Income Tax Return

What is Income Tax Return:

An Income tax return is a return form which is used to file information about your income and taxes to the Income Tax Department. The tax liability of a assessee is calculated based on his income. In case the return shows that excess tax has been paid in the form of Advance Tax or TDS during a year, then the individual will be eligible to receive a income tax refund from the Income Tax Department.

As per section 139 of the Income Tax Act, 1961, the return must be filed every year by an individual or business that earns any income during a financial year. The income could be in the form of a Salary, Income from letting out of house property, business / professional income, or earned through dividends, capital gains, interests or other sources.

Income Tax return have to be filed by an individual before a specified due date. If a taxpayer fails to abide by the deadline, he has to pay the penalty.

Who is required to file Income Tax Return:

As per Income Tax Act, It is mandatory to file Income Tax Return in any of the below situation:

  1. Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs 2.5 lakhs in FY 2018-19. This limit is Rs 3 lakh for senior citizens (aged above 60 but less than 80) or Rs 5 lakhs for super senior citizens (aged above 80).
  2. You are a company or a firm irrespective of whether you have income or loss during the financial year.
  3. If you want to get Income Tax Refund.
  4. If you want to carry forward a loss under any head of income.
  5. Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs).
  6. If you are a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs).
  7. You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.
  8. If you are a foreign company taking treaty benefit on a transaction in India.
  9. A proof of return filing may also be required at the time of applying for a loan or a visa.

Penalties for non-filing of ITR:

Under section 271F, the Assessing Officer may levy a penalty of Rs 5,000 when you have not filed your return. (applicable until F.Y. 2016-17).

From F.Y. 2017-18 onwards, penalties for non-filing an ITR are as follows:

a. A penalty of Rs 5,000 is applicable if the return for F.Y. 2018-19 is filed after the due date (31 August 2019) but by 31 December 2019.

b. A penalty of Rs 10,000 is applicable if the return for F.Y. 2018-19 is filed after 31 December 2019 but by 31 March 2020.

Note: Penalty is limited to Rs 1,000 for those with income up to Rs 5 lakhs. These provisions are covered under a new Section 234F.

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