Income-Tax Return and Assessment

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  • Last Updated on 27 January, 2021

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Income Tax Return Filing Has Been Made Mandatory in Certain Circumstances:

1. Amendment made by the Finance (No.2) Act, 2019:

In order to ensure that persons, entering into certain high value transactions, furnish the Income-tax return, the Finance (No.2) Act, 2019 has amended section 139 so as to provide that, in addition to those who were required to furnish their return of income, a person shall be mandatorily required to file his return of income, if during the previous year he: i) Has deposited an amount (or aggregate of amount) in excess of Rs 1 crore in one or more current account maintained with a bank or a co-operative bank. ii) Has incurred aggregate expenditure in excess of Rs. 2 lakh for himself or any other person for travel to a foreign country. iii) Has incurred aggregate expenditure in excess of Rs. 1 lakh towards payment of electricity bill.   iv) Fulfils such other conditions as may be prescribed. Further, filing of Income-tax return is made mandatory in case of an individual, HUF, AOP, BOI or AJP, if total income if such person before claiming capital gain exemption under Sections 54, 54B, 54EC, 54F, 54G, 54GA and 54GB, exceeds the maximum amount not chargeable to tax.

The amendment shall be applicable from Assessment Year 2020-21.
 

2. When return filing shall be mandatory for Assessment Year 2020-21:

From Assessment Year 2020-21, the filing of income-tax return by an Individual shall be mandatory in following situations.

 

 

 

If his income exceeds exemption limit

If income of an individual or HUF, before claiming the following deductions or exemptions, exceeds the maximum exemption limit then it is mandatory for him to file the return of income:

1. Exemption under section 10(38)4

2. Deduction under sections 10A, 10B, 10BA

3. Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB5

4. Deduction under sections 80C to 80U

This provision shall apply to both resident and non-resident individuals.

 

 

 

If he has assets outside India

An Individual, being a resident and ordinary resident in India, shall have to file his return of income, even if his income does not exceed the maximum exemption limit, if he:

1. Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India

2. Has signing authority in any account located outside India

3. Is a beneficiary of any asset (including any financial interest in any entity) located outside India.

 

 

 

If he deposits more than 1 crore in bank account

An individual shall file his return of income, even if his income does not exceed the maximum exemption limit, if he has deposited an amount (or aggregate of amount) exceeding Rs. 1 crore in one or more current accounts maintained by him with a banking company or a co-operative bank.

No reference has been made by the Finance (No.2) Act, 2019 for the deposit made in the current account maintained with a Post office. Thus, if a person is depositing more than Rs. 1 crore in a current account with a post office and his income is less than maximum exemption limit, he is not required to furnish his return of income.

If foreign travel expense is more than Rs. 2 Lakh

An individual shall file his return of Income, even if his income does not exceed the maximum exemption limit, if he has incurred more than Rs. 2 lakh 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 shall file his return of income, even if his income does not exceed the maximum exemption limit, if he has incurred an expenditure exceeding Rs. 1 lakh on electricity consumption.

 

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Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

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