[FAQs] Income Tax Returns (ITR) | e-Filing of ITR

Every individual assigned a PAN and eligible for an Aadhaar number must inform the income tax department of their Aadhaar number. Once PAN and Aadhaar are linked, the Income Tax Act permits using either Aadhaar or PAN interchangeably. Therefore, if you have linked your Aadhaar with your PAN, you can use your Aadhaar number as a ‘User ID’ in place of your PAN to log in to the e-filing portal.

The e-filing portal offers the option to log in using Internet banking, accessible at the bottom of the login page.

This feature is particularly helpful for users who have forgotten their passwords and are unable to reset them through conventional methods.

If you do not have access to the mobile number registered with the e-filing portal or the mobile number linked with Aadhaar, you can reset your password using a valid Digital Signature Certificate (DSC). You can reset the password even if the DSC is not registered on the portal as long as it is linked to your PAN. Alternatively, you can log in directly using the Net Banking facility. If these options are not available, you can send a request to efilingwebmanager@incometax.gov.in, including:

• A scanned copy of your PAN
• A scanned PDF of your identity proof (passport, voter ID, driving license, Aadhaar card, or bank passbook with a photo)
• A scanned PDF of your address proof (same options as above)
• A written letter requesting a password reset with valid reasons

Ensure all documents are self-attested and attached in ZIP format. The request must come from the registered email ID in the e-filing profile. After validation, a password reset link will be sent to the email ID from which the request was received.

Income tax returns must be filed electronically, either online or using the offline utility provided by the Income Tax Department. However, individuals aged 80 or above filing ITR-1 or ITR-4 can choose to file in paper mode. For electronic filing, the options are:

• E-filing using a Digital Signature Certificate (DSC)
• E-filing without a DSC
• E-filing through Aadhaar OTP
• E-filing under Electronic Verification Code (EVC)

If the return is filed using a DSC, Aadhaar OTP, or EVC, there’s no need to send the signed ITR-V (acknowledgement) to Bengaluru CPC. If filed without these methods, you must send the signed ITR-V to the following address by ordinary or speed post:

“Income Tax Department – Centralized Processing Centre, Income-tax Department, Bengaluru -560500.”

The time limit for e-verification or submission of ITR-V is 30 days from the date of filing the return electronically[1]. If not verified within this period or by the due date specified in the IT Act, the return will be considered invalid due to non-verification[2]. For example, if you upload your return on July 1, 2024, you must verify it by July 31, 2024. Verification can occur until December 31, 2024, the due date for filing a belated return. If verified after July 31 but before December 31, it will be treated as a belated return.

If you fail to verify or submit the ITR-V by December 31, 2024, for the Assessment Year 2024-25, the return will be treated as invalid. You may request condonation of the delay by providing a valid reason. The return will only be verified and treated as valid if the Income-tax Department approves the request.

The CBDT[3] guidelines for ITR verification are as follows:

• The date of uploading the ITR is considered the date of filing if e-verification/ITR-V is submitted within 30 days.
• If e-verification/ITR-V is submitted after 30 days, the verification date is treated as the filing date, leading to the consequences of late filing.

For instance, if the due date for filing is July 31, 2024, and Mr. X filed on July 20, 2024, but verified it on August 5, 2024, within 30 days, his filing date remains July 20, 2024. If he verifies on August 25, 2024, beyond the 30-day period, August 25 will be the filing date, making it a belated return.

Previously, the dispatch date of the speed post was used to determine the 30-day limit. From April 1, 2024, the date CPC receives the verified ITR-V is considered for determining the 30-day period from the upload date[4].

Yes, you can discard an ITR if you do not want to verify it, thus preventing the department from processing it. This can be done through the e-filing portal under “www.incometax.gov.in → Login → e-File → Income Tax Return → e-Verify ITR → Discard.” This option is only available for ITRs pending verification and not for those already verified.

A. Income Exceeding the Threshold Limit:

An individual or HUF, whether resident or non-resident, must file a return if their income, before claiming certain deductions or exemptions, exceeds the maximum exemption limit. This includes exemptions under Sections 10(38), 54, 54B, 54D, 54EC, 54F, 54G, 54GA, 54GB and deductions under Sections 10A, 10B and 80C to 80U.

B. Assets Outside India:

A resident and ordinarily resident in India must file a return even if their income is below the exemption limit if they:

• Hold assets or financial interests outside India
• Have signing authority in any account outside India
• Are beneficiaries of any assets outside India

C. Seventh Proviso to Section 139(1):

• Filing is mandatory if:
• More than Rs. 1 crore is deposited in current accounts
• More than Rs. 2 lakh is spent on foreign travel
• More than Rs. 1 lakh is paid for electricity
• Business sales exceed Rs. 60 lakhs
• Professional gross receipts exceed Rs. 10 lakhs
• Total tax deducted and collected is Rs. 25,000 or more (Rs. 50,000 for senior citizens)

These requirements are outlined in Notification No. 37/2022 dated 21-04-2022.

If a non-resident has taxable income in India, they must file an Income-tax return per the provisions applicable to resident assessees. If a firm is fiscally transparent under a DTAA with India, the return should align with the partner’s status in that firm.

Non-resident individuals or entities are exempt from filing a return of income in India under certain conditions, provided that taxes have been appropriately withheld from the income they earned in India. The specific circumstances under which this exemption applies are outlined below:

A. Non-Resident Indian

A non-resident Indian is exempt from filing a return if their total income consists solely of the following and taxes have been deducted at source:

• Investment income from a foreign exchange asset, such as shares or debentures of an Indian company.
• Long-term capital gains from such foreign exchange assets.

B. Non-Resident Sportsperson

A non-resident, non-citizen sportsperson, including athletes, is not required to file a return if their income consists of the following and taxes have been deducted:

• Income from participation in any game or sport in India (excluding winnings from lotteries, etc., as per Section 115BB).
• Advertisement income.
• Income from contributing articles on any game or sport in Indian newspapers, journals, or magazines.

C. Non-Resident Sports Association

A non-resident sports association or institution does not need to file a return if their income is from guaranteed payments related to games or sports played in India (excluding winnings from lotteries as per Section 115BB) and taxes have been deducted.

D. Non-Resident Entertainer

Non-resident, non-citizen entertainers are exempt from filing a return if their income is derived from performances in India, provided that taxes have been deducted at source.

E. Non-Residents with Specified Income

Non-residents, including foreign companies, do not need to file a return if their total income comprises the following, and taxes have been deducted:

• Interest on bonds issued by an Indian company under specified schemes purchased in foreign currency.
• Dividend income from Global Depository Receipts (GDRs) as per Section 115AC.
• Interest received from the Government or Indian concerns on foreign currency borrowings.
• Interest from Infrastructure Debt Funds as specified in Section 10(47).
• Interest on Rupee Denominated Bonds as per Section 194LC.
• Interest on investments in Rupee-Denominated Bonds of Indian companies or Government securities as per Section 194LD.
• Distributed income being interest from a Special Purpose Vehicle as per Section 194LBA(2).
• Income from mutual fund units purchased in foreign currency as specified in Section 10(23D).
• Royalty or fees for technical services received from the Government or Indian concerns, provided taxes have been deducted as per relevant provisions.

If income falls under items (c) to (j), the exemption from filing a return is applicable only if the tax has been withheld at a rate not less than the prescribed rate under the relevant sections.

F. Foreign Company with POEM in India

A foreign company deemed to be a resident of India due to its Place of Effective Management (POEM) is exempt from filing a return if its income consists solely of the following and taxes have been deducted:

• Dividend income.
• Interest from Government or Indian concerns on foreign currency borrowings.
• Interest from Infrastructure Debt Funds as per Section 10(47).
• Interest on Rupee Denominated Bonds as per Section 194LC.
• Interest on investments in Rupee-Denominated Bonds of Indian companies or Government securities as per Section 194LD.
• Distributed income being interest from a Special Purpose Vehicle as per Section 194LBA(2).
• Income from mutual fund units purchased in foreign currency as specified in Section 10(23D).

G. Non-Residents with Income from IFSC Investment Funds

Non-residents and foreign companies are exempt[5]  from filing a return if their income is derived from investments in an Investment Fund set up in an International Financial Services Centre (IFSC) and:

• The income is the only taxable income in India.
• Taxes on such income have been deducted and remitted to the Central Government as per Section 194LBB.
• No notice for filing a return has been issued under Sections 142(1), 148, 153A, or 153C.

H. Non-Residents with Income from Specified Funds

Non-residents and foreign companies are exempt[6]  from filing a return if their income is derived from investments in Category III Alternative Investment Funds (AIF) meeting the specified conditions under Section 10(4D), provided:

• They have no other income in India.
• Taxes have been deducted at source and remitted.
• The required details, such as name, email, contact number, address, and tax identification number, have been furnished to the AIF.
• No notice for filing a return has been issued under Sections 142(1), 148, 153A, or 153C.

I. Eligible Foreign Investor

Non-residents classified as eligible foreign investors are exempt[7] from filing a return if they:

• Operate under SEBI’s circular[8].
• Only engage in transactions of capital assets listed on recognized stock exchanges in an IFSC.
• Ensure consideration for such transactions is in foreign currency.
• Have no other income in India apart from the capital assets.
• Provide required details, such as name, email, contact number, address, and tax identification number, to the stock broker.
• Have not received a notice to file a return under Sections 142(1), 148, 153A, or 153C.

From Assessment Year 2019-20, assessees must provide their residential status, days of stay in India, the jurisdiction of their residence, and tax identification number if they are non-residents. In countries where a Taxpayer Identification Number (TIN) is not allotted, the Central Board of Direct Taxes (CBDT) clarified[9] non-residents to use their passport number instead of the TIN.

Yes, it is mandatory to file an Income Tax Return (ITR) if the total income, before claiming exemptions on capital gains under Sections 54, 54B, 54EC, 54F, 54G, 54GA, and 54GB, exceeds the maximum amount not chargeable to tax. The filing requirement is based on total income before any exemptions.

Non-residents can register on the e-filing portal using a foreign mobile number. The portal requires verification via One-Time Password (OTP) sent to the primary mobile number and email ID, which does not need to be Indian.

Once you have filed your return, you can file a revised return if you discover any omission or incorrect statement in your initial filing that needs to be corrected. However, a revised return cannot be filed to change the method of accounting, as a change in accounting method is not considered an omission or an incorrect statement. Therefore, you cannot switch from the mercantile method to the cash method by filing a revised return.

Yes, you can file a revised return using a different form. The Income Tax Act permits the filing of a revised return in a new form if necessary. For example, if you initially filed ITR-1 for salary income but later realized you need to include lottery income, you can use ITR-2 for the revised return.

You cannot file a new rectification request until the Income Tax Department has processed your previous request. You must wait for the processing of your first rectification request before submitting another one for any subsequent errors you find.

The requirement to file a return of income is governed solely by Section 139 of the Income Tax Act. You are not required to file a return just because a financial transaction has been reported in the SFT, unless your case falls under the criteria specified in Section 139. Therefore, it is not mandatory to file a return based solely on the reporting of a financial transaction in the SFT.

If your return has been declared invalid, it is considered as though no return has been filed. In this case, you can submit a new return if the deadline for filing the original or belated return has not passed. If the deadline has already passed, you cannot file the return for that assessment year. The Assessing Officer can then make a best judgment assessment under Section 144. Alternatively, you can approach the Central Board of Direct Taxes (CBDT) to request a condonation for the delay in filing your return.