.
• Aadhaar OTP i.e. Mobile number registered with Aadhaar card is linked and OTP is sent to that Mobile number and e-mail ID
• Login to e-Filing through Net Banking facility
• Download the ITR-V, sign it manually and send it to CPC through post within the time limit of 120 days from date of upload for your return to be treated as a valid return

From May 22, 2016 Electronic Verification Code (EVC) can be generated by pre-validating your bank account on the e-Filing website. All major banks have launched this facility which will facilitate its customers, who may not have a net-banking account, to e-verify their return.

Peculiarities of new returns

1. Each year new returns applicable are notified
2. New Forms are attachment less. Return is not required to be accompanied with any documents viz. computation of income, financial statements, TDS Certificates, tax challans or audit reports (other than TP Report). However subsequently the Assessing Officer may call for such documents.
3. SAHAJ ITR 1 and SUGAM ITR 4 are introduced for faster and error free digitisation. These forms are coloured and contains standard machine readable features like specific marks, bar code, etc. In case pre-printed form is not used, forms need to be printed on durable paper with pre-specified coloured ink and other specifications.
4. Audit Report under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 10A, 10AA, 12A(1)(b), 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA or 115VW or notice under section 11(2)(a) need to be furnished electronically before the due date of filing the Income Tax Return (w.e.f. A.Y. 2014-15)
5. Audit Report under sections 44AB, 92E or 115JB need to be furnished electronically before the due date of filing the Income Tax Return (w.e.f. A.Y. 2013-14).
6. In case, return is transmitted electronically without digital signature, signed copy of acknowledgement generated online i.e. Form ITR-V is required to be submitted, within the specified period (currently 4 months), by ordinary/speed post to ITO, Bengaluru, (without any annexure, covering letter, etc.) or such other place as specified on acknowledgement.
7. No disallowances of pre-paid taxes shall be made by AO merely because TDS/TCS certificates or pre-paid challans not submitted along with return of Income. (Circular 3/2008 dated 21-5-2009).

Return of income claiming certain deductions or certain loss

1. Return furnished after due date, the deductions / benefits may not be available—
   1. Deductions under sections 10A, 10B, and section covered under Chapter C of Chapter VIA of the Act
   2. Allowability of losses incurred under business (other than unabsorbed depreciation), capital gains and/or from owning and maintaining race horses. However, Carry forward of losses under the head House property and unabsorbed depreciation is not affected even if the return is not filed within due date.
   3. Losses of specified business (Sec. 35AD) and Speculation Business.
2. Where any loss has been duly carried forward in accordance with the provisions of section 139(3) in earlier years, there is no obligation to file the intermediary return in which the benefit of set off is claimed or loss is required to be carried forward, to be filed within the due date.
3. Section 119(2)(b) empowers the CBDT to authorise any Income Tax Authority to admit an application or claim for any exemption, deduction, refund or any other relief under the Act after the expiry of the period specified under the Act, to avoid genuine hardship in any case or class of cases. The claim for carry forward of loss in case of a loss return is relatable to a claim arising under the category of any other relief available under the Act. Refer Cir. No. 8/2001 
   dated 16-5-2001.

Belated Return

• Return can be filed belatedly within one year from the end of assessment year or before completion of assessment whichever is earlier for A.Y. 2016-17
• Return can be filed belatedly before the end of the relevant assessment year or before completion of assessment, whichever is earlier w.e.f. A.Y. 2017-18
• However in case, return is not filed within the end of assessment year penalty under section 271F of ₹5,000 may be imposed. E.g. return of income for A.Y. 2016-2017 if not filed on or before 31-3-2017 penalty under section 271F may be levied. However with reduction in period of filing belated return, applicability of penalty under section 271F has been deleted w.e.f. 1-4-2018
• In case return, as required by sections 139(4A) (Trusts) / 139(4C) (specified Trusts, Institutions, Political Parties, etc.) is not filed on or before due date (31st July in case income before claiming exemption under section 11 exceeds maximum amount not chargeable to tax or 30th September where accounts are subject to audit), penalty of ₹100/- per day may be imposed under section 272A(2)(e).

Revised Return

Up to A.Y. 2016-17

• Return can be revised within one year from the end of assessment year or before completion of assessment whichever is earlier
• Belated Return cannot be Revised

A.Y. 2017-18 and onwards

• Return can be revised within one year from the end of assessment year or before completion of assessment whichever is earlier
• Even Belated Return can be Revised

Defective return

1. S. 139(9) lays that return of income would be defective in case not accompanied by the relevant annexure. W.e.f. 
   1-6-2013. A return which has been filed without payment of self-assessment tax along with interest shall be treated as a valid return.
2. However annexure less return scenario, return would be treated as defective in case return is not filed completely in the manner specified in the return form.
3. If the assessee fails to rectify the defects in the return of income within 15 days of intimation of defects by the Assessing Officer or specified period, the return will be treated as invalid return and the provisions of Income-tax Act will apply as if the assessee has failed to furnish the return.

Changes in ITR Forms for A.Y. 2018-19

Additional disclosure requirements for Ind AS Compliant 
Companies

• Applicable for ITR 6
• A new Schedule has been inserted for Ind AS Compliant companies wherein they shall be required to disclose the balance sheet and profit & loss account in the same format as prescribed under Division II of Schedule Ill to the Companies Act, 2013 (i.e., Ind AS Financial Statements).
• Necessary changes have been incorporated to enable the Ind AS Compliant companies to calculate the book profit in accordance with new provision of Sections 2A & 2C of Section 115JB.

Fees for late filing of return [Section 234F]

• Applicable for ITR 1 to 7
• A new row is added to enable the assessee to fill the details of late filing fees.

Details of Salary & House Property Income

• Applicable to ITR 1 and 4
• New ITR forms require the individual assessee to provide detailed calculation in case of salary & house property income instead of only the taxable figures.

Additional details to be furnished by taxpayers opting for 
presumptive scheme

• Applicable for ITR 4
• The new form seeks more financial details of business such as amount of secured/unsecured loans, advances, fixed assets, capital account etc.
• Also, GSTR No. of the Assessee and Turnover as per GST return filed by him

Transfer of TDS Credit to Other Person

• Applicable for ITR 2 to 7
• The ITR forms introduce new columns in TDS Schedule which would allow Dept. to easily correlate the PAN, amount of income and TDS thereon as disclosed by both the parties in their respective return of income. It would make it convenient for the assessee to claim the credit of tax deducted in name of another person.

Capital Gains in case of transfer of unquoted shares

• Applicable for ITR 2, 3, 5, 6 and 7
• It would now be mandatory for the investors to obtain the valuation report in case of sale of unquoted shares. To ensure that investors correctly report the capital gains from unlisted shares, the new ITR Forms require the FlIs and other assessees to provide the following information in respect of unlisted shares:

1. Actual Sales Consideration
2. FMV as determined in prescribed manner
3. Deemed Full value of consideration (higher of A or B)

Reporting of sum taxable as gift

• Applicable for ITR 2, 3, 5, 6 and 7
• New columns have been inserted in all lTR forms except ITR 1 and ITR 4 under 'Schedule OS' to report any income as specified in Section 56(2}(x).

Partners cannot use ITR 2

• An individual or an HUF, who is a partner in a firm, shall be required to file his ITR in Form ITR 3 only.

Revised Depreciation Schedule

• Applicable for ITR 3, 5 and 6
• The new ITR Forms have replaced the depreciation column of 50/60/80/100 percent with 40% in case of plant & machinery and building. New columns have also been inserted to enable the entities to claim proportionate depreciation in the event of business reorganisation, i.e., demerger, amalgamation, etc.
• Further, a field is added to disclose the disallowance to be made in respect of depreciation under section 38(2)if an asset is not exclusively used for business purpose.

Details of business transactions with registered and unregistered suppliers under GST

• Applicable for ITR 6
• A new Schedule has been inserted in ITR 6 which requires every company, who is not required to get its accounts audited under Section 44AB, to provide following details in respect of all transactions entered into during the year with a registered or unregistered supplier under GST:

1. Transactions in exempt goods or services
2. Transactions with composite suppliers
3. Transaction with registered entities and total sum paid to them
4. Transaction with unregistered entities

Assessee claiming DTAA relief is required to report more details

• Applicable for ITR 2, 3, 5 and 6
• Every assessee (resident or non-resident) claiming DTAA relief in India in respect of capital gains or income from other sources are required to provide details of applicable DTAA. The new ITR Forms seeks following additional details for current year:

1. Rate as per Treaty
2. Rate as per Income Tax
3. Section of the Income-tax Act
4. Applicable rate (lower of a or b)

Info relating to capital gains exemption to be furnished in detail

• Applicable for ITR 2, 3, 5 and 6
• The new ITR Forms introduce specific columns to report each capital gain exemption separately. Details of each capital gains exemption under Sections 54, 548, 54EC, 54EE, 54F, 54GB and 115F shall be reported in its applicable column now.
• Further, a taxpayer availing these capital gains exemptions is required to mention the date of transfer of original capital asset which was missing in earlier ITR Forms.

Disallowance of expenses in case of TDS Default (for residuary income)

• Applicable for ITR 2, 3, 5, 6 and 7
• The provisions of Section 40(a)(ia) disallow 30% of certain expenditures if tax is not deducted in respect of those expenditures in accordance with Chapter XVll-8 or if tax is deducted but not deposited on or before the due date for filing of return of income. The Finance Act, 2017 introduced the similar disallowance provision in case of income from other sources if tax is not deducted or not deposited in accordance with Chapter XVII-B. A new column has been inserted in the ITR Forms to report such disallowances.

Taxability on remission of trading liability in case of Income from Other Sources

• Applicable for ITR 2, 3, 5, 6 and 7
• The new ITR Forms require separate reporting of such remission or cessation, which is taxable as per Section 59, in Schedule OS.

Income from transfer of Carbon Credits

• Applicable for ITR 2, 3, 5, 6 and 7
• New ITR make consequential changes to report the income earned from carbon credits and tax thereon.

Impact on profit or loss due to ICDS Deviation

• Applicable for ITR 3, 5 and 6
• The new ITR forms require separate reporting of both profit andloss (and not on net basis) in Schedule 01, Schedule BP (Computation of income from business or profession) and Schedule ICDS.

Details of GST paid and refunded

• Applicable for ITR 3, 5 and 6
• The new ITR forms have introduced new columns to report CGST, SGST, IGST and UTGST paid by, or refunded to, assessee during the Financial Year.

Removal of Gender from Personal Information

• Applicable for ITR 2, 3 and 4
• Individual taxpayers who are filing income-tax return in Form ITR 2 or ITR 3 or ITR 4 are not required to mention the gender, i.e., male or female or transgender, as the column of gender has been removed.

Reporting of CSR Appropriations

• Applicable for ITR 6
• A new column has been inserted in ITR Form 6 to provide details of apportionments made by the companies from the net profit for the CSR activities.

Break up of payments/receipts in foreign currency

• Applicable for ITR 6
• A new schedule has been inserted in the ITR 6 wherein breakup of payment & receipts in foreign currency are required to be reported by an assessee who is not liable to get its accounts audited under section 44AB. Assessees are required to provide the details of payment made and sum received in foreign currency towards capital and revenue account.

Ownership information in case of unlisted company

• Applicable for ITR 6
• The new ITR 6 requires every unlisted company to provide details of all beneficial owners who are holding 10% or more voting power (directly or indirectly) at any time during the year 2017-18. These companies are required to provide the name, address, percentage of shares held and PAN of the beneficial owners.

Trusts to disclose more information in ITR

• Applicable for ITR 7
• Charitable or religious trusts filing income-tax return for the Assessment Year 2018-19 in Form ITR 7 shall be required to disclose following additional information:

1. Aggregate annual receipts of the projects/institutions run by the trust.
   However, the table asking details about the name and annual receipts of institutes covered under Sections 10(23C}(iiiab), (iiiac), (iiiad) and (iiiae) has been removed.
2. Date of registration or approval granted to the trust
3. Amount utilised during the year for the stated objects out of surplus sum accumulated during an earlier year.

Details of Fresh registration upon change in objects

• Applicable for ITR 7
• Consequential changes have been made in the Form ITR 7. A trust will be required to furnish the details if there is any change in its stated objects

No deduction for corpus donations made to other institutions

• Applicable for ITR 7
• In Schedule Tl (Statement of Income) all the corpus donations made by a trust to another registered trust shall be added back to the taxable income of the donor t rust.

Political Parties to confirm if cash donations are received

• Applicable for ITR 7
• The new ITR 7 requires the political parties to provide a declaration by selecting the 'Yes' or 'No' check-box to confirm whether it has received any cash donation in excess of ₹2,000.
• A political party is now required to disclose more information about the auditor who is signing the audit report of the political party.