RETURN OF INCOME
Income earned during previous year is assessed in the assessment year. It is mandatory for every taxpayer to furnish the details of his income to the Income-tax Department. These details are to be furnished in the prescribed form known as Income Tax Return (Return of Income).
Persons required to file the Income Tax Return :
The provisions relating to filing of income tax return depends upon the status of the taxpayer. The information in this regard is given below:
A) In the case of an Individual/ HUF/ AOP/ BOI/ Artificial Juridical Person:
Every individual/HUF/AOP/BOI/artificial juridical person has to file income tax return if his total income exceeds the basic exemption limit i.e. Rs. 2,50,000. Here, Total Income represents gross total income without giving effect to the provisions of section 10(38), 10A, 10B or 10BA or deduction under section 80C to 80U and includes income of any other person in respect of which he is assessable.
B) In the case of companies:
It is mandatory for every company to file the return of income irrespective of its income or loss.
C) In the case of partnership firms:
It is mandatory for every partnership firm (including Limited Liability Partnership) to file the income tax return irrespective of its income or loss.
D) In the case of charitable or religious trusts:
Charitable or religious trusts has to file the income tax return if its total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to income-tax.
E) In the case of political parties:
The CEO of every political party has to file income tax return of the Party if the total income of the party without giving effect to the provisions of section 13A exceeds the maximum amount not chargeable to income-tax.
F) In the case of certain associations :
Following entities are liable to file the return of income if their total income without giving effect to the provisions of section 10 exceeds the maximum amount not chargeable to tax:
a) Research association referred to in section 10(21).
b) News agency referred to in section 10(22B).
c) Association or institution referred to in section 10(23A).
d) Institution referred to in section 10(23B).
e) Fund/institution/trust/university/other educational institution/any hospital/medical
institution referred to in sub-clause (iii ad), (iii ae), (iv), (v), (vi) or (via) of section
f) Mutual Fund referred to in clause (23D) of section 10.
g) Securitisation trust referred to in clause (23DA) of section 10.
h) Venture capital company or venture capital fund referred to in clause (23FB) of
i) Trade union/association referred to in sub-clause (a) or (b) of section 10(24).
j) Body/authority/Board/Trust/Commission referred to in section 10(46).
k) Infrastructure debt fund referred to in section 10(47).
G) In the case of certain university, college or other institution:
Every university, college or other institution referred to in clause (ii) and clause (iii) of section 35(1), which is not required to furnish income tax return or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.
H) In the case of persons holding assets located outside India:
A person, being a resident in India (other than not ordinarily resident), who holds any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India at any time during the previous year. Such Person who holds that assets as beneficial owner or otherwise Or is beneficiary of that asset (including any financial interest in any entity) located outside India, shall furnish return of income on or before the due date.
Due date of filing of Income Tax Return:
Status of the Assessee
|1) Any company other than a company who is required to furnish a audit report under section 92E (i.e. other than covered in 2 below)||September 30 of the assessment year|
|2) Person (may be corporate/non corporate) who is required to furnish an audit report under section 92E||November 30 of the assessment year|
|3) Any person (other than a company) whose accounts are to be audited under the Income-tax Law or under any other law||September 30 of the assessment year|
|4) A working partner of a firm whose accounts are required to be audited under this Act or under any other law.||September 30 of the assessment year|
|5) Any other assessee||July 31 of the assessment year|
Section 92E : Every person who has entered into an international transaction or specified domestic transaction during a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed.
Note on Income tax Audit (reference Section 44AB):
Every person carrying on business and if his total sales or turnover or gross receipts exceeds one crore rupees in any previous year; or Every person carrying on profession and his gross receipts in profession exceed 50 lacs rupees in any previous year; or Every person carrying on the business and the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44AD or section 44BB or section 44BBB, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business in any previous year, or his income exceeds basic exemption limit.
Such person shall obtain an audit report from a Chartered accountant and furnish such report on or before the specified date in the prescribed form (3CA or 3CD) duly signed and verified in the prescribed manner by such Chartered accountant.
Note: This section is not applicable to a person who declares profit and gains u/s 44AD and his turnover does not exceed two crore rupees in such previous year.
Penalties And interest If fails to furnish income tax return before due date :
Interest u/s 234A: Under section 234A, interest @1% of tax liability, per month or part of month is levied for delay in filing the return of income. If tax liability is nil then no interest u/s 234A will be levied.
Late fees u/s 234F : Under section 234F, Individual would have to pay a fee of up to Rs 10,000 if income tax return is filed after due date specified in section 139(1) of the act.
A fee of Rs 5,000 is levied if income tax return is filed after due date but before the 31st December of the relevant assessment year.
A fee of Rs 10,000 is levied if income tax return is filed after 31st December but before end of relevant assessment year.
Note: The maximum penalty will be Rs 1000 if taxpayer having total income less than Rs 5,00,000
Prosecution u/s 276CC :
if assessee willful fails to furnish a return of income then prosecution may be initiated against assessee.
If tax liability is more than Rs. 25 lakhs –6 months to 7 years imprisonment + Fine
In other Cases – 3 months to 2 years imprisonment + Fine.
Note : Other penalities and interest may be levied like fails to furnish audit report u/s 44Ab or 92C, delay in payment of advance tax, etc., depend on the status of assessee.
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