ITR Week 2024-25 Archives - Taxmann Blog

Income Tax Returns (ITR) | New Tax Regime vs. Old Tax Regime

Taxmann — Fri, 14 Jun 2024 12:25:48 +0000

The choice between the new and old tax regimes depends on your eligible deductions and exemptions.
New Tax Regime – Beneficial if you have minimal deductions. Features lower tax rates but disallows most exemptions and deductions.
Old Tax Regime – Favourable if you claim significant deductions like Section 80C, 80D, and home loan interest under Section 24.

FAQ 1. What is the New Tax Regime under Section 115BAC?

Section 115BAC of the Income Tax Act introduces an alternative tax regime for Individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons (AJPs), collectively referred to as ‘eligible assesses.’ Under this regime, eligible assesses can opt to be taxed at reduced rates based on their income brackets.

The tax rates under the new regime are as follows:

Total Income (Rs)	Tax Rate
Up to 3,00,000	Nil
From 3,00,001 to 6,00,000	5%
From 6,00,001 to 9,00,000	10%
From 9,00,001 to 12,00,000	15%
From 12,00,001 to 15,00,000	20%
Above 15,00,000	30%

To qualify for the new tax regime, an assessee must adhere to the following conditions:

The total income must be computed without claiming specified exemptions and deductions
The total income must be computed without setting off losses or depreciation carried forward from previous years if these are attributable to specified exemptions and deductions
The total income must be computed without setting off any loss under the head “Income from house property” against any other head of income
The total income must be calculated after claiming depreciation in the prescribed manner. If the depreciation rate for any block of assets exceeds 40%, it is restricted to 40%
The total income must be computed without claiming any exemptions or deductions for allowances or perquisites provided under any other law currently in force

Read More
New Tax Regime for Individuals, HUFs, AOPs, BOIs or AJPs on Taxmann.com/Practice

FAQ 2. How to Choose Between the Old and New Tax Regime?

Choosing between the old and new tax regimes depends on the amount of exemptions and deductions available to the assessee. If an individual has no deductions or exemptions to claim, it is generally beneficial to opt for the new tax regime. However, if an individual can claim deductions or exemptions such as those under Section 80C, Section 80D, House Rent Allowance, or interest on a housing loan under Section 24, it is advisable to calculate taxes under both regimes to determine which option is more advantageous.

To calculate the tax under both regimes, you may use ‘Tax Calculator – Old Regime Vis-À-Vis New Regime’ available on the Income-tax Dept. website.

FAQ 3. What Are the Exemptions and Deductions Not Available in the New Tax Regime?

Opting for the lower tax rates under the new tax regime requires computing the total income without claiming the following exemptions and deductions:

Leave Travel Concession [Section 10(5)]
House Rent Allowance [Section 10(13A)]
Official and Personal Allowances (other than those prescribed) [Section 10(14)]
Allowances to MPs/MLAs [Section 10(17)]
Exemption for Income of Minor [Section 10(32)]
Deduction for Units in Special Economic Zones (SEZ) [Section 10AA]
Entertainment Allowance [Section 16(ii)]
Professional Tax [Section 16(iii)]
Interest on Housing Loan (for self-occupied house property) [Section 24(b)]
Additional Depreciation for New Plant and Machinery [Section 32(1)(iia)]
Deduction for Investment in New Plant and Machinery in Notified Backward Areas [Section 32AD]
Deduction for Tea, Coffee, or Rubber Business [Section 33AB]
Deduction for Prospecting, Extraction, or Production of Petroleum or Natural Gas in India [Section 33ABA]
Deduction for Donations to Approved Scientific Research Associations, Universities, Colleges, or Institutes [Section 35(1)(ii)]
Deduction for Payments to Indian Companies for Scientific Research [Section 35(1)(iia)]
Deduction for Donations to Universities, Colleges, or Institutions for Social Science or Statistical Research [Section 35(1)(iii)]
Deduction for Donations for Scientific Research or Expenditure on Scientific Research [Section 35(2AA)]
Deduction for Capital Expenditure on Specified Businesses (e.g., cold chain facility, warehousing facility) [Section 35AD]
Deduction for Expenditure on Agriculture Extension Projects [Section 35CCC]
Deductions under Sections 80C to 80U pexcept those under Section 80JJAA, Section 80CCD(2), Section 80CCH(2), and Section 80LA(1A)) [Chapter VI-A]

Read More
New Tax Regime for Individuals, HUFs, AOPs, BOIs or AJPs on Taxmann.com/Practice

FAQ 4. What are the Break-Even Points for Deductions at Different Income Levels?

The following table shows the break-even points for deductions at various income levels, indicating where the tax liability is the same under both the old and new tax regimes.

Income (Rs)	Deductions Required for Break Even (Rs)	Tax Liability under New Regime (Rs)	Tax Liability under Old Regime (Rs)	Comments
8,00,000	1,87,500	36,400	36,400	The new regime is beneficial if the assessee claims deductions less than Rs. 1,87,500
9,00,000	2,37,500	46,800	46,800	The new regime is beneficial if the assessee claims deductions less than Rs. 2,37,500
10,00,000	2,62,500	62,400	62,400	The new regime is beneficial if the assessee claims deductions less than Rs. 2,62,500
12,50,000	3,12,500	1,04,000	1,04,000	The new regime is beneficial if the assessee claims deductions less than Rs. 3,12,500
15,00,000	3,75,000	1,56,000	1,56,000	The new regime is beneficial if the assessee claims deductions less than Rs. 3,75,000

FAQ 5. Which Tax Regime Should I Choose if I Earn a Salary of Rs. 14 Lakhs?

For the financial year 2023-24, if you have a salary of Rs. 14 lakhs and paid Rs. 4 lakhs to repay the principal of a home loan, Rs. 50,000 for health insurance, and Rs. 1.5 lakh towards the interest on the home loan; the following comparison will help determine the best tax regime for you.

Here’s a comparison in a table format for an individual under 60 years of age:

Particulars	Old Tax Regime (Rs.)	New Tax Regime (Rs.)
Salary Income [A]	14,00,000	14,00,000
Eligible Deductions
• Standard Deduction	50,000	50,000
• Section 80C (Repayment of Home Loan)	1,50,000	–
• Section 80D (Health Insurance Premium)	50,000	–
• Section 24(b) (Interest on Home Loan for Self-Occupied House)	1,50,000	–
Total Deductions [B]	4,00,000	50,000
Net Taxable Income after Deductions [C = A – B]	10,00,000	13,50,000
Tax Payable [D]	1,12,500	1,20,000
*Add: Health and Education Cess (4%) [E = D 4%]**	4,500	4,800
Total Tax Liability [F = D + E]	1,17,000	1,24,800

In this example, the old tax regime results in a lower tax liability (Rs. 1,17,000) compared to the new tax regime (Rs. 1,24,800). Therefore, you should opt for the old tax regime.

FAQ 6. How to Opt for the New Tax Regime under Section 115BAC?

Effective from the Assessment Year 2024-25, the new tax regime will be the default option for Individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons (AJPs). If an assessee prefers the old tax regime, they must explicitly opt out of the new tax regime.

For those with income from a business or profession, opting out of the new tax regime and switching to the old tax regime requires furnishing Form No. 10-IEA on or before the due date for filing the income return under Section 139(1). Once this option is exercised, it applies to the year it is chosen and the subsequent assessment year.

Form No. 10-IEA can be filed online at Income Tax e-Filing Portal by navigating to: e-file > Income Tax forms > file Income Tax Forms.

For those with income other than from a business or profession, the choice of the tax regime can be indicated in the Income Tax Return (ITR) while filing the income return.

Read More
New Tax Regime for Individuals, HUFs, AOPs, BOIs or AJPs on Taxmann.com/Practice

FAQ 7. What Lower Tax Regimes Are Available to Other Assessees under the Income Tax Act?

The Income Tax Act provides alternative tax regimes for various types of assessees, as outlined in the table below. These regimes are not default options, so taxpayers wishing to opt for an alternative tax regime must file a specified form on or before the due date for filing an income tax return (ITR).

Alternative Tax Regime	Applicable to	Filing of Form
Section 115BA	Domestic Company	Form 10-IB
Section 115BAA	Domestic Company	Form 10-IC
Section 115BAB	Domestic Company	Form 10-ID
Section 115BAD	Co-operative Society	Form 10-IF
Section 115BAE	Co-operative Society	Form 10-IFA

These forms can be filed online at the Income Tax e-Filing Portal by navigating to: e-file > Income Tax forms > file Income Tax Forms.

The post Income Tax Returns (ITR) | New Tax Regime vs. Old Tax Regime appeared first on Taxmann Blog.

[FAQs] Income Tax Returns (ITR) | Requirement to File ITR

Taxmann — Sun, 25 Jun 2023 13:04:11 +0000

Filing an Income Tax Return (ITR) involves submitting a form to the tax authorities that details an individual’s or entity’s income, expenses, and other relevant financial information for a specific financial year. This form allows the government to assess tax liability or process refunds if excess tax has been paid.
Traders – Report gains and losses from Futures and Options (F&O) trading, calculate turnover, and determine if a tax audit is required.
Salaried Employees – Include salary income and additional income from derivatives or other sources, adhering to the relevant filing deadlines.
Crypto Investors – Report cryptocurrency transactions under the appropriate head (capital gains or business income) using Schedule VDA in ITR-2 or ITR-3.
Others – Senior citizens and individuals with interest income or winnings from online games should file ITR to claim TDS refunds and accurately report all taxable income.

FAQ 1. I am a trader in Futures and Options (F&O). This year, I incurred a loss in F&O trading. Do I still need to file my Income Tax Return (ITR) even though my income is below the exemption limit?

Individuals and HUFs must file an ITR if their income before claiming capital gain exemption and deductions under Chapter VI-A exceeds the maximum exemption limit. Although you have incurred a loss during the year and your income is below the exemption limit, you are still required to file an ITR to carry forward the F&O losses. Therefore, you should file your return of income on or before the due date to ensure the losses can be carried forward.

FAQ 2. I am a salaried employee. I do trading in derivatives such as futures and options. I would like to know the deadline for filing my Income Tax Return (ITR), whether it is 31st July or 31st October.

The gains or losses arising from trading in F&O are always taxable under the head of ‘Profits and Gains from Business or Profession’. Income or loss from F&O is considered normal business income (non-speculative business) even though delivery is not involved in such transactions.

Since your income from F&O falls under the business head, it is important to calculate your turnover to determine whether you are required to have your accounts audited. The turnover computation is crucial because the requirement for a tax audit is based on turnover. If your turnover exceeds the specified limit, you must have your accounts audited, and in that case, the due date for filing your ITR will be 31st October. However, if your turnover is below the specified limit, the due date to file the ITR will be 31st July.

FAQ 3. How to calculate the turnover in the case of F&O?

The Income-tax Act does not provide specific provisions or guidance for the computation of turnover in F&O trading. However, the ‘Guidance Note on Tax Audit’ issued by the ICAI prescribes a method for determining turnover for tax audit purposes. The turnover in F&O transactions is to be determined as follows:

The total of favourable and unfavourable differences is taken as turnover.
Premiums received on the sale of options are also included in turnover. However, if the premium received is included to determine net profit for transactions, it should not be included separately.
For reverse trades, the difference should also form part of the turnover.
In the case of an open position at the end of the financial year (i.e., trades not squared off during the same financial year), the turnover arising from the said transaction should be considered in the financial year when the transaction is actually squared off.
In the case of delivery-based settlement in a derivatives transaction, the difference between the trade price and the settlement price is considered turnover. Additionally, in the hands of the transferor of the underlying asset, the entire sale value is considered business turnover if the underlying asset is held as stock in trade.

For example, Mr A enters into the following transaction during the financial year:

Security Name	Type	Premium Received	Buy Amount	Sell Amount	Profit/(Loss)
Cipla	Futures	–	7,47,500	8,05,000	57,500
Nifty	Call	–	3,375	6,000	2,625
BHEL	Call	–	41,600	20,800	(20,800)
ONGC	Futures	–	3,48,500	3,28,000	(20,500)
IOC	Put (Sell)	500	–	–	500
ITC	Put (Sell)	1000	4,000 (Square Off Price)	–	(3,000)
Reliance Ltd.	Put	–	4,500	2,500	(2,000)

In derivative transactions, the aggregate of both favourable and unfavourable differences (i.e., income and loss) is considered turnover. Further, the premium received on the sale of options is also included in turnover if it is not included while determining the net profit or loss from the transaction. Thus, the turnover of Mr A shall be as follows:

Security Name	Profit/(Loss)
Cipla	57,500
Nifty	2,625
BHEL	(20,800)
ONGC	(20,500)
IOC	500
ITC*	(3,000)
Reliance Ltd.	(2,000)
Total Turnover	1,06,925

*Note: As the amount of premium received is already considered for computing the profit or loss from the transaction, it is not included again while computing the turnover.

FAQ 4. I am a senior citizen, and my only source of income is the interest earned from bank deposits, which is below the maximum exemption limit. The bank has already deducted tax (TDS) from this income. Am I required to file an ITR?

Filing an ITR is not mandatory since your income is below the maximum exemption limit. However, if the tax paid by an individual exceeds the actual tax liability, the excess amount is considered an ‘income-tax refund’ that can be claimed by filing a return. Since the bank has deducted TDS from your interest income, filing the ITR to claim the refund of TDS is advisable. You cannot claim any refund if you do not file the return.

FAQ 5. Which ITR form is to be used to report income from crypto?

If you have income from transferring cryptocurrencies (Virtual Digital Assets), you should report such income in ‘Schedule VDA’ in ITR-2 or ITR-3. It is important to note that you cannot use ITR-1 or ITR-4 to report this income.

FAQ 6. I only have income from cryptocurrencies. When is the due date for filing my ITR?

If you earn income only from cryptocurrencies, the due date for filing your ITR depends on the head under which you report this income. When reporting income from the transfer of virtual digital assets in ‘Schedule VDA’, you need to select whether it falls under the category of business income or capital gains. Here is how the due dates are determined based on the chosen category:

Capital Gains – If you report the income as capital gains, your due date for filing the ITR will be 31st July.
Business Income – If you report the income as business income, you need to compute the turnover to determine whether you must get your accounts audited. If your turnover exceeds the specified limit, you must have your accounts audited, and in that case, the due date for filing your ITR will be 31st October. However, if your turnover is below the specified limit, the due date for filing your ITR will be 31st July.

FAQ 7. Which ITR form is to be used to report winnings from online games?

The Finance Act 2023 introduced a new Section 115BBJ to tax winnings from online games with effect from the assessment year 2024-25. Any winnings from online games shall be taxable under this provision at the rate of 30%. If you have winnings from online games, you should report such income in ‘Schedule OS’ in ITR-2 or ITR-3. It is important to note that you cannot use ITR-1 or ITR-4 to report this income.

The post [FAQs] Income Tax Returns (ITR) | Requirement to File ITR appeared first on Taxmann Blog.

ITR Filing Due Date for AY 2024-25

Taxmann — Thu, 09 Dec 2021 11:51:20 +0000

The due dates for filing Income-tax Returns are the specific deadlines by which taxpayers must submit their Income-tax Returns to the Income-tax Department. These dates are set by the tax department and vary based on the type of taxpayer and their specific circumstances, such as whether they need to undergo an audit or submit additional reports like transfer pricing audits. Meeting these deadlines is important to avoid penalties, interest, and legal consequences.

FAQ 1. What are the Due Dates for Filing Income-tax Returns for the Assessment Year 2024-25?

The due dates for filing of ITRs for various types of assessees are as follows:

S. No.	Situation	Original Due Date
1.	Assessee is required to furnish a report of transfer pricing (TP) Audit in Form No. 3CEB	30-11-2024
2.	Assessee who is a partner in a firm required to furnish a report of TP Audit in Form No. 3CEB	30-11-2024
3.	Individual who is a spouse of a partner in a firm required to furnish a report of TP Audit in Form No. 3CEB, and provisions of section 5A applies	30-11-2024
4.	Company assessee is not required to furnish the TP Audit report in Form No. 3CEB	31-10-2024
5.	Assessee required to get accounts audited under the Income-tax Act or any other law	31-10-2024
6.	Assessee who is a partner in a firm whose accounts are required to be audited	31-10-2024
7.	Individual who is a spouse of a partner in a firm whose accounts are required to be audited and whose provisions of section 5A applies	31-10-2024
8.	Any other case	31-07-2024

The post ITR Filing Due Date for AY 2024-25 appeared first on Taxmann Blog.

Income Tax Returns (ITR) | Which ITR Form is to be filed for AY 2024-25

Taxmann — Thu, 09 Dec 2021 10:51:40 +0000

The ITR forms for the Assessment Year 2024-25 cater to various types of taxpayers based on their income sources, including salary, house property, business or profession, capital gains, and other sources. The Central Board of Direct Taxes (CBDT) has introduced several changes in the ITR forms for AY 2024-25 following amendments from the Finance Act 2023. Key changes include the option for Individuals/HUFs liable for audit to verify ITR using Electronic Verification Code (EVC), mandatory disclosure of due dates and reasons for tax audits under Section 44AB, detailed reporting on the Capital Gain Account Scheme, the inclusion of start-up PAN and DPIIT Registration Number for deferred ESOPs, an additional column for bonus payments under life insurance policies, a new Schedule 80-IAC for eligible start-ups in ITR Forms 5 and 6, and the requirement to provide Legal Entity Identifier (LEI) details for refunds of Rs. 50 crores or more.

FAQ 1. Which form should a taxpayer use for filing his income tax return for the assessment year 2024-25?

Nature of Income	ITR 1[1]	ITR 2	ITR 3	ITR 4[2]
Salary Income
Income from salary/pension (for ordinarily resident person)	✓	✓	✓	✓
Income from salary/pension (for not ordinarily resident and non-resident person)		✓	✓
Any individual who is a director in any company		✓	✓
If payment of tax in respect of ESOPs allotted by an eligible start-up has been deferred		✓	✓
Income from House Property
Income or loss from one house property (excluding brought forward losses and losses to be carried forward)	✓	✓	✓	✓
Individual has brought forward loss or losses to be carried forward under the head House Property		✓	✓
Income or loss from more than one house property		✓	✓
Income from Business or Profession
Income from business or profession			✓
Income from presumptive business or profession covered under section 44AD, 44ADA, and 44AE (for person resident in India)				✓
Income from presumptive business or profession covered under sections 44AD, 44ADA, and 44AE (for not ordinarily resident and non-resident persons)			✓
Interest, salary, bonus, commission, or share of profit received by a partner from a partnership firm			✓
Capital Gains
Taxpayer has held unlisted equity shares at any time during the previous year		✓	✓
Capital gains/loss on sale of investments/property		✓	✓
Income from Other Sources
Family Pension (for ordinarily resident person)	✓	✓	✓	✓
Family Pension (for not ordinarily resident and non-resident person)		✓	✓
Income from other sources (other than income chargeable to tax at special rates, including winnings from online games, lottery, and race horses or losses under this head)	✓	✓	✓	✓
Income from other sources (including income chargeable to tax at special rates, including winnings from online games, lottery, and race horses or losses under this head)		✓	✓
Dividend income exceeding Rs. 10 lakhs taxable under Section 115BBDA		✓	✓
Unexplained income (i.e., cash credit, unexplained investment, etc.) taxable at 60% under Section 115BBE		✓	✓
Person claiming deduction under Section 57 from income taxable under the head’ Other Sources’ (other than deduction allowed from the family pension)		✓	✓
Deductions
Person claiming deduction under Section 80QQB or 80RRB in respect of royalty from patent or books		✓	✓
Person claiming deduction under section 10AA or Part-C of Chapter VI-A			✓
Total Income
Agricultural income exceeding Rs. 5,000		✓	✓
Total income exceeding Rs. 50 lakhs		✓	✓
Assessee has any brought forward losses or losses to be carried forward under any head of income		✓	✓
Computation of Tax Liability
If an individual is taxable in respect of an income but TDS in respect of such income has been deducted in the hands of any other person (i.e., clubbing of income, Portuguese Civil Code, etc.)		✓	✓
Claiming relief of tax under sections 90, 90A, or 91		✓	✓
Others
Assessee has: Income from foreign sources Foreign Assets, including financial interest in any foreign entity Signing authority in any account outside India		✓	✓
Income has to be apportioned in accordance with Section 5A		✓	✓
If the tax has been deducted on cash withdrawal under Section 194N		✓	✓	✓
Person has deposited more than Rs. 1 crore in one or more current accounts		✓	✓	✓
Person has incurred more than Rs. 2 lakhs on foreign travel	✓	✓	✓	✓
Person has incurred more than Rs. 1 lakh towards payment of the electricity bill	✓	✓	✓	✓
Person has turnover from business exceeding Rs. 60 lakhs			✓	✓
Person has gross receipts from profession exceeding Rs. 10 lakhs			✓	✓
The aggregate amount of TDS and TCS is Rs. 25,000 (Rs. 50,000 in the case of a senior citizen) or more	✓	✓	✓	✓
The aggregate deposit in the savings bank account is Rs. 50 lakh or more	✓	✓	✓	✓
* ITR-1 can be filed by an Individual only who is ordinarily resident in India. ITR-4 can be filed only by an individual or HUF who is ordinarily a resident of India and by a firm (other than an LLP) that is a resident of India.
Other Assessees
Status of Assessee	ITR 4	ITR 5	ITR 6	ITR 7
Firm (excluding LLPs) opting for presumptive taxation scheme of section 44AD, 44ADA, or 44AE	✓
Firm (including LLPs)		✓
Association of Persons (AOPs)		✓
Body of Individuals (BOI)		✓
Local Authority		✓
Artificial Juridical Person		✓
Companies other than companies claiming exemption under Section 11			✓
Persons, including companies, are required to furnish returns under: Section 139(4A) Section 139(4B) Section 139(4C) Section 139(4D)				✓
Business Trust		✓
Investment Fund, as referred to in Section 115UB		✓

FAQ 2. What changes have been introduced in the ITR forms notified for the Assessment Year 2024-25 compared to last year’s ITR forms?

The Central Board of Direct Taxes (CBDT) typically updates the ITR forms annually to incorporate amendments made to the Income Tax Act by the preceding Finance Act. For the Assessment Year 2024-25, while the applicability of forms for different taxpayers remains unchanged, several additional reporting requirements and modifications have been introduced due to the Finance Act 2023 amendments. Some key changes in the new ITR forms include:

Verification Methods – Individuals/HUFs liable for audit can now verify their ITR using an Electronic Verification Code (EVC). Previously, verification was required only through a digital signature
Tax Audit Details – Taxpayers must now mention the due date for filing an income return and provide the reason for conducting a tax audit under Section 44AB
Capital Gain Account Scheme – Taxpayers must provide detailed information about the Capital Gain Account Scheme, not just the deposited amount, as required in last year’s form
Schedule | Tax Deferred on ESOP – The new ITR forms include a schedule requiring the eligible start-up’s PAN and DPIIT Registration Number
Schedule-OS | Other Sources – An additional column has been included for declaring bonus payments received under life insurance policies
Schedule 80-IAC – A new Schedule 80-IAC has been inserted in ITR Forms 5 and 6 to seek details regarding eligible start-ups
Legal Entity Identifier (LEI) – ITR forms now require details of the Legal Entity Identifier (LEI), a 20-character alpha-numeric code uniquely identifying parties in financial transactions worldwide. Taxpayers must provide LEI details if they are seeking a refund of Rs. 50 crores or more.

You can read about all the changes notified in the new ITR forms in the following articles published on taxmann.com:

[1] ITR-1 can be filed by an Individual only who is ordinarily resident in India.

[2] ITR-4 can be filed only by an Individual or HUF who is ordinarily resident in India and by a firm (other than LLP) resident in India.

The post Income Tax Returns (ITR) | Which ITR Form is to be filed for AY 2024-25 appeared first on Taxmann Blog.

[FAQs] Income Tax Returns (ITR) | Updated Returns

Taxmann — Thu, 09 Dec 2021 09:30:43 +0000

An Updated Return is a type of income tax return that taxpayers in India can file to correct or update information on previously submitted returns. The concept of the Updated Return was introduced by the Indian government to encourage taxpayers to voluntarily disclose omitted income or correct any mistakes in their original returns without facing severe penalties or legal action.

FAQ 1. Mr Aman filed an Income Tax return for the Assessment Year 2023-24 within the due date. On 13-05-2024, he found that he failed to report interest income in his ITR. Can he revise his ITR for AY 2023-24?

Section 139(5) allows a taxpayer to file a revised income return if he discovers an omission or error in the original return. However, the revised return can be filed three months before the relevant assessment year or before the completion of the assessment, whichever is earlier.

The Finance Act, 2022 has introduced the concept of updated return to allow an assessee a longer duration to file the return of income. An updated return can be filed within 24 months from the end of the relevant assessment year (subject to certain conditions). An updated return can be filed even after the expiry of time limits specified for the filing of a belated return or revised return of income.

In the financial year 2024-25, a person can file an updated return for the assessment years 2022-23 and 2023-24.

Read More
Updated Return of Income on Taxmann.com/Practice)

FAQ 2. Who is not eligible to file an updated return?

All taxpayers are eligible to file an updated return. However, such a return cannot be filed in the following circumstances:

If an updated return is a return of a loss
In case an updated return results in lower tax liability
In case an updated return results in or increasing the refund
In case of a search initiated against the assessee
Where books of account or assets etc. are requisitioned in case of the assessee
In case survey conducted against the assessee
Where documents or assets seized or requisitioned in case of any other person belong to the assessee
In case an updated return has already been filed
In case assessment is pending or completed
In case AO has information about the assessee under specified Acts
In case AO has information about the assessee under DTAA or TIEA
In case any prosecution proceeding is initiated or
In case of a person or class of persons as notified by the CBDT.

Read More
Updated Return of Income on Taxmann.com/Practice)

FAQ 3. Is there any fee or penalty levied upon taxpayer furnishing updated return?

No penalty or fee is levied upon a person who wishes to furnish an updated return. However, he is required to pay an additional tax in accordance with Section 140B.

The additional tax shall be equal to 25% of the aggregate of tax and interest payable by a person on the filing of the updated return, where such return is furnished after the expiry of the due date of filing of belated or revised return but before completion of a period of 12 months from the end of the relevant assessment year.

Where the updated return is furnished after the expiry of 12 months from the end of the relevant assessment year but before completion of the period of 24 months from the end of the relevant assessment year, the additional tax payable shall be 50% of the aggregate of tax and interest payable.

Further, a fee under Section 234F shall be charged if such a person did not furnish a return of income for that Assessment Year for which he is furnishing an updated return.

Read More
Updated Return of Income on Taxmann.com/Practice)

FAQ 4. Is there any separate form for filing an updated return?

No separate ITR forms have been notified for filing an updated return. A taxpayer is required to furnish an updated return on those ITR forms notified for the respective Assessment Year for which an updated return is to be furnished. Such an ITR form is to be filed along with the newly notified form ITR-U.

ITR-U seeks the following additional details from the taxpayers:

Part A General Information (ITR-U)

This part of ITR-U seeks general information from taxpayers related to the filing of an updated return. It includes the following:

Are you eligible to file an updated return? i.e., a person is not falling in such circumstances wherein an updated return ca not be filed.
Selecting the ITR form for filing an updated return
Reasons for updating income. This includes reasons such as returns previously not filed, income not reported correctly, wrong heads of income chosen, etc.
Are you filing an updated return within 12 months from the end of relevant AY or between 12 to 24 months from the end of relevant AY?
Are you filing an updated return to reduce carried forward loss, unabsorbed dep., or tax credit?

Part B – Computation of updated income and tax payable (ITR-U)

This part of ITR-U includes heads of income under which additional income is reported. The taxpayer is required to mention only additional income. As reported in Part B TI of the ITR form, total income shall also be reported here to compute the additional tax payable by the assessee on the updated return.

Adjustments such as previously paid tax, refund issued to the taxpayer, and fee for default in the furnishing of return of income under Section 234F shall be considered while calculating such additional tax.

Tax Payments (ITR-U)

This part of ITR-U includes details of tax payment by the assessee on the updated return under Section 140B and details of payments of advance tax, self-assessment tax, and regular assessment tax, the credit for which has not been claimed in the earlier return.

The post [FAQs] Income Tax Returns (ITR) | Updated Returns appeared first on Taxmann Blog.

[FAQs] Income Tax Returns (ITR) | Reporting in Schedules in ITR

Taxmann — Thu, 09 Dec 2021 08:51:42 +0000

ITR (Income Tax Return) reporting requirements refer to the information and documentation taxpayers must provide when filing their income tax returns in India. These requirements ensure taxpayers accurately report their income, deductions, and tax liabilities for the relevant assessment year. Key reporting requirements typically include:
– Disclosure of Income: Income from salary, house property, capital gains, business or profession, and other sources
– Bank Account Details: Disclosure of all bank accounts held in India during the financial year, excluding dormant accounts
–  Foreign Assets and Income: Reporting of foreign assets, foreign income, and any signing authority in foreign accounts in Schedule FA. Details of foreign taxes paid and claiming credit using Form No. 67
– Unlisted Equity Shares: Reporting details of unlisted equity shares, including company name, PAN, number and cost of shares, acquisition, and sale details in the relevant ITR forms (e.g., ITR-2, ITR-3, ITR-5)
– Virtual Digital Assets (VDAs): Reporting income from cryptocurrencies and NFTs in Schedule VDA, including acquisition and transfer details
– Deductions and Exemptions: Claiming deductions under various sections like 80C, 80D, and others. Reporting exempt income, such as agricultural income, in the appropriate schedule
– Schedule AL (Assets and Liabilities): Reporting assets and liabilities if total income exceeds Rs. 50 lakhs, including foreign assets
– Standard Deduction: Claiming a standard deduction of Rs. 50,000 against salary income, which can be claimed only once per year
– Interest Income from Provident Fund: Reporting interest income from employee contributions to provident fund accounts exceeding specified limits
– Form 16: Reporting salary income using Form 16 provided by employers.

FAQ 1. Are taxpayers required to disclose all bank accounts held during the financial year?

Yes. For the Assessment Year 2024-25, the new ITR forms mandate taxpayers to disclose all bank accounts held in India during the previous year. However, dormant accounts are exempt from this requirement.

FAQ 2. What is the ‘relevant accounting period’ for reporting foreign assets in Schedule FA?

Schedule FA (Foreign Assets) is compulsory for Indian residents if they:

Hold any assets outside India,
Have signing authority in any foreign account, or
Earn income from foreign sources.

Non-residents (NR) or Not Ordinarily Residents (NOR) are not required to file Schedule FA. The relevant accounting period for reporting foreign assets is the previous calendar year. This means assets held even for a single day between January 1, 2023, and December 31, 2023, must be reported for the Assessment Year 2024-25, irrespective of the fiscal year in the foreign country.

Example 1

Relevant previous year	April 1, 2023 – March 31, 2024
Relevant calendar year	January 1, 2023 – December 31, 2023
Date of purchase of shares in Google LLC	January 2023
Is the assessee required to furnish the details regarding the foreign assets acquired?	Yes

The assessee must furnish the details of Google LLC’s share in ITR applicable for Assessment Year 2024-25 even if he has not held the foreign asset in the previous year.

Example 2

Relevant previous year	April 1, 2023 – March 31, 2024
Relevant calendar year	January 1, 2023 – December 31, 2023
Date of purchase of shares in Google LLC	January 2024
Is the assessee required to furnish the details regarding the foreign assets acquired?	No

FAQ3. I paid taxes in a foreign country while working on a project for three months, how can I claim credit for this in my ITR?

If you paid tax in a foreign country, you can claim a credit for it in the year when the income is offered or assessed to tax in India. As per Rule 128 of the Income-tax Rules, 1962, you must submit Form No. 67 detailing the foreign income and taxes paid, along with other required documentation by the following deadlines:

Return Filing Under	Due Date of Filing Documents to Claim FTC
Original return (Section 139(1))	On or before the end of the assessment year
Belated return (Section 139(4))	On or before the end of the assessment year
Updated return (Section 139(8A))	On or before the date of filing the return

Details of the relief claimed must be reported in ‘Schedule TR’ of the ITR form.

FAQ 4. How should I report the ‘cost of acquisition’ and ‘sale consideration’ for unlisted equity shares acquired by gift, will, amalgamation, etc.?

A new table in ITR forms [ITR-2, ITR-3 & ITR-5] requires reporting unlisted equity shares, including:

Company name
Company PAN
Number and cost of shares at the beginning of the year
Details of shares acquired during the year (number, face value, issue price, and date)
Details of shares sold during the year (number and sale consideration)
Number and cost of shares at the end of the year

If the cost of acquisition or sale consideration is not ascertainable due to acquisition via gift, will, etc., zero or an appropriate value may be entered. These details are for reporting purposes only and do not impact income computation or tax liability[1].

FAQ 5. Should shares listed on the New York Stock Exchange be reported as unlisted in the ITR?

No. Shares listed on a recognized stock exchange outside India are not considered unlisted shares for ITR reporting. However, they must be reported in Schedule FA.

FAQ 6. Are shares of a cooperative bank or society considered unlisted for ITR reporting?

No. Shares in cooperative banks or societies are not considered unlisted for ITR purposes. Reporting is only required for unlisted equity shares in companies registered under the Companies Act.

FAQ 7. Do I need to report unlisted shares held as stock-in-trade?

Yes. Unlisted equity shares held as stock-in-trade must be reported in the ITR.

FAQ 8. Should foreign assets be reported in Schedule AL if they have already been reported in Schedule FA?

Yes. Schedule AL requires reporting of assets and liabilities if total income exceeds Rs. 50 lakhs. Foreign assets must be reported in Schedule FA and Schedule AL if held at the end of the previous year.

FAQ 9. What is the beneficial owner or beneficiary for reporting in Schedule FA?

A ‘beneficial owner’ is defined in Section 139(1) of the Income-tax Act, 1961, as an individual who provides, directly or indirectly, the consideration for the asset and holds it for their benefit or another person.

FAQ 10. What is the meaning of ‘Financial Interest’ in Schedule FA?

‘Financial Interest’ includes situations where the resident assessee:

Is the record owner or legal title holder of a financial account or
Holds the title indirectly through:
An agent, nominee, or attorney,
A corporation where the assessee has any share or voting power,
A partnership where the assessee has an interest,
A trust with beneficial or ownership interest,
Any entity with voting power, equity interest, or interest in profits.

FAQ 11. Should details be reported in Schedule AL if they are in the Balance Sheet Schedule of ITR?

No. Assets and liabilities disclosed in the business balance sheet in Part A-BS of ITR are not required to be reported in Schedule AL.

FAQ 12. I have deposited Rs. 7,00,000 in my provident fund account. Is there any reporting requirement?

Interest income from employee contributions over Rs. 2,50,000 (or Rs. 5,00,000 if there is no employer contribution) to a provident fund is taxable. ITR forms require separate reporting of such interest accrued.

Read More
Employee Provident Fund on Taxmann.com/Practice

FAQ 13. How should income from cryptocurrencies be reported?

Income from Virtual Digital Assets (VDAs) like cryptocurrencies and NFTs must be reported in Schedule VDA. It is taxed at 30%, and no deductions other than the cost of acquisition are allowed. Details required include acquisition and transfer dates, category of income, cost of acquisition, and consideration received.

Read More
Taxation of Virtual Digital Assets (VDAs) on Taxmann.com/Practice)

FAQ 14. Can I claim a standard deduction of Rs. 50,000 against the salary from multiple employers?

No. The standard deduction of Rs. 50,000 can only be claimed once per year, regardless of the number of employers. Salary income from all employers should be reported in ‘Schedule S’ using Form 16 from each employer.

[1] Circular No. 18/2019, dated 08-08-2019

The post [FAQs] Income Tax Returns (ITR) | Reporting in Schedules in ITR appeared first on Taxmann Blog.

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

Taxmann — Thu, 09 Dec 2021 07:51:31 +0000

Filing of Income Tax Returns (ITR) is a crucial process for taxpayers to declare their income, claim deductions, and pay taxes to the government. Filing an ITR is a legal obligation and a responsibility towards the nation. Proper filing ensures compliance with tax laws, helps avail refunds, and supports financial history documentation. Utilizing the e-filing portal effectively and adhering to guidelines can make the process seamless and efficient.

FAQ 1. How to log in to www.incometax.gov.in using an Aadhaar number?

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.

FAQ 2. How to log in to www.incometax.gov.in through the Net Banking facility?

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.

FAQ 3. How can I reset the password if I do not have access to the mobile number registered with the e-filing portal and Aadhaar?

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.

FAQ 4. What are the modes for filing a return of income?

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.”

FAQ 5. What is the time limit for sending a signed copy of ITR-V to CPC or verifying the return furnished online?

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.

FAQ 6. What happens if I do not verify ITR by December 31, 2024?

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.

FAQ 7. What are the norms related to the verification of ITR?

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.

FAQ 8. If Mr Raj filed his ITR on July 10, 2024, and sent the signed ITR-V to CPC Bengaluru on August 8, 2024. CPC Bengaluru received it on August 12, 2024. Will the ITR be treated as verified within 30 days?

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].

FAQ 9. Can I cancel an uploaded ITR if I missed reporting details and upload a fresh ITR?

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.

FAQ 10. When is it mandatory to file the return of income for an individual or HUF?

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.

Read More
Return of Income on Taxmann.com/Practice

FAQ 11. When is it mandatory for a non-resident to file a return of income?

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.

Read More
Filing of Income-tax Return by Non-residents on Taxmann.com/Practice

FAQ 12. Under what circumstances is a non-resident exempt from filing a return of income?

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.

Read More
Filing of Income-tax Return by Non-residents on Taxmann.com/Practice

FAQ 13. How to furnish a Taxpayer Identification Number (TIN) in the “residential status” column in the ITR form if not allotted in the resident country?

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.

FAQ 14. Is it necessary to file an ITR if a housewife has long-term capital gains?

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.

Read More
Return of Income by Non-residents on Taxmann.com/Practice

FAQ 15. How can a non-resident register on the e-filing portal without an Indian mobile number?

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.

FAQ 16. Can I file a revised return with income computed using the cash method instead of the mercantile method?

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.

FAQ 17. Can I change the ITR Form from ITR-1 to ITR-2 when filing a revised return to include additional income, such as lottery winnings?

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.

FAQ 18. I found an error in my processed return and filed a rectification request. Now, I’ve discovered another error, but the e-filing portal won’t allow me to submit a second rectification request. What should I do?

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.

FAQ 19. Is it mandatory to file an ITR if a financial transaction is reported in the Statement of Financial Transactions (SFT)?

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.

FAQ 20. My return was declared invalid because I failed to respond to a notice regarding its defectiveness. How can I correct this invalid return?

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.

[1] The limitation period to verify the return has been reduced from 120 days to 30 days vide Notification No. 5 of 2022, dated 29-7-2022

[2] The outer date to verify the return has been introduced vide Notification No. 2 of 2024, dated 31-03-2024

[3] Notification No. 05 of 2022, dated 29-07-2022, and Notification No. 2 of 2024, dated 31-03-2024

[4] Notification No. 2 of 2024, dated 31-03-2024

[5] Notification No. S.O. 2672(E), dated 26-07-2019

[6] Notification No. 119, dated 11-10-2021

[7] Notification No. 119, dated 11-10-2021

[8] SEBI Circular No.IMD/HO/FPIC/CIR/P/2017/003, Dated 4-1-2017

[9] Circular No. 18/2019, dated 8-8-2019

The post [FAQs] Income Tax Returns (ITR) | e-Filing of ITR appeared first on Taxmann Blog.

[FAQs] Income Tax Returns (ITR) | Annual Information Statement (AIS)

Taxmann — Thu, 09 Dec 2021 06:51:35 +0000

The Annual Information Statement (AIS) is a detailed summary of an individual's financial transactions throughout the year, including TDS/TCS, specified financial transactions, tax payments, demands and refunds, and the status of tax proceedings. It is available on the income-tax e-filing portal and aids in pre-filling the Income-tax Return (ITR) form. Taxpayers can view and provide feedback on their AIS through the portal.

FAQ 1. Certain information about my income and deductions, etc., is pre-filled in the Income-tax return. What is the source of that information?

The Government has expanded the scope of Form 26AS to include detailed information about various financial transactions carried out by an individual throughout the year. The Central Board of Direct Taxes (CBDT[1]) has replaced Rule 31AB with a new Rule 114-I, mandating uploading the Annual Information Statement (AIS) in Form No. 26AS to the taxpayer’s registered account. This form contains information such as:

Details of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS).
Specified Financial Transactions (SFT).
Tax payments.
Details of demands and refunds.
Status of pending proceedings.
Information on completed proceedings.
Data received from any authority or individual under any law or under agreements as per sections 90 and 90A, and any other relevant data deemed necessary for revenue interests.

This information in the AIS is used to pre-fill relevant sections of the Income-tax Return (ITR) form.

Read More
Annual Information Statement (AIS) on Taxmann.com/Practice)

FAQ 2. Can a taxpayer access the information available in the Annual Information Statement (AIS)?

Taxpayers can view their AIS by logging into their income-tax e-filing account. If any details in the AIS appear to be incorrect, duplicate or pertain to another individual, taxpayers can provide feedback directly through the portal. They can also access AIS information via an offline utility if preferred.

FAQ 3. How to access the Annual Information Statement (AIS) online?

Follow these steps to access AIS information online:

Step 1 – Log in to the Income-tax e-filing website at https://www.incometax.gov.in/. New users must register first.

Step 2 – After logging in, navigate to Services > Annual Information Statement (AIS).

Step 3 – A prompt will appear; click ‘proceed’ to be redirected to the AIS homepage.

Step 4 – The next screen will show the AIS and Taxpayer Information Summary (TIS) instructions. The TIS categorises AIS data and shows original and revised values used to pre-fill the tax return.

Step 5 – Click on the ‘AIS‘ tab. You will see two options: Taxpayer Information Summary (TIS) and Annual Information Statement (AIS). Choose the financial year from the dropdown and click on the AIS tile to view the information.

Step 6 – AIS information is divided into Part A and Part B on the next screen.

Part A includes general taxpayer information (e.g., PAN, Aadhaar, Name, Date of Birth, Mobile Number, Email ID, Address).
Part B contains detailed financial data for the selected year, including:

1. TDS/TCS Information
2. SFT Information
3. Tax Payments
4. Demands and Refunds
5. Other Information

Step 7 – AIS data can be downloaded in CSV, JSON, or PDF formats. CSV downloads are per transaction category, while the entire AIS can be downloaded in PDF or JSON. Note that PDFs are password-protected. The password combines the PAN (in lowercase) and the date of birth or incorporation, formatted as DDMMYYYY without spaces.

For example, if the PAN is AAAAA1234A and the date of birth is January 21, 1991, the password will be aaaaa1234a21011991.

Read More
How to access the Annual Information Statement (AIS) online? on Taxmann.com/Practice)

FAQ 4. What should I do if the information in AIS is incorrect or does not belong to me?

If a taxpayer finds any incorrect, duplicate, or unrelated information in the AIS, they can submit feedback online through the income-tax e-filing portal or via an offline utility.

Read More
How to submit feedback on AIS Information (online)? on Taxmann.com/Practice)

FAQ 5. How to submit feedback on AIS Information (online)?

To provide feedback on AIS information, follow these steps:

Step 1 – Visit the Income-tax e-filing portal and access the AIS.

Step 2 – In the AIS, detailed financial data for the selected year is available under Part B in various categories:

TDS/TCS Information
SFT Information
Tax Payments
Demands and Refunds
Other Information

Step 3 – Click on the relevant category tab to view detailed information.

Step 4 – Click the left-hand icon to expand and view transaction-level details.

Step 5 – To provide feedback, click on the ‘Optional’ tab in the feedback column for the concerned transaction. Feedback can be submitted in bulk for multiple transactions.

Taxpayers can select from various feedback options, such as:

Information is correct.
Information is not fully correct.
Information pertains to another PAN/year.
Information is duplicate/included elsewhere.
Information is denied.
Custom feedback based on the transaction type, including an option for ‘Income is not taxable’ for income-related transactions.

Step 6 – After submitting feedback, a success message will appear, indicating that the Taxpayer Information Summary (TIS)[2] will be updated accordingly. The feedback may also be shared with the information source for further review. An acknowledgement receipt can be downloaded from the activity history.

Read More
How to submit feedback on AIS Information (online)? on taxmann.com/Practice)

[1] Notification No. G.S.R. 329(E), dated 28-05-2020

[2] Taxpayer Information Summary (TIS) displays the information available in AIS category-wise. It shows original value as well as revised value (i.e., value processed after taxpayer’s feedback). The revised values in TIS is used for prefilling of return.

The post [FAQs] Income Tax Returns (ITR) | Annual Information Statement (AIS) appeared first on Taxmann Blog.

[FAQs] Income Tax Returns (ITR) | Capital Gains

Taxmann — Thu, 09 Dec 2021 05:51:37 +0000

Capital Gains refer to the profit realized from the sale or exchange of an asset that has appreciated in value over time. The gain is the difference between the asset's purchase price (cost basis) and selling price. Capital gains can occur on various types of assets, including stocks, bonds, real estate, and personal property.
There are two main types of capital gains:
– Short-Term Capital Gains: These are gains from the sale of assets held for one year or less. Short-term capital gains are typically taxed at the same rate as ordinary income.
– Long-Term Capital Gains: These are gains from the sale of assets held for more than one year. Long-term capital gains usually benefit from lower tax rates than short-term gains, encouraging long-term investment.

FAQ 1. I have earned profit from selling listed shares I have held for over 12 months. Will this be treated as capital gain or business profit?

According to Circular No. 6/2016, dated 29-2-2016, the Central Board of Direct Taxes (CBDT) has provided guidelines for determining whether the surplus from the sale of listed shares or other securities should be treated as capital gains or business income:

Stock-in-Trade: If the assessee chooses to treat the listed shares and securities as stock-in-trade, irrespective of the holding period, the income from their transfer will be considered business income.
Long-Term Capital Gains: For listed shares and securities held for more than 12 months prior to transfer, if the assessee opts to treat the income from their transfer as capital gains, the Assessing Officer will not dispute this choice. However, the stance taken by the assessee must remain consistent in subsequent Assessment Years. Changing this position in later years is not permitted.

These guidelines are aimed at reducing litigation and ensuring consistency in the tax treatment of income from the transfer of shares and securities. All other relevant provisions of the Income Tax Act will continue to apply to such transactions.

Furthermore, the CBDT[1] has decided that income from the transfer of unlisted shares, regardless of the holding period, will be treated under the head’ Capital gains’ to minimize disputes and maintain a uniform approach.

FAQ 2. I have earned a profit from intra-day trading. Is it taxable as business profit or capital gain?

Intra-day trading is classified as a speculative business. The gains or losses from such trading are considered speculative gains or losses. Speculative gains are taxed at normal income tax rates, while speculative losses can only be offset against speculative gains.

FAQ 3. I have earned a long-term capital gain of Rs. 10 lakhs, taxable at 10% under Section 112A. I have also made an eligible investment of Rs. 1 lakh for Section 80C deductions. How much tax do I need to pay on such income?

The exemption limit applies to long-term capital gains taxable under Section 112A, but deductions under Chapter VI-A are not applicable to such gains. The tax calculation is as follows:

Particulars	Amount (Rs.)
Total income (long-term capital gains in excess of Rs. 1,00,000)	9,00,000
Less: Maximum amount not chargeable to tax	2,50,000
Gross total income	6,50,000
Tax rate under Section 112A	10%
Tax payable (after cess)	67,600

FAQ 4. Mr X has transferred equity shares of various companies after holding them for more than 12 months. Does he need to enter the details of capital gains for each scrip in the ITR?

The Finance Act 2018 introduced a grandfathering mechanism to exempt gains on listed shares and specified units up to 31-01-2018 for the computation of long-term capital gains. For the Assessment Year 2020-21, the CBDT has clarified[2] that scrip-wise details are required for those shares or units eligible for grandfathering. Based on this, it can be inferred that for AY 2024-25, scrip-wise details are not needed in the income tax return forms for gains that are not eligible for grandfathering.

FAQ 5. Should property and buyer information be reported under the Capital Gain Schedule if such property is situated outside India and sold to a non-resident?

The Capital Gain Schedule (Schedule CG) in the Income Tax Return (ITR) requires the assessee to provide details of any immovable property transferred during the year. This includes the buyer’s information such as name, PAN/Aadhaar No., property address, purchase and sale dates, country, and zip code. It is mandatory to provide these details whether the property is located in India or abroad. However, the buyer’s PAN is only required if tax is deducted under section 194-IA or if it is mentioned in the sale documents.

[1] Letter F.No.225/12/2016/ITA.II, dated May 2, 2016

[2] Press Release, dated 26-09-2020

The post [FAQs] Income Tax Returns (ITR) | Capital Gains appeared first on Taxmann Blog.

[FAQs] Income Tax Return – Tax Payment | TDS | TCS | Refunds

Taxmann — Thu, 09 Dec 2021 04:51:36 +0000

A tax refund is a repayment to taxpayers of any excess amount paid to the government in taxes. This overpayment can occur for various reasons, such as errors in tax withholding from wages, overestimating tax payments, or eligibility for refundable tax credits. After the taxpayer files their tax return and the government verifies the overpayment, the excess amount is refunded, typically via direct deposit to the taxpayer's bank account.

FAQ 1. Is pre-validating a bank account on the e-filing portal mandatory to claim a refund?

Yes, it is mandatory to pre-validate your bank account on the e-filing portal to claim a tax refund. This ensures that the bank account is active and owned by the taxpayer, which helps minimize errors and prevent fraud.
To pre-validate your bank account, follow these steps:

Go to Profile > My Bank Account > Add Bank Account.
Provide the required details and validate the account.

Upon successful submission, a validation request will be sent to the bank or NPCI. Once validated, you can nominate this account to receive your tax refund.

FAQ 2. ITR forms require details of the Legal Entity Identifier (LEI). What is it, and who needs to report it?

The Legal Entity Identifier (LEI) is a 20-character alphanumeric code used to uniquely identify parties in financial transactions worldwide. It enhances the quality and accuracy of financial data reporting systems, aiding in better risk management.

According to RBI regulations, all entities (non-individuals) must include the LEI information for single payment transactions of Rs. 50 crores and above through NEFT and RTGS. The new ITR forms have a designated column for the LEI details, which is mandatory for taxpayers claiming refunds of Rs. 50 crores or more.

FAQ 3. Can I claim the credit of tax deducted in advance on income that is taxable in subsequent years?

Under certain provisions, tax is deducted at source at the time of payment or credit, whichever is earlier, including advance payments. The ITR forms have a schedule for reporting tax deducted in previous years, allowing credit in future years. However, you cannot claim TDS credit for income that will be taxable in subsequent years. Such TDS credits can be carried forward and claimed in the year the income is taxed.

FAQ 4. I filed an income tax return to claim a tax refund, but it failed because I mentioned an incorrect bank account number. How can I submit the correct bank account number?

To submit the correct bank account number for a tax refund re-issue, follow these steps:

Log in to incometax.gov.in
Go to ‘Services’ and select ‘Refund Re-issue’.
Select ‘Create Refund Re-issue Request’.
Choose the record for which you want to submit a refund re-issue request.
Select the bank account where you want to receive the refund.
Click ‘Proceed to Verification’.

FAQ 5. What should I do in case of a TDS mismatch?

When filing your return, you may notice that the credit for Tax Deducted at Source (TDS) you claimed matches the balance shown in Form 26AS. However, the Assessing Officer (AO) might still issue a demand for the differential amount of TDS. The Central Board of Direct Taxes (CBDT[1]) has identified several common reasons for such discrepancies:

Incorrect or invalid TAN (Tax Deduction and Collection Account Number) of the deductor.
Using the same TAN for multiple deductors.
Providing details in incorrect TDS Schedules on the Return Form.
Entering wrong challan particulars regarding Advance tax, Self-assessment tax, etc.
Including TDS deducted by one entity under another deductor’s TDS amount.

Due to these errors, the tax credit may not be recognized during the return processing, even if the Form 26AS statement reflects the correct amount. Therefore, the CBDT advises taxpayers to verify whether the demand raised is due to a tax credit mismatch caused by such errors. If so, you need to submit a rectification request with accurate TDS or tax details to correct the discrepancies.

A. Submitting Rectification Requests

Rectification requests should be directed to your jurisdictional Assessing Officer if:

The return was processed by this officer, or
You have been notified by the Central Processing Centre (CPC) in Bengaluru that the jurisdictional Assessing Officer will handle the rectification.

For all other cases processed by the CPC in Bengaluru, you can make an online rectification request by following these steps:

B. Step-by-Step Guide for Online Rectification:

Step 1 – Log in to the e-filing portal.
Step 2 – Navigate to Services > Rectification.
Step 3 – Click New Request on the subsequent page.
Step 4 – Choose the relevant Assessment Year from the drop-down menu and click Continue.
Step 5 – On the next screen, select Tax Credit Mismatch Correction from the available rectification types, which include:

1. Reprocess the return
2. Tax credit mismatch correction
3. Additional information for 234C interest
4. Status Correction
5. Exemption section correction
6. Return data correction (Offline)
7. Return data correction (Online)

Step 6 – The schedules for the selected request type will be auto-populated based on records in the processed return. To modify or remove a schedule, select it and click Edit or Delete.
Step 7 – Enter the accurate details in the relevant schedules and click Continue to submit your request.

Upon submission, you will be directed to the verification page.

C. Additional Steps for TDS Return Errors

If the TDS mismatch results from an error in the TDS return filed by the deductor, you must contact the deductor to rectify the TDS return. This ensures that the correct details are reflected and the mismatch is resolved.

FAQ 6. How can you claim TDS credit in ITR if the deductor did not deposit TDS?

To claim TDS credit, a taxpayer should first approach the deductor and request them to deposit the TDS with the government and file a TDS statement. Unfortunately, the taxpayer has no legal authority to compel the deductor to do so. If the deductor refuses, the taxpayer can submit proof of TDS to the department.

Since ITR forms do not allow attachments, the taxpayer cannot directly submit supporting documents with the ITR for TDS claims. Therefore, it is advisable to file the ITR, claim TDS credit, and wait for processing. Once the ITR is processed, the taxpayer may receive a notice of a TDS mismatch.

Upon receiving such a notice, the taxpayer can respond with supporting documents to demonstrate that the TDS was indeed deducted. These documents can include salary slips and bank statements showing net salary or other income credited after TDS deductions. If the documents are verified and found to be correct, the Assessing Officer (AO) may allow the TDS credit and cancel any demand raised by the CPC. However, if the AO does not allow the TDS credit, the taxpayer’s only recourse is to approach the court.

It is important to reference Instruction No. 275/29/2014 dated 01-06-2015, which directs that under Section 205, an assessee should not be required to pay tax to the extent that tax has been deducted from their income where tax is deductible at source under Chapter XVII. Thus, the Act prohibits direct demand against the assessee in such cases, and any demand due to a tax credit mismatch cannot be enforced coercively. Assessing Officers should ensure that assessees are not inconvenienced due to the deductor’s failure to deposit tax.

Read More
Can I claim credit of TDS deducted by the employer but not paid by it to Govt.? on Taxmann.com/Practice

FAQ 7. I have a bank fixed deposit of Rs. 1,50,000. My total income (including accrued interest on FDs) is below the taxable limit. How can I avoid the deduction of tax on interest income?

You can avoid tax deduction on interest income by submitting a self-declaration to the bank. Senior citizens should file Form 15H, while others can file Form 15G.

FAQ 8. How can I avoid a tax deduction if I earn an interest income of Rs. 40,000 from savings deposits, and my total income, including such interest income, is below the taxable limit?

Tax is not deducted on interest payable on savings deposits. However, for interest on time deposits exceeding Rs. 40,000, tax will be deducted under Section 194A. To avoid TDS, you can submit a declaration under Section 197A using Form 15G or Form 15H, provided your relevant income does not exceed the maximum exemption limit and your estimated total income for the financial year is nil.

FAQ 9. My return has been processed, and it shows an ‘Outstanding Tax Demand’. What should I do now?

You can respond to the outstanding demand online through the e-filing portal. Follow these steps:

Log in to the e-filing portal.
Navigate to Pending Actions > Response to Outstanding Demand to view a list of outstanding demands. To pay, click ‘Pay Now’.
Click ‘Submit Response’ on the Response to Outstanding Amount page and proceed according to the situation:

- If the demand is correct and unpaid, select the relevant option, and you will be directed to the e-Pay tax page for payment. Successful payments will show a success message and a Transaction ID.
- If the demand is correct but already paid, add the challan details including Type of Payment, Challan Amount, BSR Code, Serial Number, and Date of Payment. Upload a copy of the challan and click Save. A success message and Transaction ID will be displayed upon validation.
- If you disagree with the demand (fully or partially), provide reasons for disagreement and confirm your submission. You will receive a success message and a Transaction ID.

Keep a record of the Transaction ID for future reference.

FAQ 10. The income-tax department has raised a demand against Mr A for the assessment year 2023-24. He did not pay the tax demand and filed an ITR for the next assessment year, claiming a refund. Can this refund be adjusted against his pending tax demand?

Yes, the CBDT has authorized the CPC to adjust tax demands against any refunds due to the assessee. Therefore, the refund claimed by Mr A for the next assessment year can be offset against the outstanding demand for the assessment year 2023-24.

FAQ 11. Should I pay a fee under Section 234F if there is a delay in filing my income tax return?

Under Section 234F, a fee is levied if the return of income is not filed by the due date specified in Section 139(1). The fee is Rs. 5,000 if filed after the due date, but if the total income does not exceed Rs. 5 lakhs, the fee is Rs. 1,000. This fee does not apply to taxpayers for whom filing a return is not mandatory and who are filing voluntarily.

Read More
Fee for default in furnishing return of income on Taxmann.com/Practice

FAQ 12. I am a non-resident filing an Income-tax return in India. I do not maintain a bank account in India. Can I receive my tax refund in a foreign bank account?

Yes, the income-tax department allows non-residents to receive tax refunds in a foreign bank account. When filing the ITR, non-residents should provide the following details:

SWIFT Code of the foreign bank account
Name of the bank
International Bank Account Number (IBAN)

[1] Press Note No. 402/92/2006, dated 17-04-2014,

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