Income Tax Return – Everything You Need To Know

Persons Compulsorily Required To File Income Tax Return :

The following persons are mandatorily required to file income tax return

  • A Company.
  • Firm (In Income Tax Act Firm means a Partnership Firm, Sole proprietor firms are considered as an individual)
  • Any other person whose total income exceeds the maximum amount which is not chargeable to income tax.
  • A person is required to file ITR if the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax.

The maximum amount which is not chargeable to tax means the amount up to which no tax is payable as per income tax slabs.

Any person can file income tax return voluntarily. 

income tax return rules for 2017-18

Interest And Penalty On Late filing

Penalty under Section 234F
A penalty under section 234F is levied from the financial year 2017-18 of an amount up to Rs. 10,000 if the return is not filed before the due date. This is a mandatory penalty and can not be waived off by the income tax officer.

Interest u/s 234A
If you have some outstanding taxes payable to the Income Tax Department, then the interest (simple interest) is chargeable @1% per month on the tax outstanding (net of advance tax & TDS, if any) from the due date till the actual return filling dates. 

Income Tax Return Forms for A.y 2018-19

ITR Form Who can file Conditions Income Tax Department’s Guide
ITR-1 (Sahaj) Individual This Return Form is to be used by an individual whose total income includes:-
(a) Income from Salary/ Pension
(b) Income from One House Property (excluding cases where loss is brought forward from previous years)
(c) Income from Other Sources (Excluding Winning from Lottery and Income from Race Horses and persons who has loss under this head)
NOTE –  Further, in a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used only if the income being clubbed falls into the above income categories.
This Return Form should not be used by an individual whose total income for the year includes:-
(a) Income from more than one house property
(b) Income from Winnings from lottery or income from Racehorses
(c) has total income, exceeding fifty lakh rupees;
(d) Agricultural income in excess of 5,000
(e) has income taxable under section 115BBDA, 115BBE
(f) Loss under the head ‘Income from other sources’
(g) Person claiming relief under section 90 or 90A and/or 91
(h) Any resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India
(i) Any resident having income from any source outside India
View
ITR-2 Individual & HUF An Individual or HUF who is not eligible to File form ITR-1 and doesn’t have any income from business or profession. View
ITR-3 Individual & HUF Individual or HUF who is not eligible to File ITR in ITR-1, ITR-2 and ITR-4 and having income from business or income from sole proprietorship business or profession.

If a person is receiving income as a partner from a partnership firm then also ITR-2 is to be filed. Income may be in form of Profit sharing, bonus, commission, salary, interest on capital.

View
ITR-4 (Sugam) Individual/HUF/Partnership firm but not LLP ITR-4 is to be used by an individual/ HUF/ Partnership Firm whose total income for the assessment year 2017-18 includes:-
(a) Business income where such income is computed in accordance with special provisions referred to in sections 44AD and 44AE of the Act for computation of business income
(b) Income from Profession where such income is computed in accordance with special provisions referred to in sections 44ADA
(c) Salary/ Pension
(d) Income from One House Property (excluding cases where loss is brought forward from previous years)
(e) Income from Other Sources (Excluding Winning from Lottery and Income from Race Horses)Note 1: The income computed shall be presumed to have been computed after giving full effect to every loss, allowance, depreciation or deduction under the Income-tax Act.
Note 2: Further, in a case where the income of another person like spouse, minor child, etc. is to be clubbed with the income of the assessee, this Return Form can be used only if the income being clubbed falls into the above income categories.ITR-4 cannot be used in following cases
(a) Income from more than one house property
(b) Income from Winnings from lottery or income from Racehorses
(c) Income under the head “Capital Gains”, e.g. Short-term capital gains or long-term capital gains from the sale of house, plot, shares etc.
(d) Income tax under section 115BBDA
(e) Income of nature referred to in section 115BBE
(f) Agricultural income in excess of ₹5,000
(g) Income from Speculative Business and other special incomes
(h) Income from an agency business or income in the nature of commission or brokerage
(i) Person claiming relief of foreign tax paid under section 90, 90A or 91
(j) Any resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India
(k) Any resident having income from any source outside India.ITR-4 is not mandatory and shall not apply at the option of the assessee, if
(i) the assessee keeps and maintains all the books of account and other documents referred to in section 44AA in respect of the business or profession.
(ii) the assessee gets his accounts audited and obtains a report of such audit as required under section 44AB in respect of the business or profession.
In the above scenarios, Regular ITR-3 or ITR-5, as the case may, should be filed and not SUGAM.
View
ITR-5 For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7 This Form can be used by a person being a firm, LLPs, AOP, BOI, an artificial juridical person referred to in section 2(31)(vii), persons referred to in section 160(1)(iii) or (iv), cooperative society, registered societies and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4F) shall not use this form. View
ITR-6 For Companies other than companies claiming exemption under section 11 This Form can be used by a company, other than a company claiming exemption under section 11 View
ITR-7 For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F) This Form can be used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F). View 

Last Date To file ITR

Particulars Due Date
1.       For such corporate assessees which are required to furnish a report under section 92E of Income Tax Act, 1961. 30th November of the assessment year.
2.       For all corporate assessees 30th September of the assessment year.
3.       For all non-corporate assessees whose accounts are required to audit under section 44AB  or under any other law for the time being in force. 30th September of the assessment year.
4.       For working partners of partnership firms whose accounts are required to be audited under this Act or under any other law for the time being in force. 30th September of the assessment year.
5.       For any other assessee. 31st  July of the assessment year.
Penalty under section 234F

New penalty for late filing of Income Tax Return under section 234F is introduced in Budget 2017.  Although this penalty is applicable only for income tax return for Financial Year 2017-18 and onwards.  If a person who is compulsorily required to file Income Tax Return (ITR) doesn’t file return on time then he is liable to a penalty as follows

AMOUNT OF PENALTY 

For a person with Total Income of more than Rs. 5,00,000

  1. If ITR is filed on or before 31st December following the last date – Rs. 5,000
  2. If ITR is filed after 31st December – Rs. 10,000

For a person with Total Income of less than Rs. 5,00,000 – Rs. 1,000

The penalty is not applicable if ITR is filed before due date but verification is done after the due date.

In addition to the penalty interest under Section 234A is also levied on late filing of Income Tax Return.

Author’s Bio: Prateek Aggarwal is a professional CA and editor of TaxAdda.com. He provides information regarding tax laws in India.  The main motive is to provide updated information in easy to understand language with the highest accuracy.

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