Keeping in view the challenges faced by individual taxpayers in meeting the statutory and regulatory compliances owing to the current pandemic, the government has recently extended income tax return (ITR) filing deadline for FY2019-20 by a month till December 31. The due date of furnishing ITRs for taxpayers whose accounts need to be audited has also been extended till January 31, 2021.
If you haven’t filed your ITR yet, then you can relax a bit as the government has given you some more time to file your return. However, if you are still wondering how to file your ITR or if you have some queries related to tax return, you can refer to these FAQs on ITR filing, which will help resolve some of your queries.
1. What are the modes for filing of return of income?
Return of income can be filed in paper mode or e-filing mode. If the return of income is filed through electronic mode, then the assessee has the following three options:
(a) E-filing using a Digital Signature (DSC);
(b) E-filing without a Digital Signature; or
(c) E-filing under Electronic Verification Code (EVC).
If the return of income is filed using a DSC or under EVC, then there is no requirement of sending the signed copy, ITR-V (i.e., acknowledgement of return filed electronically) to Bangalore CPC. However, if the return is filed without using DSC or without EVC, the assessee shall send the signed copy of ITR V on the following address within 120 days of uploading the return either by ordinary post or by speed post only:
Income Tax Department – CPC, Post Bag No.-1, Electronic City Post Office, Bangalore -560100, Karnataka
2. When is it mandatory to file the return of income for an individual or HUF?
Income exceeding the threshold limit
If the income of an individual or HUF (resident or non-resident), before claiming the following deductions or exemptions, exceeds the maximum exemption limit, then him/it must file the return of income:
(a) Exemption under Section 10(38)6;
(b) Deduction under Section 10A,10B,10BA;
(c) Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB7; and
(d) Deduction under Section 80C to 80U.
Assets outside India
An individual, being a resident and ordinary resident in India, shall file his return of Income, even if his income does not exceed the maximum exemption limit, if he:
(a) Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India;
(b) Has signing authority in any account located outside India; and
(c) Is a beneficiary of any asset (including any financial interest in any entity) located outside India.
Seventh Proviso to Section 139(1)
Filing of return of income is mandatory irrespective of the amount of gross total income if an assessee’s case is covered by the seventh proviso to Section 139(1). This provision requires every person, who is otherwise not required to file the return due to the reason that his income does not exceed the maximum exemption limit, to file the return of income if during the previous year he has:
(a) deposited more than Rs 1 crore in one or more current account maintained with a bank or a co-operative bank;
(b) incurred more than Rs 2 lakh for himself or any other person for travel to a foreign country; or
(c) incurred more than Rs 1 lakh towards payment of electricity bill.
3. Whether individuals are required to mention details of assets and liabilities in ITR-1 (Sahaj)?
Individuals/HUFs are required to furnish details of assets and liabilities at year-end only when their taxable income exceeds Rs 50 lakh. The Schedule AL, wherein the details of assets and liabilities are to be furnished, is available only in ITR-2 and ITR-3. Thus, the individual or a HUF who has to report the details of assets and liabilities has to opt for filing of return in ITR-2 or ITR-3.
4. My income is Rs 60 lakh. What details about assets and liabilities do I need to mention in income-tax return?
Schedule AL requires individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs 50 lakh. If a taxpayer is required to provide information in this Schedule, he shall provide the details of cost of immovable property, jewellery, vehicles, shares, bank and cash balance, etc., at the year-end. Further, the taxpayer is also required to disclose the address of the immovable property and description of movable assets.
“If a taxpayer has acquired assets by way of gift, Will or any other mode specified under section 49(1) of the Income-tax Act, 1961, the asset shall be reported at the cost at which the previous owner has acquired it as increased by the cost of improvement incurred by such previous owner or by the taxpayer, as the case may be. If the cost of acquisition of the previous owner can’t be determined, the value may be estimated at the circle rate or market value of assets, as the case may be,” says CA Naveen Wadhwa, DGM, Taxmann.com.
5. Who are required to file return of income electronically?
For the Assessment Year 2020-21, every taxpayer has to file Income-tax return electronically except a super senior citizen (whose age is 80 years or above during the previous year 2019-20) who furnishes the return either in ITR-1 or ITR-4.
The various options for filing of a return have been enumerated below.