It is found that year after year Finance Act prescribe the rates for collecting TDS and rates on income for payment of taxes. Apart from that they regularly make substantial amendments which affects computation of income year after year. Not only this, they also keep on improvising forms. So this article is for the purpose so that all the relevant provisions which are now applicable to 31st July are being considered and dealt with in this article.
Every individual 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 or 10BA or 54 or 54B or 54D or 54EC or 54F or 54G or 54GA or 54GB or Chapter VI-A (i.e., deduction under section 80C to section 80U), exceeds the maximum amount which is not chargeable to tax i.e. exceeds the exemption limit.
What is ITR e filing?
Every taxpayer is required to self-assess his/ her taxable income for the financial year and file a declaration of such taxable income by way of a return to the Income Tax Department. This return is known as “Income Tax Return” (ITR). Tax Payer is required to submit the ITR online through the portal of the Income Tax Department at https://eportal.incometax.gov. in/. The online filing of ITR is known as “ITR e-filing”.
Cases in which filing of Return of Income is mandatory
An individual shall be mandatorily required to furnish a Return of Income for the previous year even in cases where his total income does not exceed the maximum amount not chargeable to income-tax. These cases are explained as under:
- If he has assets outside India:
An Individual, being a resident and ordinary resident in India, shall file his Return of Income, if he:
- 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
- is a beneficiary of any asset (including any financial interest in any entity) located outside India.
- If he deposits more than Rs. 1 crore in bank account
An Individual or HUF shall file his/their Return of Income, if he/they has/have deposited an amount or aggregate of the amounts exceeding Rs. 1 crore in one or more current accounts maintained with a banking company or a co-operative bank.
- If foreign travel expense is more than Rs. 2 lakhs.
An Individual or HUF shall file his/their Return of Income, if he/they has/have incurred more than Rs. 2 lakhs on travel to a foreign country, either for himself or for any other person.
- If electricity consumption is more than Rs. 1 lakh
An Individual or HUF shall file his/their Return of Income, if he/they has/have incurred an expenditure exceeding Rs. 1 lakh on electricity consumption.
What are the due dates of filing ITR for the A.Y. 2022-23?
The due dates for income tax return filing are different for various categories of taxpayers. The ITR form for each category of taxpayers is different. The Central Board of Direct Taxes (CBDT) has prescribed 7 forms for filing ITR. Taxpayers must e-file their income tax return using the correct form on or before the due date prescribed by the Income Tax department.
Sub-section (1) of section 139 of the Act casts responsibility on the taxpayer to furnish a return within a definite time period or up to a particular date, that is, the due date which as per this section means:
- for an assessee who is a company or a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force, it is 31st day of October of the assessment year;
- for an assessee who is required to furnish a report under section 92E of the Income Tax Act, it is 30th day of November of the assessment year; and
- for any other assessee, it is 31st day of July of the assessment year. Alternatively, sub-section (4) of section 139 of the Act facilitates filing of a belated return after the expiry of due date, if such return is
- furnished before 3 months prior to the end of the relevant assessment year or before the completion of assessment, whichever is earlier. Similarly, sub-section
(5) of section 139 of the Act provides the taxpayer an opportunity to revise the return filed under sub-section (1) or sub-section (4) in case of any omission or wrong statement, after due date, which is to be filed 3 months before the end of the assessment year or before the completion of assessment, whichever is earlier. Hence, the objective of section 139 of the Act is to give reasonable time to the taxpayer to file a correct statement of his income within the duration specified under the Act.
This provision provides an additional time of approximately 5 months to an individual assessee, 2 months to a company/auditable case and 1 month to an assessee who enters into an international transaction or specified domestic transaction respectively, in a financial year to file belated or revised return. This additional timeline for filing a revised/belated return may not be adequate when we factor in utilization of huge information and data available coupled with the “nudge approach” that motivates the taxpayer towards the desired objective of voluntary tax compliance, starting with filing of correct tax returns.
Hence, it is proposed to introduce a new provision in section 139 of the Act for filing an updated return of income by any person, whether he has filed a return previously for the relevant assessment year or not..
And therefore, a new section 139(8A) and new rule 12AC has been notified vide Gazette notification dated 29.04.2022 for updated returns.
ITR U Form is notified for updated returns u/s 139(8A). The notification states that the updated returns can befiled for A.Y. 2020-21 onwards.
According to Rule 12AC, ITR U for updated returns u/s 139(8A) can be filed alongwith ITR 1 to 7 for A.Y.2020-21 onwards.
Hence, it is proposed that the taxpayers may be given some more time under the Act to file particulars of their income for a previous year in an updated return. A payment of additional tax by persons opting to furnish their returnsin the newly provided timelines is also required. It is proposed that an amount equal to twenty- five percent or fifty percent, as the case may be, be paid as additional tax on the tax and interest due on the additional income furnished.
Due date of filing ITR for Companies with respect to AY 2022-23:
- The due date of filing ITR is generally 31st July 2022 for taxpayers (non-audit cases). However, in the case of the taxpayers where an audit is required under the Income Tax Act or under any other law for the time being in force, the due date of filing ITR is 31st October 2022.
- Where the last day for filing return of income/loss is a day on which the office is closed, the assessee can file the Return on the next day afterwards on which the office is open and, in such cases, the return will be considered to have been filed within the specified time limit — Circular No. 639, dated 13-11-1992
Due date of filing ITR for LLPs with respect to AY 2022-23:
- It is mandatory for a LLP to file its ITR irrespective of the amount of taxable income.
- Where LLP is required to get its accounts audited either under the Income Tax Act (Tax Audit) or under any other law (LLP Act), the due date of filing ITR will be 31st October 2022. Otherwise, the LLP is required to file its ITR on or before 31st July 2022.
Form ITR-5 has been prescribed in the case of LLPs to file an income tax return.
Due date of filing ITR for firms with respect to AY 2022-23:
- Filing of Income tax return is mandatory
in the case of partnership firms irrespective of the quantum of taxable profits. Even in the case of losses, a partnership firm should file its ITR.
- If the tax audit is required in the case of a partnership firm, the due date of furnishing the tax audit report is 30th September 2022. In such a case, the ITR should be filed on or before 31st October 2022.
- In non-audit cases, the ITR of a partnership firm shall be filed on or before 31st July 2022.
- Where a partnership firm is having total income up to Rs. 50 Lakhs and declaring income u/s 44AD, 44ADA, or 44E, Form ITR-4 (Sugam) has been prescribed by the Income Tax Department. In other cases, the partnership firm should file its ITR in Form ITR-5.
Due date of filing ITR for Individuals & HUFs with respect to AY 2022-23:
If individuals & HUFs are subject to tax audit, the due date of ITR filing online is 31st October 2022. In non-audit cases, the due date of filing ITR is 31st July 2022. For ease of understanding, I have tabulated the ITR to be filed in different cases as under:
|Who shall file ITR
|Resident Individuals (other than not ordinarily resident) having total income up to Rs. 50 Lakhs from salaries, one house property, other sources & agricultural income up to Rs. 5,000.
|For individuals or HUFs not having income from business or profession and who cannot file returns in Form ITR-1.
|For individuals or HUFs having income from business or profession
|For individuals, HUFs, and Firms (other than LLPs) being a residenthaving total income up to Rs. 50 Lakhs and having income from business or profession computed u/s 44AD, 44ADA or 44AE.
Let us have a look as to who all are required to file ITR by 31st July 2022.
|Category of Taxpayer
|Due date of filing ITR
|Individuals & HUFs (Non- Audit Cases)
|31st July 2022
|Partnership Firms (Non- Audit Cases)
|31st July 2022
|Limited Liability Partnership Firms (Non-Audit Cases)
|31st July 2022
|31st July 2022
|Trusts, Colleges & Political Parties (Non-Audit Cases)
|31st July 2022
Penalty on late filing of Income Tax Return- Section 234F:
Penalty Provisions from FY 2020-21 Onwards:-
Under Income Tax Act, 1961, every assessee is required to file his/her income tax return on or before the due date prescribed under section 139(1) (due dates as discussed above). If the assessee fails to file his/her income tax return even before the extended due date, he/she will be liable to penalty under section 234F of the Income Tax Act, 1961
From FY 2020-21 onwards, the maximum amount payable on late filing of return is reduced to Rs 5,000. Hence, from FY 2020-21 onwards, if the taxpayer files the return after the due date, a penalty of upto Rs 5,000 shall be paid.
When was section 234F introduced? Section 234F was introduced by the Finance Act 2017 which brought the concept of penalty or late fees on delayed ITR filing. Penalty under section 234F is applicable for the financial year 2017-18 and onwards. If a person who is compulsorily required to file ITR under the law fails to file ITR on or before the due date prescribed, then he shall be liable to pay penalty or late fees.
Analysis of Section 234F
Section 234F reads as follows:
“(1) Without prejudice to the provisions of this Act, where a person required to furnish a return of income u/s 139, fails to do so within the time prescribed in sub-section (1) of the said section, he shall pay, by way of a fee, a sum of five thousand rupees:
Provided that if the total income of the person does not exceed five lakh rupees, the fee payable under this section shall not exceed one thousand rupees.”
It means that if a company or a firm including LLP defaults in the timely filing of their ITR, they are liableto pay at least a minimum penalty or late fee of Rs. 1,000 even if their income is nil or they have incurred a loss.
For ease of understanding, the above section is tabulated :
Penalty under section 234F in case of company/ firm/LLP
|If total income is up to
|If total income is more than
|Penalty/ Late Fee:
|Penalty/ Late Fee:
Penalty under section 234F in case of individual or HUF
|For assessee having total income up to Rs. 2,50,000
|For assessee having total income between Rs. 2,50,000 & Rs. 5,00,000
|For assessees having total income above Rs. 5,00,000
|Penalty or Late fee: – Nil
|Penalty or Late Fee: – Rs. 1,000
|Penalty or Late Fee: Rs. 5,000
In the case of the individual or HUF, no penalty or late fees under section 234F shall be chargeable where their total income does not exceed Rs. 2,50,000 as they are not liable to file a Return of Income under section 139(1) in such a case.
- The penalty will not be levied in such cases where ITR is filed before the due date but e-verificationis done after the due date.
- It is also important to note that the assessee is also liable to pay interest under section 234A in addition to penalty u/s 234F on late filing of ITR.
Can late fees under section 234F be waived?
No, late fee under section 234F is compulsory in
case of delayed ITR filing. It cannot be waived off in any case.
How can we avoid late fees under section 234F?
There is only one way to avoid late fees under section 234F i.e., timely filing of ITR on or before the due date.
How to pay late fees under section 234F?
The taxpayer should use Challan No. 280 for paying late fees:
- In Challan No. 280, Select type of payment as “Self-Assessment Tax (300)”
- In Details of Payments, Fill the late fee amount under the column “Others”
The late fee can be paid using net banking or using a debit card. On successful payment, you can download a copy of the challan which shows the BSR code, date of payment, and challan number. The details of the challan should be mentioned in the ITR for making a valid claim of tax, interest and late fees paid.
Why should an assessee file the return before the due date?
- Every assessee should file ITR online on or before the due date of furnishing ITR. The simple reason is to avoid late fees under section 234F. Besides this, there are some other reasons as well.
- The second and most important reason is the carry forward of losses. If an assessee has incurred losses and wants to carry forward those losses to the next year, then it is very important for him/her that the return is filed timely.
The Income Tax Act, 1961 does not allow carry forward of losses in case of belated or delayed returns.
- Along with interest on tax payable, the assessee will also be liabile to pay additional interest for late filing of return u/s 234A.
- A revised return can be filed only if there is an omission or wrong statement in the original return. Otherwise, it would not fall within the ambit of S. 139(5) (Sunanda Ram Deka vs. CIT (210 ITR 988 (Gau)).
- In case return of income, as required by section 139(4A) (Trusts) / 139(4C) (specified Trusts, institutions, Political Parties, etc.), is not filed on or before the due date (31st July in case income before claiming exemption u/s 11 is below maximum amount not chargeable to tax or 30th September where accounts are subject to audit), penalty of Rs. 100/- per day may be imposed u/s 272A(2)(e).
- No interest u/s. 234A is chargeable on the amount of self- assessment tax paid before due date of filing return of income.
- Also, in case of refund, no interest will be received for the period of delay. It means that the interest on the amount of refund will be received from the date of filing of return. This will result in hardship to the taxpayer. Return should be filed every year as e-filing of return is permissible for only for one previous year (i.e. Return for A.Y 2022-23 can be filed only upto 31.12.2022).
- Many taxpayers file returns of previous years all at once at the time of applying for bank loan. This may create problems in the loan proposal, hence regular and timely filing of returns is beneficial.
Section 119(2)(b) empowers the CBDT to authorise any Income Tax Authority to admit an application or claim for any exemption, deduction, refund or any other relief under the Act after the expiry of the period specified under the Act, to avoid genuine hardship in any case or class of cases. The claim for carry forward of loss in case of a loss return is relatable to a claim arising under the category of any other relief available under the Act. (Cir. No. 8/2001 dt. 16-5- 2001).
What care should be taken by businessmen while filing income tax returns?
Every businessman has to prepare Profit and Loss Account and Balance Sheet as per the nature of his business or profession. The businessman may determine his profit/loss by comparing current year’s actual financials with the previous years.
Further as on 31st March, depreciation, stock, accounts of debtors and creditors, etc. have to be accounted and reconciled. Also, the figures have to be matched with other tax returns, for e.g.,
GST returns. It is also essential to match and reconcile Form 26AS for credits of TDS and TCS. Further, it is mandatory for businessmen having turnover upto Rs. 2 crores to offer a presumptive income of 6% or 8% of the turnover during the year as per provisions of section 44AD. In case where they do not offer income as per section 44AD, a tax audit will be required to be carried out. And yes, it is essential to file loss return before the relevant due date, otherwise losses will not be permitted to be carried forward for claiming set-off.
What care should be taken by salaried persons while filing income tax return? Salaried persons need not worry as Form 16 issued by the employer contains all the details
of income, deductions, tax deducted, etc. They should just confirm that Form 16 and Form 26AS match and file the return accordingly. The real problem arises only when any income other than salary or any deduction has not been included in Form 16 such as interest on saving bank account, FDR, rent from house property, capital gains, LIC payments, etc. has not been included in Form 16. To avoid last minute rush and additional payment of tax, complete information of income and deductions should be given to the employer beforehand, so that proper TDS can be deducted and there will be fewer hassles while filing return of income.
Let us discuss some illustrations relating to filing of return on 31st July,2022:-
- Miss Saroj is a salaried employee. Her taxable salary income for the financial year 2021-22 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 2021-22?
Solution: – In this case, Miss Saroj will be covered under Individual and HUF (non- audit case) and hence, the due date for filing the return of income of the financial year 2021-22 will be 31st July,2022.
- Mr. Rupen is a doctor. Gross receipts for the year 2021-22 came to Rs. 18,40,000. He opts for the presumptive taxation scheme under section 44ADA. What will be the due date for filing of return of income by Mr. Rupen for the financial year 2021-22?
Solution: – 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 accountsaudited i.e., he is not covered by provisions of tax audit. He falls under Individual and HUF (non- audit case) and hence, the due date for filing the return of income of the year 2021-22 will be 31st July, 2022.
- Mr. Rahul is running a garments factory. Turnover of his business for the financial year 2021-22 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 2021-22?
Solution: – 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 the provisions of tax audit as he opts for the presumptive taxation scheme of section 44AD. Hence, the due date of filing the return of income of the year 2021-22 will be 31st July,2022
- Mr. Kaushal is a partner in Essem Trading Company. The turnover of the firm for the financial year 2021-22 amounted to
Rs. 2,84,00,000. Apart from remuneration, interest and share of profit from thefirm, Mr. Kaushal does not have 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 2021-22?
Solution: – 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 due date of filing return of income for the firm as well as Mr. Kaushal for the financial year 2021-22 will be 31st October, 2022.
Mr. Kiran is a partner in SM Enterprises. The turnover of the firm for the financial year 2021-22 amounted to Rs. 1,84,00,000. The firm has declared income @ 8% on presumptive basis under section 44AD of the Act. Apart from remuneration, interest and share of profit from the firm, Mr. Kiran does not have any other source of income. What will be the due date of filing of return of income by the partnership firm and by Mr. Kiran for the financial year 2021-22?
Solution: – The turnover of the firm is below Rs. 2,00,00,000 and since it is offering income on presumptive basis, it will not be liable to get its accounts audited. Thus, the due date of filing return of income for the firm as well as Mr. Kiran for the financial year 2021-22 weill be 31st July, 2022.
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 2021-22?
Solution: – In this case, Essem Ltd. will be covered in “Any company other than a company who is required to furnish a report in Form No. 3CEB under section 92E” and, hence, the due date for filing the return of income of the financial year 2021-22 will be 31st October, 2022.
Essem Minerals Pvt. Ltd. is a company engaged in trading of minerals and liable to furnish a report in Form No. 3CEB under section 92E. What will be the due date for filing the return of income for the financial year 2021- 22?
Solution: – In this case, Essem Ltd. will be covered in “Any person (may be corporate/non corporate) who is required to furnish a report in Form No. 3CEB under section 92E” and hence, the due date for filing the return of income of the financial year 2021-22 will be 30th November, 2022.
- Mr. Raja is a trader of agricultural products. Turnover of his business for the financial year 2021-22 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 turnover. He declared income at less than 8% of turnover. What will be the ‘due date’for filing his return of income for the financial year 2021-22? 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 has not opted for presumptive taxation scheme of section 44AD and declared income at less than 8% of turnover, he will be required to get his accounts audited under section 44AB and hence, he is covered in “Any person (other than a company) whose accounts are to be audited under the Income-tax Law or under any other law”. Hence, the due date for filing the return of income for the financial year 2021-22 will be 31st October, 2022.
- If he cannot file the return of income by the due date, i.e., by 31st October, 2022, then he can file a belated return by 31st December, 2022 or before completion of assessment, whichever is earlier.
Mrs. Gupta is house wife and has no source of income. During the financial year 2021- 22, she made payment towards electricity bills of her house. Total payment of Rs. 1,50,000 was made through her bank account. Whether Mrs. Gupta will be liable to file return of income?
Solution: – With effect from Assessment Year 2020-21, a person shall be mandatorily liable to file return of income if he has incurred aggregate expenditure in excess of Rs. 1 lakh towards payment of electricity bill. In this case, Mrs. Gupta has made payment of Rs. 1,50,000 towards electricity bills. Thus, she will be liable to file returnof income for the financial year 2021-22 by 31st July,2022.
Mr. Raghav is a salaried employee. He gifted a holiday package of Dubai to his brother. Mr. Raghav paid total amount of Rs. 2.5 lakhs to tour operator for the holiday package. His salary income for the financial year 2021-22 is Rs. 2,00,000 and has no other income. Whether Mr. Raghav is liable to file return of income?
With effect from Assessment Year 2020- 21, a person shall be mandatorily liable to file return of income if he has incurred aggregate expenditure in excess of Rs. 2 lakhs for himself or any other person for travel to a foreign country. So, whether a person incurred expense for himself or for any other person, filing of return is mandatory if expenses on foreign travel during the financial year is in excess of
Rs. 2 Lakhs.
- In this case, Mr. Raghav has purchased holiday package worth Rs. 2.5 lakhs. Thus, he will be liable to file return of income for the financial year 2021-22 by 31st July,2022 even though his total income doesn’t exceed the maximum amount not chargeable to tax.
The CBDT released Notification No. 37/2022 dated April 21, 2022 that specifies additional conditions for filing income tax returns if an individual’s income is below the basicexemption limit. These conditions are inserted as an amendment to the Income Tax Rules in Rule 12AB.
The conditions are specified below:
- Total business sales/turnover/gross receipts during the financial year exceeds Rs. 60 lakh; or
- Total professional gross receipts exceed Rs. 10 lakh during the financial year; or
- Aggregate TDS and TCS during the financial year is Rs. 25,000 or more (In the case of senior citizens an increased limit of Rs. 50,000 shall be applicable); or
- Total deposits in one or more savings bank accounts is Rs. 50 lakh or more during the financial year
The Act already contains certain conditions where you are required to file an income tax return even if the income is below the threshold limit. The conditions are discussed in detail above.
Other Scenarios Where It Is Mandatory to File ITR
It is mandatory under the Income-tax Act to file an ITR in India in the following circumstances:
- If gross total income (before allowing any deductions under Section 80C to 80U) exceeds Rs. 2.5 lakhs in FY 2020-21. This limit is Rs. 3 lakhs for senior citizens (aged above 60 but less than 80) and Rs. 5 lakhs for super senior citizens (aged above 80).
- A company or a firm irrespective of whether they have income or loss during the financial year.
- Where assessee wants to claim an income tax refund.
- Where assessee wants to carry forward a loss under a head of income.
- Filing an income tax return is mandatory if assessee is resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs).
- Where assessee is a resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs).
- When assessee is in receipt of income derived from property held under a trust for charitable or religious purposes, or a political party or a research association, news agency, educational or medical institution, trade union, a not-for-profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
- A foreign company taking treaty benefits on a transaction in India.
- A proof of return filing may also be required at the time of applying for a loan or a visa.
- Any individual, NRI or not, whose income exceeds Rs 2.5 lakh (for FY 2020-21) is required to file an ITR in India. The limit is same for all individuals; there is no higher threshold limit for senior or super- senior citizens. Please note that for an NRI, income earned or accrued in India is taxable in India.
ITR forms for FY 2021-22 notified, no major changes in income tax return forms.
The Central Board of Direct Taxes (CBDT) has notified the income tax return (ITR) forms for FY 2021-
The forms have been notified via a notification dated March 30, 2022. As in the past two years, the income tax return forms have been kept largely unchanged.
Like last year, ITR-1 can be filed by individuals having total income up to Rs. 50 lakh. The source of suchincome can include salaries, income from one house property and other sources such as interest income, dividend etc. and agricultural income up to Rs 5,000.
An individual will not be eligible to file ITR- 1 if he/she is a director of a company or has invested in unlisted equity shares or income tax on ESOPs is deferred or where TDS has been deducted under section 194N. Further, individuals filing tax return using ITR-1 will be required to provide break upof their salary details such as salary, perquisite, allowances exempt under section 10 (such as HRA, LTA etc. in case they have opted for old tax regime) etc.
Individuals receiving pension from accounts held in foreign countries and filing ITR-1 in India will be required to provide additional details. They will have to give details of the retirement benefit account maintained in a notified country under section 89A and retirement account maintained with non-notified countries.
Individuals will have to file ITR 2 if they have capital gains from sale of assets such as mutual funds, stocks etc. or have more than one house property. However, they will not be able to use ITR 2 if they have profits and gains from business or profession. There is no major change in the ITR 2 form. This year too, individuals will be required to provide additional details of their employer. These include nature of employer and complete address of the employer. The ITR 2 form has been modified to capture additional information. With respect to stock option benefits provided by eligible startups, the trigger for taxation is deferred to the point of sale. A separate schedule has now been introduced to capture details of such deferment. Interest accrued on PF contributions beyond specified limits is taxable. The tax return forms seek to capture details of such interest accrued as well
ITR-4, also known as SUGAM, is applicable for individuals and HUFs (Hindu Undivided Family) or a partnership firm (otherthan LLP) having total income up to Rs 50 lakh and having income from business and profession. The income from business and profession is computed under sections 44AD, 44ADA or 44AE. This is not for an individual who is either director in a company or has invested in unlisted equity shares or if income tax is deferred on ESOP or has agriculture income more than Rs 5,000.
ITR-3 will be applicable for individuals and HUFs having income from profits and gains of business orprofession except those eligible for ITR-4.
ITR-5 is for persons other than individuals, HUFs, company or person filing ITR-7.
ITR-6 is for companies other than those claiming exemption under section 11 of the Income-tax Act.
ITR-7 has been notified by the government on April 1, 2022. As per the notified tax return form, ITR-7 isapplicable for persons including companies required to furnish return under sections 139(4A), 139(4B), 139(4C) or 139(4D).
11 changes in new Income Tax Forms for FY 2022
- Pensioners needs to disclose their income is from Central Govt or State or PSU or others.
- Business has to disclose which tax regime they are paying tax, opted before, opted now or not opting.
- Business opting for presumptive taxation has to disclose the receipt and payment in cash also in Non-account payee cheque or Demand Drafts.
- Chose an Option for Residential Status in India in detail for all Taxpayers.
- Dividend Income to be disclosed in Income from Other Source and not in Profits and Gains from Business and Profession.
- ESOP differed Tax Schedule to be updated.
- Interest disclosure in case of PF is more than 2.5 Lakhs.
- Significant Economic Presence – Non- Resident Transaction of more than 2Cr or user base of 3 Lakhs in previous year.
- Buying or selling any property, you need to mention date of transactions in ITR forms so to avail benefit of deduction in Section 54, 54EC, 54F. Country and Pin Code in case you buy property in foreign country.
- Dividend income in case of payment of loan or advance by shareholder who is also a beneficial owner.
- Separate disclosure of capital gains on transfer of asset of partnership firm in case of dissolution.
In the words of Frank Degen, “Always file your tax return on time, even if you don’t have the money. The biggest penalty is late filing.” So assesses must ensure that return is filed on time and with correct ITR Form to avoid penalty. Looking at this it seems that simplification of tax laws may not happen but at least stabilisation or standardisation of tax laws happens that make the life simpler.