filing of returns under income tax act 1961 · pdf filefiling of returns under income tax act...

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FILING OF RETURNSUNDER

INCOME TAX ACT 1961Presented

atBCAS Lecture Meeting 21st June 2006

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Kanu Doshi Associates (c)

COVERAGE

• WHO IS REQUIRED TO FILE RETURN OF INCOME Us 139

• WHEN• FORMS• SCHEMES UNDER THE ACT• PRE- REQUISITES• CONSEQUENCES FOR FAILURE

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WHO IS REQUIRED TO FILE RETURN OF INCOME

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INCOME

EXPENSE

STATUSSPECIFICALLY REQUIRED BY ITA

AMENDMENTSFINANCE ACT 2006

CRITERIA FOR FILING CRITERIA FOR FILING

RETURNS UNDER ITARETURNS UNDER ITA

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139(1) – INCOME CRITERIA

• 139(1)(b)• ANY PERSON,• OTHER THAN COMPANY OR• FIRM• INCOME EXCEEDS• THE MAXIMUM AMOUNT• NOT CHARGEABLE TO TAX

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139(1) – EXP CRITERIA

• 1ST PROVISO TO 139(1)• APPLICABLE TO EVERY PERSON

OTHER THAN CO OR FIRM• ELECTRICITY EXPS > 50000/-• FOREIGN TRIP• MOTOR VEHICLE

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139(1) – EXP CRITERIA

• RESIDENTIAL PROPERTY EXCEEDING SPECIFIED FLOOR AREA

• CREDIT CARD HOLDER• MEMBER OF CLUB• THESE WERE ALSO CALLED THE

ECONOMIC CRITERIA• FINANCE ACT 2006

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139(1) – STATUS CRITERIA

(4B)

(4A)

(1)

SUB SEC

INCOME BEFORE DEDUCTION Us 13 > MAX AMT NOT CHARGEABLE TO TAX

POLITICAL PARTY

INCOME BEFORE DEDUCTION Us 11 &12 > MAX AMT NOT CHARGEABLE TO TAX

TRUST/ CHARITABLE ORG

> Rs 1,00,000/-INDIVIDUAL

TOTAL INCOME EXCEEDING

STATUS

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139(1) – STATUS CRITERIA

TRADE UNION 10(24)(a), (b)

FUND & INSTITUTION 10(23C) (iv), (v), (vi), (via)

INSTITUTION 10(23B)

NEWS AGENCY 10(22B)

INCOME BEFORE DEDUCTION Us 10 >MAX AMT NOT CHARGEABLE TO TAX

SCIENTIFIC RESEARCH ASSN 10(21)

TOTALINCOME

EXCEEDING

STATUS

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COMPULSORY

• COMPANIES• AMENDMENTS TO FINANCE ACT

2006• FIRMS• 10B UNITS (NEWLY ESTD 100% EOUs)• ASSESSEES CLAIMING DEDUCTIONS

Us 80-IA, 80-AB, 80-IB, 80-IC [80AC]

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WHEN TO FILE RETURNS

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DUE DATES

• EXPL 2 TO SUB SECTION (1) TO SECTION 139

• BROADLY SPLIT INTO 3 CATEGORIES– COMPANIES– PERSONS OTHER THAN

COMPANIES SUBJECT TO AUDIT– RESIDUAL

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31ST OCTOBER

• COMPANIES• PERSON OTHER THAN COs• SUBJECT TO AUDIT UNDER ITA OR

ANY OTHER LAW IN FORCE• PARTNER OF A FIRM, SUBJECT TO

44AB• ECONOMIC CRITERIA RETURNS

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31ST JULY

• IN CASE OF ALL OTHER ASSESSEES

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FORMS

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BASIS

STATUS SOURCES OFINCOME

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FORM 1

• COMPANIES• OTHER THAN THOSE CLAIMING

EXEMPTION Us 11

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FORM 2

• OTHER ASSESSEES• OTHER THAN COMPANIES AND

THOSE CLAIMING EXEMPTION Us 11

• WHOSE TOTAL INCOME INCLUDES• INCOME / LOSSES FROM BUSINESS

/ PROFESSION

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FORM 2C

• THOSE ASSESSEES FILING RETURNS UNDER 1ST PROVISO TO SECTION 139(1)

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FORM 2D

• RESIDENT INDV/ HUF• ALMOST ALL OTHER ASSESSEES• OTHER THAN COMPANIES AND• THOSE CLAIMING EXEMPTION US 11• TOTAL INCOME COULD BE UNDER

THE HEAD SALARIES, CAPITAL GAINS, P / G FROM B / P, OTHER SOURCES

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FORM 2E

• RESIDENT INDV/ HUFs• NOT HAVING

–INCOME / LOSS FROM BUSINESS

–CAPITAL GAINS–AGRICULTURAL INCOME

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FORM 2F

• INCOME FROM SALARY• DOES NOT HAVE ANY INCOME / LOSS

FROM BUSINESS / CAPITAL GAINS• NOT OWNING MORE THAN ONE

HOUSE PROPERTY• NOT CLAIMING RELIEF Us 89(1) FOR

ARREARS IN SALARY

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FORM 2F

• NO ANNEXURES REQUIRED TO BE ATTACHED ALONG WITH THIS RETURN

• INCLUDES DETAILS OF CASH FLOW

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FORM 3

• ASSESSEES OTHER THAN COS• THOSE ASSESSEES CLAIMING

EXEMPTION Us 11• NOT HAVING INCOME / LOSS

FROM BUSINESS

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FORM 3A

• ASSESSEE CLAIMING EXEMTION Us 11

• INCLUDING COMPANIES

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LOSS RETURNSBELATED RETURNSREVISED RETURNS

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LOSS RETURN- 139(3)

• TIME LIMIT AS PROVIDED Us 139(1)• APPLIES TO THOSE ASSESSEES• WANTING TO CARRY FORWARD

– UNABSORBED BUSINESS LOSS– LOSS FROM SPECULATION BUSINESS– UNABS LTCL (OTHER THAN LISTED

SHARES & UNITS) / STCL– LOSSES IN HORSE RACING BUSINESS

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BELATED RETURN- 139(4)

• IF RETURN NOT FURNISHED WITHIN TIME LIMIT PROVIDED Us 139(1) / 142(1)

• WITHIN 1 YEAR FROM THE END OF THE RELEVANT AY, OR

• BEFORE COMPLETION OF ASSESSMENT WHICH EVER EARLIER

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REVISED RETURN 139(5)

• FURNISHED RETURN Us 139(1)/ 142(1)

• DISCOVERS OMISSION/ WRONG STATEMENT

• FURNISH REVISED RETURN• WITHIN 1 YEAR FROM END OF

RELEVANT AY, OR

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REVISED RETURN 139(5)

• BEFORE ASSESSMENT IS COMPLETED

• WHICH EVER EARLIER• CAUTION• A BELATED RETURN CANNOT BE

REVISED

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VERIFICATION

• SECTION 140• SPECIFIES WHO CAN SIGN THE

RETURN• DIFFERENT TYPES OF ASSESSEES• AUTHORISED REPRESENTATIVES

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DOCUMENTS CHECKLIST• RETURN TO BE ACCOMPANIED BY

– COMPUTATION OF INCOME AND THE TAX PAYABLE THEREON WITH DETAILED ANNEXURES

– AUDIT REPORT– PROOF OF TAX PAID (ADV TAX, S/A

TAX)– TDS CERTIFICATES COPIES OF

TRADING, P & L A/C, I & E A/C, BALANCE SHEET

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DOCUMENTS CHECKLIST

• DEPENDING ON VARIOUS RELIEFS BEING CLAIMED UNDER THE ACT

• PROOF OF ELIGIBILITY FOR CLAIMS• VARIOUS CERTIFICATES• PROOF OF TAX SAVINGS

INVESTMENTS• FORM 30– REFUND

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DOCUMENTS CHECKLIST

• WHERE THE RETURN OF INCOME IS BEING FURNISHED FOR THE FIRST TIME– COPY OF MOA, AOA, CERTIFICATE OF

INCORP– COPY OF PARTNERSHIP DEED– TRUST DEED

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PRE- REQUISITES

• PAN NO Us 139A• AUTHORISED REPRESENTATIVE• COPY OF THE POWER OF ATTORNEY• DETAILS OF BANK A/C, CREDIT CARD• OTHERS

– IF PAN NOT ALLOTTED, COPY OF 49A– COPY / DETAILS OF LAST YEAR’S

RETURN

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DEFECTIVE RETURN

• 139(9), RETURN WILL BE DEFECTIVE IF: – RETURNS NOT FILLED PROPERLY– NOT ACCOMPANIED BY DOCUMENTS

• BALANCE SHEET, CAP A/C (SEC 44AA)• TDS CERTIFICATES• OTHERS– AUDIT REPORT US 44AB, ETC

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DEFECTIVE RETURN

• WHERE AO CONSIDERS THE RETURN TO BE DEFECTIVE

• DESCRETION TO GIVE NOTICE FOR RECTIFYING THE DEFECT

• WITHIN PERIOD OF 15 DAYS FROM DATE OF INTIMATION

• OR SUCH FURTHER EXTENDED TIME AS THE AO MAY ALLOW

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CONSEQUENCES OF FAILURE TO RECTIFY DEFECTS

• IF THE DEFECT IS NOT RECTIFIED WITHIN TIME LIMIT GIVEN

• AO CAN TREAT THE RETURN AS INVALID

• OTHER PROVISIONS OF THE ITA WOULD APPLY

• AS IF ASSESSEE HAD FAILED TO FURNISH RETURN

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CONSEQUENCES OF FAILURE TO RECTIFY DEFECTS

• WHERE DEFECT IS RECITIFIED AFTER THE TIME LIMIT

• AO IS EMPOWERED TO CONDONE THE DELAY

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FILING OF RETURNS UNDER VARIOUS SCHEMES OF ITA

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SCHEME FOR BULK FILING OF RETURN

• 139(1A)• NOTIFICATION NO 13/2004 [F. NO

140/03/2004/ TPL] DATED 12-1-2004• OPTIONAL SCHEME• PROVIDES AN ADDITIONAL MODE OF

FILING RETURNS• ONLY PERSONS DERIVING INCOME

FROM SALARIES

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• ELIGIBLE EMPLOYEE– INDIVIDUAL– RESIDENT IN INDIA– MUST HAVE INCOME

CHARGEABLE UNDER THE HEAD SALARIES

– SALARY (BEFORE DEDUCTION US 16) >RS150,000

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• DISQUALIFICATIONS• SHOULD NOT HAVE THE FOLLOWING

– BUSINESS INCOME – CAP GAINS – ANY INCOME FROM PREVIOUS

EMPLOYER ON WHICH TAX HAS BEEN DEDUCTED AT SOURCE

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ELECTRONIC FILING

• 139(1B)• NOTIFICATION 1073(E), 30-9-2004• AY 2004-05 ONWARDS• INTRODUCED IN METRO CITIES• FURNISH RETURN OF INCOME TO

E-INTERMEDIARY• E INTERMIDIARY WILL ISSUE PROV

RECEIPT

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ELECTRONIC FILING

• E-INTERMEDIARY WILL DIGITIZE THE DATA OF SUCH A RETURN

• TRANSMIT THE SAME TO TIN NETWORK ON / BEFORE DUE DATE

• AND WITHIN 15 DAYS, SUBMIT THE RETURN TO AO

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FURNISHING OF RETURN ON INTERNET SCHEME 2004

• NOTIFICATION 1074(E), 30-9-2004• OPTIONAL• AN ELIGIBLE PERSON CAN FILE HIS

RETURNS• FOR AY 2004-05 ONWARDS• WITHIN TIME LIMIT PROVIDED BY

139(1)

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TAX PREPARERS SCHEME

• ANNOUNCED IN THE FINANCE ACT 2006

• TOUTED AS A SCHEME WHICH WILL GENERATE EMPLOYMENT

• CA’S, TAX PRACTITIONERS, LAWYERS EXCLUDED

• REMUNERATION• OPTIONAL SCHEME

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CONSEQUENCES

• INTEREST Us 234A• PENALTY Us 271F

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THANK YOU

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