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Question 1. What is an ITR?
Answer:
a) ITR stands for Income Tax Return.
b) 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.
c) It also allows carry -forward of loss and claim of refund from the income tax department.
Question 2. What are the forms of returns prescribed under the Income Tax Law?
Answer: Under the Income-tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms). The forms of return prescribed under the Income-tax Law for filing of return of income for the assessment year 2020-21 (i.e., the financial year 2019-20) are as follows:
Return Form
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Brief Description
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ITR-1
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Also
known as SAHAJ is applicable to an individual having salary or pension income
or income from one house property (not a case of brought forward loss) or
income from other sources (not being lottery winnings and income from race
horses, income taxable under section 115BBDA or income referred in section
115BBDA or income referred in section 115BBE).
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ITR-2
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It
is applicable to an individual or a Hindu Undivided Family not having income
chargeable to income-tax under the head “Profits or gains of business or
profession”
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ITR-3
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It
is applicable to an individual or a Hindu Undivided Family who has any income
chargeable to tax under the head business or profession
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ITR-4
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Also
known as SUGAM is applicable to individuals or Hindu Undivided Family or
partnership firm who have opted for the presumptive taxation scheme of
section 44AD/ 44ADA/44AE.
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ITR-5
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This form can be used by a person being a firm, LLP, AOP, BOI, artificial
juridical person referred to in section 2(31)(vii), cooperative society and
local authority. However, a person who is required to file the return of
income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use
this form (i.e., trusts, political parties, institutions, colleges).
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ITR-6
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It
is applicable to a company, other than a company claiming exemption under
section 11 (exemption under section 11 can be claimed by charitable/religious
trust).
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ITR-7
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It
is applicable to a person including companies who are required to furnish
return under section 139(4A) or section 139(4B) or section 139(4C) or section
139(4D) (i.e., trusts, political parties, institutions, colleges).
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Note: ITR-V: It is the acknowledgement of filing the return of income.
Question 3. What are the different modes of filing of ITR?
Answer: 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, Bangalore-560100 (Karnataka). The other copy may be retained by the taxpayer for his record.
Question 4. Which mode of filing of return is applicable to whom?
Answer: The applicable return of income shall be furnished by a person mentioned in column (ii) of the Table below to whom the conditions specified in column (iii) apply, in the manner specified in column (iv) thereof:—
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Person
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Condition
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Manner of furnishing return of income
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(i)
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(ii)
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(iii)
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Individual
or Hindu undivided family
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(a) Accounts
are required to be audited under section 44AB of the Act;
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Electronically
under digital signature;
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(a) A
super senior citizen (whose age is 80 years or above at any time during the
previous year) who furnishes the return either in ITR-1 or ITR-4
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A.Electronically under digital signature; or
B.Transmitting the data electronically in the return under electronic verification code; or
C.Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form
ITR-V; or
D.
Paper form;
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(a) In
any other case
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A.Electronically under digital signature; or
B.Transmitting the data electronically in the return under electronic verification code; or
C.Transmitting the data in the return electronically and thereafter submitting the
verification of the return in Form ITR-V; ]
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Company
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In
all cases
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Electronically
under digital signature.
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A person required to
furnish the return in Form ITR-7
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(a)
In case of a political party;
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Electronically
under digital signature;
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(b)
In any other case
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A.Electronically under digital signature; or
B. Transmitting the data in the return electronically under electronic verification code; or
C. Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V.
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Firm
or limited liability partnership or any person (other than a person mentioned
in Sl. 1 to 3 above) who is required to file return in Form ITR-5
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(a)
Accounts are required to be audited under
section 44AB of the Act;
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Electronically
under digital signature;
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(b)
In any other case.
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A.Electronically under Digital Signature; or
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B. Transmitting the data in the return electronically under electronic verification code; or
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C. Transmitting the data in the return electronically and thereafter submitting the verification of the return in Form
ITR-V
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Question 5. Is it necessary to attach any documents along with the return of income?
Answer: ITR return forms are attachment less forms and, hence, the taxpayer is not required to attach any document (like proof of investment, TDS certificates, etc.) along with the return of income (whether filed manually or filed electronically). However, these documents should be retained by the taxpayer and should be produced before the tax authorities when demanded in situations like assessment, inquiry, etc.
As discussed above, no documents are to be attached along with the return of income, however, in case of a taxpayer who is required to furnish a report of audit under section 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 it electronically on or before the date of filing the return of income.
Question 6. Who can use ITR – 1 (SAHAJ)?
Answer: Return Form ITR - 1 (SAHAJ) can be used by an individual whose total income includes:
(1) Income from salary/pension; or
(2) Income from one house property (excluding cases where loss is brought forward from previous years); or
(3) Income from other sources (excluding winnings from lottery and income from race horses, income taxable under section 115BBDA or Income of nature referred to in section 115BBE).
Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used only when such income falls in any of the above categories.
Question 7. Who can use ITR – 2?
Answer: Form ITR – 2 can be used by an individual and Hindu Undivided Family who is not eligible to file ITR-1 Sahaj and not having income from “profit and gains of business or profession” and also not having income from “Profits and gains of business or profession” in the nature of interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from a partnership firm.
Further, in case, where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this Return Form can be used if income to be clubbed falls in any of the above categories.
Question 8. Who can use ITR – 3?
Answer: Form ITR – 3 can be used by an individual or a Hindu Undivided Family who is having income from profits and gains of business or profession. ITR – 3 is also required to be filed by a person whose income is chargeable to tax under the head “Profits and gains of business or profession” is in the nature of interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from a partnership firm.
Question 9. Who can use ITR – 4 (SUGAM)?
Answer: Form ITR – 4 (SUGAM) can be used by an Individual/HUF/Firm (Other than LLP) whose total income for the year includes:
(a) Business income computed as per the provisions of section 44AD or44AE; or;
(b) Income from Profession as computed as per the provisions of44ADA; or
(c) Income from salary/pension; or
(d) Income from one house property (excluding cases where loss is brought forward from previous years); or
(e) Income from other sources (excluding winnings from lottery and income from race horses dividend income in excess of Rs. 10 lakhs or unexplained Income, etc. as referred to in section 115BBE)
Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used where income to be clubbed falls in any of the above categories.
Question 10. Who can use ITR – 5?
Answer: Form ITR – 5 can be used by a person being a firm, LLP, AOP, BOI, Artificial Juridical Person (AJP) referred to in section 2(31)(vii), the local authority referred to in section 2(31)(vi), representative assessee referred to in section 160(1)(iii) or (iv), cooperative society, a society registered under Societies Registration Act, 1860 or under any other law of any State, trust other than trusts eligible to file Form ITR – 7, the estate of the deceased person, the estate of an insolvent, business trust referred to in section 139(4E) and investments fund referred to in section 139(4F).
Question 11. Who can use ITR – 6?
Answer: Form ITR – 6 can be used by a company, other than a company claiming exemption under section 11 (charitable/religious trust can claim an exemption under section 11).
Question 12. Who can use ITR – 7?
Answer: Form ITR – 7 can be used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e., trusts, political party, institutions, colleges).
Question 13. How to file the return of income electronically?
Answer: Income-tax Department has established an independent portal for e-filing of return of income. The taxpayers can log on to www.incometaxindiaefiling.gov.in for e-filing the return of income.
Question 14. What are the due dates for filing of ITRs?
Answer: Due date of filing of return of income are as follows:
S.No
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Status
of the taxpayer
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Due
Date
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1
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Any
company other than a company who is required to furnish a report in Form No.
3CEB under section 92E (i.e. other than covered in 2 below)
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October
31 of the assessment year
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2
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Any
person (maybe corporate/non-corporate) who is required to furnish a report
in Form No. 3CEB under section 92E
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November
30 of the assessment year
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3
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Any
person (other than a company) whose accounts are to be audited under the
Income-tax Law or under any other law
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October
31 of the assessment year
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4
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A
working partner of a firm whose accounts are required to be audited under
this Act or under any other law.
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October
31 of the assessment year
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5
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Any other assessees
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July
31 of the assessment year.
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Note: To provide relief during the COVID-19 pandemic, the Finance Minister, Smt. Nirmala Sitharaman had announced an extension of due dates for filing of Income-tax Return for the Assessment Year 2020-21, during a press conference held on May 13, 2020. Now, the due dates falling on July 31, 2020, and October 30, 2020, for the Assessment Year 2020-21 shall stand extended to November 30, 2020.
Question 15. Can a return be filed after the due date?
Answer: Return of income which has not been furnished on or before the due date specified under section 139(1) is called a belated return. Belated return of income is furnished under section 139(4). Any person who has not furnished a return of income within the time period allowed under section 139(1) or within the time period allowed under a notice issued under section 142(1), may furnish a return for any previous year
- at any time before the end of the relevant assessment year or before completion of the assessment, whichever is earlier.
However, a belated return attracts late filing fees under section 234F.
As per section 234F, late filing fees of Rs.5,000 shall be payable if return furnished after the due date specified under section 139(1) but before 31st December of the assessment year. In other cases, late filing fees of Rs. 10,000 is payable. However, the amount of late filing fees to be paid cannot exceed Rs.1,000 if the total income of the person does not exceed Rs.5 lakhs.
Question 16. If I have paid excess tax how will it be refunded to me?
Answer: The excess tax can be claimed as refund by filing your Income-tax return. It will be refunded to you by crediting it in your bank account through ECS transfer. The department has been making efforts to settle refund claims at the earliest.
Question 17. If I have committed any mistake in my original return, am I permitted to file a revised return to correct the mistake?
Answer: (a) A return of income can be revised at any time during the assessment year or before the assessment made whichever is earlier.
(b) If an original return has filed in paper format or manually, then technically it cannot be revised by online mode or electronically.
Question 18. How many times can I revise the return?
Answer:
(a) If a person after furnishing the return finds any mistake, omission or any wrong statement, then return should be revised within the prescribed time limit.
(b) A return can be revised before the end of the Assessment Year or before the completion of the assessment; whichever is earlier.
(c) If an original return has filed in paper format or manually, then technically it cannot be revised by online mode or electronically.
(d) Revised return can be filed online under section 139(5).
Question 19. Am I required to keep a copy of the return filed as proof and for how long?
Answer: Yes, since legal proceedings under the Income-tax Act can be initiated up to four or six years (as the case may be) prior to the current financial year, you must maintain such documents at least for this period. However, in certain cases the proceedings can be initiated even after 6 years, hence, it is advised to preserve the copy of return as long as possible. Further, after the introduction of the e-filing facility, it is very easy and simple to maintain a copy of the return of income.
Question 20. There are various deductions that are not reflected in Form 16 issued by my employer. Can I claim them in my return?
Answer: Yes, it can be claimed if you are otherwise eligible to claim the same.
Question 21. Why is return filing mandatory, even though all my taxes and interests have been paid and there is no refund due to me?
Answer: Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the Department by way of filing the return of income. Only then the Government assumes rights over the taxes paid by you. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.
Question 22. Am I liable for any criminal prosecution [arrest/imprisonment, etc.] if I don’t file my Income-tax return, even though my income is taxable?
Answer: Non-payment of tax attracts interests, penalty and prosecution. The prosecution can lead to rigorous imprisonment from 3 months to 2 years (when the tax sought to be evaded exceeds Rs. 25,00,000 the punishment could be 6 months to 7 years).
Question 23. What is Form 26AS?
Answer: A taxpayer may pay tax in any of the following forms:
(1) Tax Deducted at Source (TDS)
(2) Tax Collected at Source (TCS)
(3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.
The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer). Form 26AS is an annual statement maintained under Rule 31AB of the Income-tax Rules disclosing the details of the tax credit in his account as per the database of Income-tax Department.
In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.
Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS. However, the scope of Form 26AS has been expanded w.e.f. 01-06-2020. A new rule 114-I has been inserted to the Income-tax Rules, 1962 which provides that an annual information statement in Form No. 26AS shall be uploaded, by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) or any person authorised by him, in the e-filing account of the assessee. Such statement shall be uploaded within 3 months from the end of the month in which the information is received by him.
New Form 26AS is divided into 2 parts.
Part A contains certain basic information of the assessee, i.e., Permanent Account Number, Aadhaar number, Name, date of birth/Incorporation, Mobile number, Email address and address.
Part B contains the information in respect of the following transaction:
a) Information relating to tax deducted or collected at source;
b) Information relating to Specified Financial Transactions (SFT);
c) Information relating to the payment of taxes;
d) Information relating to demand and refund;
e) Information relating to pending proceedings;
f) Information relating to completed proceedings; and
g) Information received from any officer, authority or body performing any functions under any law or information received under an agreement referred under section 90 or section 90A or information received from any other person to the extent it may be deemed fit in the interest of the revenue.
Question 24. What to do if discrepancies appear in actual TDS and TDS credit as per Form 26AS?
Answer: Every person deducting tax at source has to furnish the details of tax deducted by him to the Income-tax Department. The details will cover the name of the deductee, Permanent Account Number of the deductee, amount of tax deducted, the amount paid to the deductee, date of payment of TDS to the credit of Government, etc. On the basis of the details of TDS provided by the deductor, the Income-tax Department will update Form 26AS of the deductee.
Many times the actual amount of TDS and TDS credit as appearing in Form 26AS may differ and it may happen that the TDS credit appearing in Form 26AS may be less as compared to actual TDS, this may happen due to reasons like non-furnishing of TDS details to the Income-tax Department by the deductor, deducting the tax in incorrect Permanent Account Number, etc. In such a case the deductee should approach the deductor and request him to take the necessary steps to rectify the discrepancy due to the above reasons.
The Income-tax Department updates the TDS details in Form 26AS on basis of details provided by the person deducting the tax (i.e., the deductor), hence, if there is any default on the part of deductor like non -furnishing of TDS details (i.e., TDS return) to the Income-tax Department, deducting the tax in incorrect Permanents Account Number, etc. then Form 26AS will not reflect the actual TDS. In such a case, the taxpayer may not be able to claim the credit of correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference if any.
If the discrepancy is due to the deductor, then he may file the TDS/TCS correction statement and correct the same.
Question 25. What precautions should be taken while filing the return of income?
Answer: The followings are the important steps/points/precautions to be kept in mind while filing the return of income:
1) The first and foremost precaution is to file the return of income on or before the due date. Taxpayers should avoid the practise of filing belated return. Following are the consequences of delay in filing the return of income/ Loss (other than house property loss):
a. Losses cannot be carried forward.
b. Levy of interest under section 234A.
c. Late filing fees under section 234F is levied for return filed from A.Y 2018-19 onwards. The late filing fee of Rs. 5,000 shall be payable if return furnished after the due date but before 31st December of the assessment year. In other cases, late filing fees of Rs. 10,000 is payable. However, the amount of late filing fees to be paid cannot exceed Rs. 1,000, if total income does not exceed Rs. 5 Lakh.
d. Exemptions under section 10A, section 10B, are not available.
e. Deduction under 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID and 80-IE, are not available.
f. Deduction under 80IAC, 80IBA, 80JJA, 80JJAA, 80LA, 80P, 80PA, 80QQB and 80RRB are not available. (From A.Y 2018-19)
2) A 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.
3) 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.
4) 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.
5) Ensure that other details like PAN, address, e-mail address, bank account details, etc., are correct.
6) 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. In case of 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 within 120 days of filing return of income.
Article By: Ms Bhavya Sharma, a Practising Company Secretary from Delhi. In order to know more about the filing of return of income or any related queries thereto, you can contact us at legal@bhavyasharmaandassociates.com or for more details you can visit: www.bhavyasharmaandassociates.com
Disclaimer: Although due care and diligence have been taken in the preparation and uploading this Article, Bhavya Sharma & Associate shall not be responsible for any loss or damage, resulting from any action taken on the basis of the contents of this Article. Anyone wishing to act on the basis of the material contained herein should do so after cross-checking with the circulars, notifications, applicable acts, press release issued by the concerned department or seek appropriate counsel for their situation.
Footnotes:
[1] FAQs published by the Income Tax Department
[2] Income Tax Act, 1961
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