Advocate Narayan Jain has systematically analyzed the numerous income-tax return (ITR) forms issued by the CBDT for AY 2018-19 and explained the circumstances in which each has to be used. He has also elaborated on the documents that are required to accompany the returns. The consequences of not filing the returns within the prescribed due dates have also been explained in a clear manner
The Central Board of Direct Taxes has notified the ITR forms for the Assessment Year (AY) 2018-19. The Income Tax Returns are to be filed within due date specified under section 139(1) and if these are not filed within such date, it may entail Late Fee, as discussed in this article.
Due Date for Filing Income Tax Returns for FY 2017-18 (AY 2018-19):
The due date for filing Income Tax Returns for Financial Year 2017-2018 for Individuals and Hindu Undivided Family (HUF) and other taxpayers is as under :
a) Individual taxpayers having income from Salary, Business (cases, where tax audit is not required) or any other source : Due Date for Filing ITR is 31st July, 2018
b) Individuals and other taxpayers having Business income (cases, where tax audit is required) : 30th September, 2018
c) Businesses (Requiring Transfer Pricing Report) : 30th November, 2018
LATE FEE PAYABLE UNDER SECTION 234F FOR NOT FURNISHING THE RETURN WITHIN DUE DATE :
With effect from asst. year 2018-19, where an assessee fails to furnish his/ its return of income within due date but furnishes the same on or before 31stDecember of the assessment year, he shall be liable to pay Under section 234F a fee of Rs.5000/- and in case he furnishes the Return after 31stDecember, the fees shall be Rs.10,000/-. However if total income of assessee does not exceeds Rs.5 lakhs, the fee payable shall be limited to Rs 1,000. It is clarified that fee under section 234F shall be charged only where the assessee was obliged to file his Return of Income. So if your income is taxable [without claiming deduction under chapter VIA or section 10(38), 10A, 10B, 10BA] exceeds exemption limit, get ready to file your income tax return within 31st July, 2018 or the date as applicable in your case.
The ITR forms notified for the Assessment Year (AY) 2018-19 are as under:
Form No. ITR-1 or Sahaj
The return of income required to be furnished for assessment year 2018-19 (relating to the year ended 31st March,2018shall be in ITR Form 1 (Sahaj) in the case of a person beingan individual who is a residentwhere the total income includes income chargeable to income-tax, under the head, (i) “Salaries“or income from pension or family pension; or (ii) “Income from house property”, where assessee does not own more than one house property and does not have any brought forward lossor loss to be carried forwardunder the head house property; or (iii) “Income from other sources“, except winnings from lottery or income from race horses and does not have any loss under the head, shall be in Form SAHAJ (ITR-1). Further in a case where the income of minor, spouse etc. is to be clubbed with the income of the assessee, this ITR can be used if the income being clubbed falls into the aforesaid income categories.
The form ITR 1 now seeks additional details of salary. The taxpayer first needs to fill up salary amount excluding allowances, perquisites, and so on. Then, provide details pertaining to perquisites, allowances, ‘profit in lieu of salary’, etc. Up to last year, an assessee was required to mention only the taxable figure of salary. The same goes for income from house property. The form now requires the taxpayer to provide the break-up of gross rent received,taxpaid to local authorities, etc.
SAHAJ (ITR-1) shall not apply to a person who,—
(a)has agricultural income, exceeding Rs.5000;
(b)has total income, exceeding Rs.50 lakhs;
(c)has income taxable under section 115BBDA; or section 115BBE
(d) has assets (including financial interest in any entity) located outside India or has signing authority in any account located outside India;
(e) has income from any source outside India;
(f) has income to be apportioned between spouses governed by Portuguese Civil Code as per section 5A
(g) has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91;
Form No. ITR-2
ITR 2 shall apply in the case of an individual not being an individual to whom Form ITR 1 appliesor a Hindu undivided family where the total income does not include incomeunder the headbusiness or profession; The newly notified ITR-2 form is no longer applicable for individuals who have profits and gains from any business or profession. Such assessee now needs to use ITR-3 to file the return. Until last year, a partner was allowed to file the return using ITR-2.
In case of capital gains, the taxpayers now need to give specific details. The new ITR forms have specific columns to report each capital gain exemption separately. Details of each capital gains exemption under Sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F need to be reported in its applicable column now. A taxpayer availing these capital gains exemptions needs to mention the date of transfer of original capital asset which was missing in earlier ITR forms.
Form No. ITR-3
ITR 3 shall apply in the case of a person being an individual or a Hindu undivided family other than the individual or Hindu undivided family filing Return in ITR 1 or ITR 2 or ITR 4 andhaving income under the headbusiness or profession, be inForm No.ITR-3;
Form No. ITR-4 (Sugam)
ITR-4 shall apply in the case of a person being an individual or a Hindu undivided familyor a firm (other than a limited liability partnership firm),deriving “income under the head Profits or gains of business or profession” and such income is computed in accordance with special provisions of presumptive income referred to in section 44AD, section 44ADA and section 44AE for computation of such income. ITR 4 seeks more disclosure:The presumptive taxation scheme – meant for small businesses such as shop owners and for professionals such as doctors – does not require the taxpayer to maintain books of account or get their financials audited. The assessees can pay a percentage of their total turnover as the tax. The old ITR-4 sought only four details — total creditors and debtors, total stock-in-trade, and cash balance as on the year end. But the new form asks for more financial details of the business such as the amount of secured and unsecured loans, advances, fixed assets, capital account and so on. The details sought essentially requires the person to maintain balance sheet to report the information asked.
It may be noted that now, there is an additional requirement to quote GSTR No. and turnover/gross receipts as per GST return filed. Further, fields have been added under Financial particulars where now an assessee has to declare the additional information with regard to Partners/ Members Capital, Secured Loan, Unsecured Loan, Advances as well as details of Fixed Assets.
Who cannot use ITR-4 (Sugam) : A person who,—
a) has income from more than one house property or where there is a brought forward loos or loss to be carried forward under the head house property
b) has income from winnings from lottery or income from race horses
c) has income under the head capital gains
d) income from speculative business or other special income
e) income from an agency business or income from Commission or brokerage
f) has agricultural income, exceeding Rs.5,000
g) has income taxable under section 115BBDA; or section 115BBE;
h) has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91;
i) having any asset (including financial interest in any entity) located outside India; or signing authority in any account located outside India; or income from any source outside India;
Form No. ITR-5
ITR-5 shall apply in the case of Partnership Firm, AOP, BOI and a person other than an individual, Hindu undivided family or a Company or a person (Trust, Society, Institution etc.) filing form ITR 7.
Form No. ITR-6
ITR-6 shall apply in the case of a Company [other than a company claiming exemption under section 11 and those filing form ITR 7].
Form No. ITR-7
ITR-7 shall apply in the case of person including a company required to furnish Return under sections 139(4A) to 139(4F) or a company whether or not registered under section 25 of the Companies Act, 1956
Certain Audit Reports to be filed electronically
Where an assessee is required to furnish a report of audit specified under any provision of the Income tax Act, it shall be furnished electronically.
Some ITRs not to be accompanied by any documents;
The return of income required to be furnished in Form SAHAJ (ITR-1) or Form No. ITR-2 or Form No. ITR-3 orForm SUGAM (ITR-4)or Form No. ITR-5 or Form No. ITR-6 or Form No. ITR-7 shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or any other report of audit required to be attached with the return of income under any of the provisions of the Income Tax Act.
Electronic filing of ITR :
All taxpayers are eligible to e-file the Income Tax Returns. However Company, Firm or LLP and other taxpayers whose accounts are required to be tax audited under sec. 44AB, political parties, taxpayers having total income Exceeding Rs. 5 Lakhs and charitable trusts, Societies and Institutions having gross income exceeding exemption limit and other specified taxpayers required to furnish their return of income electronically. There has been no change in the manner of filing your returns. All returns will be filed electronically with the only exception being for the following taxpayers filing ITR – 1 or ITR -4 who can go ahead filing a paper return. a) An Individual of the age of 80 years or more at any time during the previous year; or b) An individual or HUF whose income does not exceed Rs. 5 lakh and who has not claimed any refund in the Return of Income.
Taxation of Employee Stock Options :
The government had made changes to the taxation of employee stock option plan in an unlisted shares of a company in the previous year’s Budget. The amendments are applicable from assessment year 2018-19. The new provisions state that if unlisted shares are transferred at a price which is lower than its fair market value (FMV), it would still be taxed at the FMV that a merchant banker or a chartered accountant calculates as per Rules. While filing the return, employees will need to obtain valuation report in case of sale of unlisted shares to ensure that they correctly report the capital gains or loss. TheITR formalso asks for the detailed break-up of such transaction.
It is apparent that the new ITR forms have shifted the entire onus on the taxpayers to prove their claim for deductions, expenses or exemptions.
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