Introduction

It is mandatory for every taxpayer to communicate the details of his income to the Income tax Department. These details are to be furnished in the prescribed form known as return of income. In this part, you can gain knowledge about the various provisions relating to return of income.

 

 

Person required to file the return of income

The provisions relating to filing of return of income depend upon the status of the taxpayer. The position in this regard is given below:

In the case of companies:
Every person, being a company, has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every company to file the return of income irrespective of its income or loss.

In the case of partnership firms:
Every person, being a partnership firm (including Limited Liability Partnership), has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every partnership firm to file the return of income irrespective of
its income or loss.

In the case of an Individual/HUF/AOP/BOI/Artificial Juridical Person:
Every individual/HUF/AOP/BOI/artificial juridical person has to file the return of income if his total income (including income of any other person in respect of which he is assessable) without giving effect to the provisions of section 10(38), 10A, 10B, 10BA 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB or Chapter VIA (i.e., deduction under section 80C to 80U), exceeds the maximum amount which is not chargeable to tax i.e. exceeds the exemption limit.

In the case of charitable or religious trusts:
Every person in receipt of income derived from property held under charitable or religious trusts/legal obligations or in receipt of income being voluntary contributions referred to in section 2(24)(iia), has to file the return of income if its total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to income-tax.

In the case of political parties:
The Chief Executive Officer of every political party has to file the return of income 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.

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:

1. Research association referred to in section 10(21)
2. News agency referred to in section 10(22B)
3. Association or institution referred to in section 10(23A)
4. Person referred to in clause (23AAA) of section 10.
5. Institution referred to in section 10(23B)
6. Fund/institution/trust/university/other educational institution/any hospital/medical institution referred to in sub-clause (iiiac), (iiiab),  (iiiad), (iiiae), (iv), (v), (vi) or (via) of section 10(23C)
7. Mutual Fund referred to in clause (23D) of section 10
8. Securitisation trust referred to in clause (23DA) of section 10
9. Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10.
10. Core Settlement Guarantee Fund referred to in clause (23EE) of section 10
11. Venture capital company or venture capital fund referred to in clause (23FB) of section 10;
12. Trade union/association referred to in sub-clause (a) or (b) of section 10(24)
13. Board or Authority referred to in clause (29A) of section 10.
14. Body/authority/Board/Trust/Commission referred to in section 10(46)
15. Infrastructure debt fund referred to in section 10(47)

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 return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.

In the case of Business Trust
Every business trust, which is not required to furnish return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.

In case of investment fund referred to in section 115UB
Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions, shall furnish the return of income in respect of its income or loss every year irrespective of income (or) loss

In the case of persons holding assets located outside India:
A person, being a resident in India (other than not ordinarily resident), who is not required to furnish a return under any of the above `and who at any time during the previous year :

a) holds, as a beneficial owner (*) or otherwise, any asset (including any financial interest in any entity) located outside India or has signing authority in any account located outside India; or

b) is a beneficiary (*) of any asset (including any financial interest in any entity) located outside India,

shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed.

However, above discussed provision will not apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in (a) above.

(*) “Beneficial owner” in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person.
(*) “Beneficiary” in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary.

Mandatory filing of return in certain cases
With effect from Assessment Year 2020-21, it is mandatory for every person (other than a company or a firm), who is not required to furnish return of income under any other provision of section 139(1), to file return of income if during the previous year he:

1. Has deposited an amount (or aggregate of amount) in excess of Rs. 1 crore in one or more current account maintained with a bank or a co-operative bank.
2. Has incurred aggregate expenditure in excess of Rs. 2 lakh for himself or any other person for travel to a foreign country.
3. Has incurred aggregate expenditure in excess of Rs. 1 lakh towards payment of electricity bill.
4. Fulfils such other conditions as may be prescribed.

The CBDT vide notification No. 37/2022, dated 21-04-2022, has notified additional conditions under the seventh proviso to section 139(1) whereby return filing is made mandatory. These additional conditions are as follows:

1) If total sales, turnover or gross receipt of the business exceeds Rs. 60 lakh during the previous year; or
2) If total gross receipt of profession exceeds Rs. 10 lakh during the previous year; or
3) If the total of tax deducted and collected in case of a person during the previous year is Rs. 25,000 or more. The threshold limit shall be Rs. 50,000 in case of a resident individual of the age of 60 years or more; or
4) If the aggregate deposit in one or more savings bank accounts of the person is Rs. 50 lakhs or more during the previous year.

 

Due date of filing of return of income U/s 139(1)

Sl No	Status of the taxpayer	Due date
1	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)	October 31 of the assessment year
2	Any person (may be corporate/non-corporate) who is required to furnish a report in Form No. 3CEB 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	October 31 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.	October 31 of the assessment year
5	Any other assesse	July 31 of the assessment year

 

Illustration
Miss Saroj is a salaried employee. Her taxable salary income for the year 2023-24 is Rs. 8,40,000 (she does not have any other income). What will be the due date of filing the return of income for the financial year 2023-24?
**
In this case, Miss Saroj will be covered in Sr. No. 5 of the table discussed earlier and hence the due date for filing the return of income of the year 2023-24 will be 31st July, 2024.

Illustration
Mr. Rupen is a doctor. Gross receipts for the year 2023-24 came to Rs. 18,40,000. He opts for the presumptive taxation scheme of section 44ADA. What will be the due date for filing of return of income by Mr. Rupen for the financial year 2023-24?
**
The gross receipts for the year are less than Rs. 50,00,000 and Mr. Rupen has opted for the presumptive taxation scheme of section 44ADA. Hence Mr. Rupen will not be liable to get his accounts audited i.e. he is not covered by audit. He will be covered in Sr. No. 5 of the table discussed earlier and, hence, the due date for filing the return of income of the year 2023-24 will be 31st July, 2024.

Illustration
Mr. Rahul is running a garments factory. Turnover of his business for the year 2023-24 amounted to Rs. 1,84,00,000. He opts for the presumptive taxation scheme of section 44AD. What will be the due date for filing of return of income by Mr. Rahul for the financial year 2023-24?

The turnover for the year is less than Rs. 2,00,00,000 and hence Mr. Rahul will not be liable to get his accounts audited i.e. he is not covered by audit as he opts for the presumptive taxation scheme of section 44AD. Mr. Rahul will be covered in Sr. No. 5 of the table discussed earlier and, hence, the due date of filing the return of income of the year 2023-24 will be 31st July, 2024.

Illustration
Mr. Kaushal is a partner in Essem Trading Company. The turnover of the firm for the financial year 2023-24 amounted to Rs. 2,84,00,000. Apart from remuneration, interest and share of profit from the firm, Mr. Kaushal is not having any other source of income. What will be the due date for filing the return of income by the partnership firm and by Mr. Kaushal for the financial year 2023-24?
**
The turnover of the firm exceeds Rs. 2,00,00,000 and, hence, the firm will not be eligible for presumptive taxation scheme under section 44AD. Further, the firm shall be liable to get its accounts audited under section 44AB. Thus, the firm as well as Mr. Kaushal will be covered in Sr. No. 4 of the table discussed earlier and, hence, the due date for filing the return of income of the year 2023-24 (in case of the firm as well as Mr. Kaushal) will be 31 st October, 2024.

Illustration
Essem Minerals Pvt. Ltd. is a company engaged in trading of minerals. What will be the due date for filing the return of income for the financial year 2023-24?
**
In this case Essem Ltd. will be covered in Sr. No. 1 of the table discussed earlier and, hence, the due date for filing the return of income of the year 2023-24 will be 31st October, 2024.

 

 

Belated return

If the person fails to file the return of income within the time-limit prescribed in this regard,then as per section 139(4) he can file a belated return. A belated return can be filed at anytime 3 months before the end of the relevant assessment year or before completion of assessment, whichever is earlier.

Illustration
Mr. Raja is a trader of agricultural products. Turnover of his business for the previous year 2023-24 amounted to Rs. 84,00,000. He has not opted for the presumptive taxation scheme of section 44AD i.e. not declaring income at 8% of sales. He declared income at less than 8% of sales. What will be the ‘due date’ for filing his return of income for the financial year 2023- 24? If he fails to file the return of income by the due date then by what date he can file a belated return?
**
In this case, as Mr. Raja had not opted for presumptive taxation scheme of section 44AD, and declared income at less than 8% of sales, he will be required to get his accounts audited under section 44AB and, hence, he is covered in Sr. No. 3 of the table discussed earlier. Hence, the due date for filing the return of income of the year 2023-24 will be 31stOctober, 2024.

If he cannot file the return of income by the due date, i.e., by 31st October, 2024, then he can file a belated return 3 months before end of the relevant assessment year or before completion of assessment, whichever is earlier.

In other words, he can file a belated return upto 31-12-2024. If the assessment is completed before 31-12-2024, then he can file a belated return at any time before the completion of assessment.

 

Revision of return

Sometimes the taxpayer may omit to include certain information in the return or may commit any mistake at the time of filing the return of income. In such case any unintentional mistake or error or omission in the return of income filed by the taxpayer can be corrected by filing a revised return.

A return can be revised at any time 3 months before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. It should be noted that only a return filed under section 139(1) or belated return filed under section 139(4) can be revised.

A return of income filed pursuant to notice under section 142(1) of Act cannot be revised under section 139(5).

 

Defective return

Section 139(9) provides the list of situations in which the return of income filed by the taxpayer can be treated as defective return. If the Assessing Officer finds the return of income to be defective under section 139(9), then he may intimate such defect to the taxpayer and may give an opportunity to him to rectify such defect.

The taxpayer shall rectify such defect in the return of income within a period of 15 days of such intimation or within such further period as the Assessing Officer may allow.

A return of income shall be regarded as defective, unless all the following conditions are fulfilled:

• The annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in.
• The return is accompanied by a statement showing the computation of the tax payable on the basis of the return.
• The return is accompanied by the report of the audit referred to in section 44AB
• The return is accompanied by proof of the tax, if any
• Where regular books of account are maintained by the taxpayer, the return is accompanied by copies of :

1. Manufacturing account, trading account, profit and loss account or, as the case may be, income and expenditure account or any other similar account and balance sheet.
2. In the case of a proprietary business or profession, the personal account of the proprietor;
3. in the case of a firm, association of persons or body of individuals, personal accounts of the partners or members and
4. in the case of a partner or member of a firm, association of persons or body of individuals, also his personal account in the firm, association of persons or body of individuals.

• Where the accounts of the taxpayer have been audited, the return is accompanied by copies of the audited profit and loss account and balance sheet and the auditor’s report
• Where regular books of account are not maintained by the taxpayer, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year.

 

 

Updated Return

The Finance Act 2022, has inserted subsection (8A) in section 139 to enable the filing of an updated return. The section provides that an updated return can be filed by any person irrespective of the fact whether such person has already filed the original, belated or revised
return for the relevant assessment year or not.

An updated return can be filed at any time within 24 months from the end of the relevant assessment year.

 

 

MCQ On Return of Income

Q1. Every person, being a company, has to file its return of income only if it has any positive income or if it wants to carry forward the loss (if any).
(a) True (b) False
Correct answer : (b)
Justification of correct answer : Every person, being a company, has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every company to file the return of income irrespective of its income or loss.
Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q2. Every person, being a partnership firm (including Limited Liability Partnership), has to file its return of income compulsorily, irrespective of its income being profit or loss.
(a) True (b) False
Correct answer : (a)
Justification of correct answer : Every person, being a partnership firm (including Limited Liability Partnership), has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every firm to file the return of income irrespective of its income or loss.
Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q3. Every individual/HUF/AOP/BOI/artificial juridical person has to file the return of income if his total income (including income of any other person in respect of which he is assessable) without giving effect to the provisions of section 10(38), 10A, 10B 10BA, 54, 54B, 54D,54EC, 54F, 54G, 54GA or 54GB or Chapter VIA (i.e., deduction under section 80C to 80U), exceeds
(a) Rs. 2,00,000 (b) Rs. 2,50,000
(c)Rs. 5,00,000 (d) The maximum amount not chargeable to tax
Correct answer : (d)
Justification of correct answer : Every individual/HUF/AOP/BOI/artificial juridical person has to file the return of income if his total income (including income of any other person in respect of which he is assessable) without giving effect to the provisions of section 10(38), 10A, 10B, 10BA, 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB or Chapter VIA (i.e., deduction under section 80C to 80U), exceeds the maximum amount not chargeable to tax i.e. exceeds the exemption limit.
Thus, option (d) is the correct option.

Q4. Every person in receipt of income derived from property held under charitable or religioustrusts/legal obligations or in receipt of income being voluntary contributions referred to in section 2(24)(iia), has to file the return of income if its total income after giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to income-tax.
(a) True (b) False
Correct answer : (b)
Justification of correct answer : Every person in receipt of income derived from property held under charitable or religious trusts/legal obligations or in receipt of income being voluntary contributions referred to in section 2(24)(iia), has to file the return of income if its total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to incometax.
Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q5. The Chief Executive Officer of every political party has to file the return of income of the party if the total income of the party without giving effect to the provisions of section exceeds the maximum amount not chargeable to income-tax.
(a) 11 (b) 12
(c) 13 (d) 13A
Correct answer : (d)
Justification of correct answer : The Chief Executive Officer of every political party has to file the return of income 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.
Thus, option (d) is the correct option.

Q6. What is the due date of filing the return of income in case of a company other than a company who is required to furnish a report in Form No. 3CEB under section 92E?
(a) October 31 of the assessment year (b) November 30 of the assessment the year
(c) July 31 of the assessment year (d) June 30 of relevant assessment the year
Correct answer : (a)
Justification of correct answer : The due date of filing the return of income in case of a company other than a company who is required to furnish a report in Form No. 3CEB under section 92E is October 31 of the assessment year.
Thus, option (a) is the correct option.

Q7. What is the due date of filing the return of income in case of a person who is required to furnish a report in Form No. 3CEB under section 92E?
(a) October 31 of the assessment year (b) November 30 of the assessment the year
(c) July 31 of the assessment year (d) June 30 of relevant assessment the year
Correct answer : (b)
Justification of correct answer : The due date of filing the return of income in case of a person who is required to furnish a report in Form No. 3CEB under section 92E is November 30 of the assessment year

Thus, option (b) is the correct option.

Q8. What is the due date of filing the return of income in case of a person other than a company whose accounts are not required to be audited under the Income-tax Law or under any other law?
(a) October 31 of the assessment year (b) November 30 of the assessment the year
(c) July 31 of the assessment year (d) June 30 of relevant assessment the year
Correct answer : (c)
Justification of correct answer : The due date of filing the return of income in case of a person other than a company whose accounts are not required to be audited under the Income-tax Law or under any other law is July 31 of the assessment year.
Thus, option (c) is the correct option.

Q9. What is the due date of filing the return of income in case of a person whose accounts are to be audited under the Income-tax Law or under any other law (other than a person who is  required to furnish a report in Form No. 3CEB under section 92E)?
(a) October 31 of the assessment year (b) November 30 of the assessment the year
(c) July 31 of the assessment year (d) June 30 of relevant assessment the year
Correct answer : (a)
Justification of correct answer : The due date of filing the return of income in case of a person whose accounts are to be audited under the Income-tax Law or under any other law (other than a person who is required to furnish a report in Form No. 3CEB under section 92E) is October 31 of the assessment year.
Thus, option (a) is the correct option.

Q10. If a person fails to file the return of income within the time-limit prescribed in this regard, then as per section 139(4) he can file a belated return. A belated return can be filed before the end of the relevant assessment year or before completion of assessment, whichever is earlier.
(a) True (b) False
Correct answer : (b)
Justification of correct answer : If the person fails to file the return of income within the time-limit prescribed in this regard, then as per section 139(4) he can file a belated return. A belated return can be filed at any time 3 months before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q11. Mr. A is an employee earning salary of Rs. 30,000 per month. He filed return of income and his tax liability was nil after claiming rebate under section 87A. Later he found that he didn’t disclose interest income of Rs. 60,000 on which tax was deducted by bank. The time limit to file belated return has expired. Can assessee file updated return and claim refund of tax deducted on interest?
(a) Yes (b) No
Correct answer : (b)
Justification of correct answer : An updated return can be filed at any time within 24 months from the end of the relevant  ssessment year. However, an updated return cannot be filed if such return results in refund.
Thus, Mr. A shall not be eligible to file updated return of income.