Under Income tax Act,1961 there are provisions for filing income tax returns. An assessee furnishes information regarding his total income and tax payable during a previous year in a prescribed form. The format for filing return is notified by CBDT.
The topics covered in this article are: 1. Mandatory filing of Return of Income under Section 139(1) 2. Reason for extension of due date under income tax? 3. Extension of due date for filing ITR 4. Extension of date of assessment 5. Extension for last date for Vivad Se Vishwas scheme 6. Income tax return forms 7. Interest for default in furnishing Return of Income 8. Penalty for default in filing Return on income 9. Details to be furnished while filing Income Tax Return 10.How to file an income tax return?
1. Mandatory filing of Return of Income under Section 139(1)
● As per section 139(1) it is compulsory for companies and firms to file ITR on or before due date in the prescribed form
● In case of person other than companies or firms, a person whose assessable income during the previous year exceeds the basic exemption limit must file ITR
Note: While an assesee file an ITR then
● Only those who file ITR can claim income tax refund
● To carry forward losses
● While availing loan as financial institutions insist on seeing income tax return
2. Reason for extension of due date under income tax?
Amid the Covid-19 pandemic, people are finding it difficult to pay their taxes on time as all works were disrupted due to lockdown. It is a very important measure taken under the Prime Minister's twenty lakh package.
3. Extension of due date for filing ITR
Originally, due date for filing income tax return was
● 30th September of the assessment year for companies
● 31st July of the assessment year for individuals
● 30th November of the assessment year for an assessee who is required to furnish report as per section 92E
On 13th May 2020 Finance Minister, Nirmala Sitharaman, announced the extension of the due date for filing of ITR for the assessment year 2020-2021 till 30th November 2020.
Due date for tax audit has also been extended from 30th September 2020 to 31st October 2020.
4. Extension of date of assessment
As per Prime Minister's twenty lakh package, the date of assessments getting barred on 30th September 2020 has been extended to 31st December 2020 and the assessments getting barred on 31st March 2021 will be extended to 30th September 2021.
5. Extension for last date for Vivad Se Vishwas scheme
Previously, Indian government had introduced the Sabka Vishwas scheme to reduce indirect tax litigations. In the budget 2020 Vivad Se Vishwas was introduced to remove direct tax litigations. According to this scheme, a taxpayer would be required to pay only the disputed tax amount and the interest and penalty will be completely waived if payment is made before the due date.
Period of the Vivad Se Vishwas scheme for making payments without additional amounts also extended till 31 December 2020
6. Income tax return forms
Usually ITR forms available by the first week of April but due to making necessary changes, it was announced that it shall be made available by 31st May 2020
ITR 1- This form is for individuals with total income upto Rs 50 lakh, having Income from Salaries, house property, other sources of income and agricultural income up to Rs. 5,000
ITR 2- This form is for individuals and HUFs not having profits and gains of business or profession.
ITR 3- This form is for individuals and HUFs having business income
ITR 4 (Sugam)- It is for individuals and HUF having income up to 50 lakhs and who compute their business income under section 44AD, 44ADA or 44AE.
7. Interest for default in furnishing Return of Income
Under section 234A of Income Tax Act,1961 interest is payable by an assessee who fails to file a return of income on or before the due date.
● Simple interest of 1% per month is payable for a month or part of the month
● This shall not be applicable for a self assessment tax paid by an assessee on or before due date of filing return.
8. Penalty for default in filing Return on income
When a person fails to furnish return of income under section 139, he shall pay fees of
● ₹5000, if return is furnished before 31st December of A.Y
● ₹10000, in other case
However, if the total income of a person does not exceed ₹5 lakhs, the fees payable shall not exceed ₹1000
9. Details to be furnished while filing Income Tax Return
Income exempt from tax
Bank statement and other income statement held by him
Details of all heads of income
Income exempt from tax
10. How to file an income tax return?
You can file income tax returns either by downloading an ITR form and filling them or making an online application. To file Income tax return through online mode,
Log on to department of Income tax http://www.incometaxindiaefiling.gov.in
2. Register by filling details such as name, PAN etc
3. Provide required documents
4. Enter the details of income, expense, deductions and tax paid
5. E-file and verify the details
It has to be noted that only ITR 1 and ITR 4 can be filled online by individual taxpayers
Frequently asked question
1.Who should file an Income Tax Return?
· Taxpayers whose total income exceeds the basic exemption limit however for firms and corporate it is compulsory to file.
· Any person is having any refund amount
· Any person is having loss to carry forward
· Thinking of availing loan
2. How can Income tax return be filed?
Income tax return can be filled in online mode by filling forms in e-filing portal or by offline mode by downloading ITR forms and submitting them.
3. Are the due dates for filing an Income tax return extended?
Due to ongoing Covid-19 pandemic, the due date for income tax return are extended from 31st July 2020 to 30th November 2020
4. Is the due date for tax audit extended?
Due date for tax audit has been extended from 30th September 2020 to 31st October 2020
Download Income tax calculator to compute your taxes