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Income Tax Return Filing | Frequently asked questions

Income Tax Return Filing | Frequently asked questions. In previous article we have given Income Under Head Salary Notes and What is Taxable Income. Today we are providing frequently asked questions on income tax return filing. Read below !!

Income Tax Return Filing

FAQ on Income Tax Return Filing

1. What Is Income Tax?

Income tax is the taxes paid on the total income earned during the relevant financial year at the rates prescribed.

2. What is return of income?

It is a prescribed form through which particulars of income earned during a financial year and taxes paid thereon is communicated to the Department.

3. From where I can get these form?

The return form can be downloaded from the site http://www.incometaxindia.gov.in or http://incometaxindiaefiling.gov.in

4. Which form is applicable for whom?

The table below gives a brief overview of all forms and its applicability:

Return FormBrief Description
ITR – 1 (Also known as SAHAJ)It 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).

·         Exempt income without ceiling limit (other than agricultural income exceeding Rs. 5000)

ITR – 2It is applicable to an individual or a Hindu Undivided Family having income from any source other than “Profits and gains of business or profession”
ITR – 2AIt is applicable to an individual or a Hindu Undivided Family having income from Salary, more than one House Property but does not have Capital Gain or PGBP.
ITR – 3It is applicable to an individual or a Hindu Undivided Family who is a partner in a firm and income chargeable to income-tax in his/its hands under the head “Profits or gains of business or profession” does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.
ITR – 4SAlso known as SUGAM is applicable to individuals and HUFs who have opted for the presumptive taxation scheme of section 44AD/ 44AE.
ITR – 4It is applicable to an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.
ITR – 5It is applicable to a person being a firm, LLP, AOP, BOI, artificial juridical person, co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or139(4C) or 139(4D) shall not use this form (i.e., trusts, political party, institutions, colleges, etc.)
ITR – 6It is applicable to a company, other than a company claiming exemption under section 11 (charitable/religious trust can claim exemption under section 11).
ITR – 7It is applicable to a person including companies who are required to furnish return under section 139(4A) or139(4B) or 139(4C) or 139(4D) (i.e., trusts, political party, institutions, colleges, etc.).
ITR – VIt is the acknowledgement of filing of return of income

5. Who is require to file ITR 2A?

  • Individual/HUF
  • has income from salary
  • more than one house property
  • does not have any income from capital gains
  • does not have income from business/profession
  • does not have foreign assets/foreign income.

6. What are the key highlights of new and modified ITRs?

  • The new forms, ITR 2 and ITR 2A, shall consist of only 3 pages.
  • With regard to foreign travel details, only the passport number, if available, will be required to be furnished. This would bring relief to all individuals who travel extensively.
  • Aadhaar Number shall be provided, if available
  • Disclose all bank accounts details held by assessee during the year. However, there shall be no need to provide accounts balance.

7. How is return filed processed?

Now the processing of return filed will be through Aadhaar Number, where, you can link your Aadhaar Number with your PAN and get rid of sending ITR V to CPC, Bangalore.

From the Assessment Year 2015-16, an option is given to the taxpayer to verify their return of income via Electronic Verification Code (EVC).

8. What is EVC?

For electronic verification of return, a code (EVC) is generated. EVC will be a unique number linked to assessee’s PAN. One EVC can be used to validate one return, irrespective, of assessment year or type of return.

Note: EVC generated via Aadhaar Card will be valid only for 10 minutes and in any other case, it will be valid for 72 hours.

9. How to generate EVC?

Taxpayers can generate EVC by any of the four ways given below:

  • Through E-filing Website of Income Tax Department
  • Through Net- Banking
  • Through Aadhaar number
  • Through ATM

10. What Are The Benefits Of Filing My Income Tax Return?

Many Individuals assume that filing of return is a harrowing experience. But nowadays an individual can file a return very easily and even faster. Filing of Income tax return helps an individual in many ways. It helps an individual to manage his financial affairs effectively. The benefits of filing of income tax return are as follow:

Helps in availing any loan facility– Whenever an individual opts for a education loan or home loan or any personal loan Banks ask for 2-3 years of Income Tax Acknowledgement. This is possible only when a individual file his return timely.

For Visa and immigration Processing – The ITR acknowledgement works as a proof of financial soundness of an individual. The ITR acknowledgement of last 2-3 years is required when an individual applies for VISA.

For claiming Refund – Incase, an assesseehas paid excess of TDS, to claim such excess return, assessee have to file its return.

11. Why e-filing of return?

With e-filing income tax return, the processing speed is kicked up and secures personal information, get instant notification of Income Tax Return receipt, check the status of tax return or tax refund and get acknowledgment receipt immediately.

12. How to pay tax?

Online income tax return allows to pay taxes at any time and from anywhere through the net-banking account without being in the long queue at the Bank.

13. Who Is Liable To Pay Income Tax?

Any Individual or group of Individual or artificial bodies who have earned income during the previous years are required to pay Income tax on it. These are Individuals, Hindu Undivided Family [HUF], Association of Persons [AOP], Body of individuals [BOI], Firms, Companies, Local authority, Artificial juridical person.

14. What Is The Due Date Of Filing The Return?

  1. Assessees like Salaried Income, person having Income from House property, Interest Income, Business Income where accounts are not required to be audited
31st July
  1. For such Corporate assessees which required to furnish a report u/s 92E of the Income Tax Act, 1961
30th November
  1. For all other Corporate assessees
30th September
  1. For those Non-Corporate assessees (Like Partnership Firm, Proprietorship Firm) whose accounts are required to be audited under Income Tax Act, 1961 (Like 44AB turnover is more than 100 lacs in case of profession – section 44AB and Business where disclosed profit is less than 8% of the turnover – Section 44AD) or any other act for time being in force
30th September
  1. For working Partners of Partnership Firm cover under serial no (3) above
30th September

15. What if there is loss in any financial year?

The loss sustained shall be eligible for carry forward to subsequent years and set off against profit earned in subsequent years only if, a loss return is filed before due date.

16. What are the consequences if a return is not filed within due date?

Interest on tax due shall be paid. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F.

17. Any provision to file return after due date?

There is an option to file Belated Return. It shall be filed within a period of one year from the end of the assessment year or before completion of the assessment, whichever is earlier. It is to be noted that Belated Return can be filed but interest and penalty shall be levied.

18. What penalties are imposed if return is not filed at all if there is taxable income?

Interest and penalty is followed by prosecution if, tax not paid. 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).

19. Is there any provision to revise the return already filed?

Revision of return filed is possible if, original return is filed within due date and Department has not completed the assessment relevant to that year. Mistake shall be genuine and bona fide and shall not be any deliberate mistake.

Note: Belated Return cannot be revised. Therefore, it is preferable to file return within due date.

20. What is Advance Tax?

If the income tax liability in any financial year is more than Rs. 10000 then, advance tax shall be paid in installments during the year itself.

21. What are due dates for Advance Tax?

For assessee other than Companies

Due Date of InstallmentAmount Payable
On or before 15th SeptemberNot less than 30% of the advance tax liability
On or before 15th DecemberNot less than 60% of the advance tax liability
On or before 15th March100% of the advance tax liability

For Companies

Due Date of InstallmentAmount Payable
On or before 15th JuneNot less than 15% of the advance tax liability
On or before 15th SeptemberNot less than 45% of the advance tax liability
On or before 15th DecemberNot less than 75% of the advance tax liability
On or before 15th March100% of the advance tax liability

22. What if advance tax is not paid within due date?

If advance tax is not paid or paid less the mandate amount then, interest shall be paid @ 1 per cent simple interest per month on the defaulted amount.

23. Is filing of return is mandatory even if income is below exemption limit?

If the income is below exemption limit then it is not mandatory to file the return but you may file the return as you cannot file the return for past years once the due date lapses. In addition, ITR is valid document for bank credit, housing loan etc.

24. What are the consequences of not filing of return or non-payment of tax?

It is mandatory to file your income tax return if your income is above the maximum exemption limit. Non-filing of income tax return attracts penalty of Rs 5000 and interest u/s 234A, 234B, and 234C accordingly. Further, if the original return not filed within the due date then an individual cannot file a revise return u/s 139(5) of the IT act. In addition, losses such as business loss, capital loss and loss in owning and maintenance of racehorse cannot be carried forward as per section 80 of the IT act.

25. Is filing of return is mandatory even if employer already deducted TDS from salary?

Mere deduction of TDS does not give you exemption from filing of IT return. Even if your employer has deducted TDS from your income, you must file your return. To claim the TDS amount,filing of IT return is mandatory.

26. What if tax deducted i.e., TDS is more than the actual tax liability?

Refund can be claimed only by filing the income tax return timely. The amount of refund will be deposited in the Bank Account provided by you while filing your return of income. The refund amount will be processed by IT department once the return is processed and 143(1) Intimation is received by you.

27. Is Digital Signature mandatory for filing return?

The e-filing portal has 2 options of filing the return with DSC and without DSC. If you opt for filing return without DSC then you must also physically submit the printed copy of ITRV Acknowledgment by speed Post or Normal Post to CPC Bangalore. But for certain entities/individuals, e-filing of return is mandatory with DSC:

  • Companies need to e-file their returns using digital signatures
  • Individuals/firms whose accounts are to be audited u/s 44 AB of the Income Tax Act 1961 e-file their returns using digital signature.

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