Master Guide on filing of income Tax Return for A.Y. 2017-18
Q.1 What is a return of income?
Ans: It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income. These forms can be downloaded from www.incometaxindia.gov.in
Q.2 What are the forms of return prescribed under the Income-tax Law?
Ans: Under the Income-tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms). The forms of return prescribed under the Income-tax Law for filing of return of income for the assessment year 2017-18 (i.e., financial year 2016-17) are as follows:
| Return Form | Brief Description |
| ITR – 1 | Also known as SAHAJ is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses, income taxable under section 115BBDA or income reffered in section 115BBDA). |
| ITR – 2 | It is applicable to an individual or an Hindu Undivided Family who is not eligible to file Sahaj ITR-1 and whose income chargeable to income-tax under the head "Profits or gains of business or profession" is in the nature of interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from a partnership firm. |
| ITR – 3 | It is applicable to an individual or a Hindu Undivided Family who is carrying on a proprietory business or profession. |
| ITR – 4 | Also known as SUGAM is applicable to individuals or Hindu Undivided Family or partnership firm (other than limited liability partnership firm) who have opted for the presumptive taxation scheme of section 44AD/ 44ADA/44AE. |
| ITR – 5 |
This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or section 139(4E) or section 139(4F) shall not use this form (i.e., trusts, political parties, institutions, colleges, investment fund etc.)
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| ITR – 6 | It is applicable to a company, other than a company claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust). |
| ITR – 7 | It is applicable to a persons including companies who are required to furnish return under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or section 139(4E) orsection 139(4F) (i.e., trusts, political parties, institutions, colleges, investment fund, etc.). |
| ITR – V | It is the acknowledgement of filing the return of income. |
Q.3 What are the different modes of filing the return of income?
Ans: he Return Form can be filed with the Income-tax Department in any of the following ways, –
(i) by furnishing the return in a paper form;
(ii) by furnishing the return electronically under digital signature;
(iii) by transmitting the data in the return electronically under electronic verification code;
(iv) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;
Note
Where the return of income is filed in the manner given at (iv) without digital signature, then the taxpayer should take two printed copies of Form ITR-V. One copy of ITR-V, duly signed by the taxpayer, is to be sent (within the period specified in this regard, i.e., 120 days) by ordinary post or speed post to "Income-tax Department – CPC, Post Bag No. 1, Electronic City Post Office, Bengalore-560100 (Karnataka). The other copy may be retained by the taxpayer for his record.
Q.4 Which mode of filing of return is applicable to whom? what is the mode of submission of income tax return ?
Ans: The applicable return of income shall be furnished by a person mentioned in column (ii) of the Table below to whom the conditions specified in column (iii) apply, in the manner specified in column (iv) thereof:—
TABLE
| Sl. | Person | Condition | Manner of furnishing return of income | ||||||||||||||||||||||||
| (i) | (ii) | (iii) | (iv) | ||||||||||||||||||||||||
| 1 | Individual or Hindu undivided family |
| Electronically under digital signature; | ||||||||||||||||||||||||
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| 2 | Company | In all cases. | Electronically under digital signature. | ||||||||||||||||||||||||
| 3 | A person required to furnish the return inForm ITR-7 |
| Electronically under digital signature; | ||||||||||||||||||||||||
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| 4 | Firm or limited liability partnership or any person (other than a person mentioned in Sl. 1 to 3 above) who is required to file return in Form ITR-5 |
| Electronically under digital signature; | ||||||||||||||||||||||||
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Q.5 Is it necessary to attach any documents along with the return of income?
Ans: ITR return forms are attachment less forms and, hence, the taxpayer is not required to attach any document (like proof of investment, TDS certificates, etc.) along with the return of income (whether filed manually or filed electronically). However, these documents should be retained by the taxpayer and should be produced before the tax authorities when demanded in situations like assessment, inquiry, etc.
As discussed above, no documents are to be attached along with the return of income, however, in case of a taxpayer who is required to furnish a report of audit under section 10(23C)(iv), 10(23C)(v), 10(23C)(vi),10(23C)via), 10A, 10AA, 12A(1)(b), 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115VW or to give a notice under section 11(2)(a) shall furnish it electronically on or before the date of filing the return of income.
Q.6 Who can use ITR – 1 (SAHAJ)?
Ans: Return Form ITR – 1 (SAHAJ) can be used by an individual whose total income includes:
(1) Income from salary/pension; or
(2) Income from one house property (excluding cases where loss is brought forward from previous years); or
(3) Income from other sources (excluding winnings from lottery and income from race horses, income taxable under section 115BBDA or Income of the nature referred to in section 115BBE).
Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used only when such income falls in any of the above categories.
| ITR | Description |
| ITR 1 (SAHAJ) | For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh |
Q.7 Who cannot use ITR – 1 (SAHAJ)?
Ans: Return Form ITR – 1 (SAHAJ) cannot be used by an individual:
- Whose total income for the Assessment year 2017-18 exceeds Rs. 50 lakh;
- Whose total income for the year includes income from more than one house property.
- Whose total income for the year includes income from winnings from lottery or income from race horses or income taxable under section 115BBDA.
- Whose total income for the year includes income chargeable to tax under the head "Capital Gains".
- Whose total income for the year includes income of the nature refferred to in section 115BBE.
- Whose total income for the year includes agricultural income of more than Rs. 5,000.
- Whose total income for the year includes income from business or profession.
- Whose total income for the year includes loss under the head "Income from other sources".
- Who has claimed relief under section 90 and/or 91.
- Any Resident having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.
- Any resident having income from any source outside India.
Q.8 Who can use ITR – 2?
Ans: ITR 2 is to be used by an individual or an Hindu Undivided Family who is not eligible to file Sahaj ITR-1 and whose income chargeable to income-tax under the head "Profits or gains of business or profession" is in the nature of interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from a partnership firm.
Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this Return Form can be used if income to be clubbed falls in any of the above categories.
ITR 2 For Individuals and HUFs not carrying out business or profession under any proprietorship
Q.9 Who cannot use ITR – 2?
Ans: Return Form ITR – 2 cannot be used by an individual whose total income for the year includes income from Business or Profession under any proprietorship.
Q.10 Who can use ITR – 3?
Ans: Form ITR – 3 can be used by an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.
Q.11 Who cannot use ITR – 3?
Ans: Form ITR – 3 cannot be used by any person other than an individual or a HUF. Further, an individual or a HUF not having income from business or profession cannot use ITR – 3.
Q.12 Who can use ITR – 4 (SUGAM)?
Ans: Form ITR – 4 (SUGAM) can be used by an Individual/HUF/Firm (Other than LLP) whose total income for the year includes:
(a) Business income computed as per the provisions of section 44AD or 44AE; or;
(b) Income from Profession as computed as per the provisions of 44ADA; or
(c) Income from salary/pension; or
(d) Income from one house property (excluding cases where loss is brought forward from previous years); or
(e) Income from other sources (excluding winnings from lottery and income from race horses).
Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this return form can be used where income to be clubbed falls in any of the above categories.
Q.13 Who cannot use ITR – 4 (SUGAM)?
Ans: Form ITR – 4 (SUGAM) cannot be used by an individual/HUF:
- Whose total income for the year includes income from more than one house property.
- Whose total income for the year includes income from winnings from lottery or income from race horses.
- Whose total income for the year includes income chargeable to tax under the head "Capital Gains".
- Whose total Income for the year includes income taxable under section 115BBDA.
- Whose total income for the year includes income of the nature referred to in section 115BBE.
- Any resident having income from any source outside India.
- Whose total income for the year includes agricultural income of more than Rs. 5,000.
- Whose total income for the year includes income from speculative business and other special incomes.
- Whose total income for the year includes income from agency business or income in the nature of commission or brokerage.
- Who claims relief under section 90, 90Aand/or section 91
- Who is a resident and ordinarily resident and has any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India.
In case of a taxpayer who is engaged in any business eligible for the presumptive taxation scheme of section 44AD or section 44AE or section 44ADA but he does not opt for the presumptive taxation scheme, then such a taxpayer has to maintain the books of account of the business as per the provisions of section 44AA and has to get these accounts audited. In such a case he cannot use ITR 4.
Q.14 Who can use ITR – 5?
Ans: Form ITR – 5 can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person , cooperative society and local authority.
Q.15 Who cannot use ITR – 5?
Ans: Form ITR – 5 cannot be used by, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political party, institutions, colleges, investment fund, etc.).
Q.16 Who can use ITR – 6?
Ans: Form ITR – 6 can be used by a company, other than a company claiming exemption under section 11 (charitable/religious trust can claim exemption under section 11).
Q.17 Who cannot use ITR – 6?
Ans: Form ITR – 6 cannot be used by a company claiming exemption under section 11 (charitable/religious trust can claim exemption under section 11).
Q.18 Who can use ITR – 7?
Ans: Form ITR – 7 can be used by persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4f) (i.e., trusts, political party, institutions, colleges, investment fund, etc.).
Q.19 Who cannot use ITR – 7?
Ans: Form ITR – 7 cannot be used by a person who is not required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political party, institutions, colleges, investment fund, etc.).
Q.20 How to file the return of income electronically?
Ans: Income-tax Department has established an independent portal for e-filing of return of income. The taxpayers can log on to www.incometaxindiaefiling.gov.in for e-filing the return of income.
Q.21 What is e-filing utility provided by the Income-tax Department?
Ans: The Income-tax Department has provided free e-filing utility (i.e., software) to generate e-return and furnishing of return electronically. The e-filing utility provided by Department is simple, easy to use and also contains instructions on how to use it. By using the e-filing utility, the taxpayers can easily file their returns of income. Utility can be downloaded from www.incometaxindiaefiling.gov.in
Q.22 Is there any e-filing help desk established by the Income-tax Department?
Ans: In case of queries on e-filing of return, the taxpayer can contact 1800 4250 0025.
Q.23 What is the difference between e-filing and e-payment?
Ans: E-payment is the process of electronic payment of tax (i.e., by net banking or SBI's debit/credit card) and e-filing is the process of electronically furnishing of return of income. Using the e-payment and e-filing facility, the taxpayer can discharge his obligations of payment of tax and furnishing of return easily and quickly.
Q.24 Will I be put to any disadvantage by filing my return?
Ans: No, on the contrary by not filing your return inspite of having taxable income, you will be liable to the penalty and prosecution provisions under the Income-tax Act.
Q.25 What are the benefits of filing my return of income?
Ans: Filing of return is your duty and earns for you the dignity of consciously contributing to the development of the nation. Apart from this, your income-tax returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits, etc.
Q.26 What are the benefits of e-filing the return of income?
Ans: E-filing can be done from any place at any time and it saves time and efforts. It is simple, easy and faster. The e-filed returns are generally processed faster as compared to returns filed manually.
Q.27 Is it necessary to file return of income when I do not have any positive income?
Ans: If you have sustained a loss in the financial year, which you propose to carry forward to the subsequent year for adjustment against subsequent year(s) positive income, you must make a claim of loss by filing your return before the due date.
Q.28 What are the due dates for filing returns of income/loss?
Ans: Due date of filing of return of income
| Sr. No. | Status of the taxpayer | Due date |
| 1 | Any company other than a company who is required to furnish a report in Form No. 3CEB under section 92E (i.e. other than covered in 2 below) | September 30 of the assessment year |
| 2 | Any person (may be corporate/non-corporate) who is required to furnish a report in Form No. 3CEB under section 92E | November 30 of the assessment year |
| 3 | Any person (other than a company) whose accounts are to be audited under the Income-tax Law or under any other law | September 30 of the assessment year |
| 4 | A working partner of a firm whose accounts are required to be audited under this Act or under any other law. | September 30 of the assessment year |
| 5 | Any other assessee (See Note) | July 31 of the assessment year . |
Note : The due date for e-filing of tax-return had been extended to August 05 for the Assessment Year 2017-18 vide Order No. F. No. 225/270/2017/ITA.II
Q.29 If I fail to furnish my return within the due date, will I be fined or penalized?
Ans: Yes, if you have not furnished the return within the due date, you will have to pay interest on tax due. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F. [No penalty section 271F would be levied w.e.f. Assessment Year 2018-19]
Note: W.e.f. assessment year 2018-19, fee as per section 234F is required to be paid if return is furnished after due date. Fee for default in furnishing return of income will be as follows:
i. Rs. 5000 if return is furnished on or before the 31st day of December of the assessment year;
ii. Rs. 10,000 in any other case
However, late filing fee shall not exceed Rs. 1000 if the total income of an assessee does not exceed Rs. 5 lakh.
Q.30 Can a return be filed after the due date?
Ans: Yes, if one could not file the return of income on or before the prescribed due date, then he can file a belated return. A belated return can be filed at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. A belated return attracts interest and penalty .
E.g., In case of income earned during FY 2016-17, the belated return can be filed up to 31st March, 2018.
Q.31 If I have paid excess tax how will it be refunded to me?
Ans: The excess tax can be claimed as refund by filing your Income-tax return. It will be refunded to you by crediting it in your bank account through ECS transfer. The department has been making efforts to settle refund claims at the earliest.
Q.32 If I have committed any mistake in my original return, am I permitted to file a revised return to correct the mistake? What is time limit for furnishing the revised return? I have filed my original return after due date. Can I file my revised return ? What is last date of revision of Return of income?
Ans: Original return can be revised under section 139(5) within a period of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier if person furnished original return on or before the due (till assessment year 2016-17). In assessment year 2017-18, any original return (which is furnished on or before or after due date) can be revised within a period of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier.
From the assessment year 2018-19 return of income can be revised (original return is filed on or before due date of after due date) at any time during the assessment year or before the assessment made whichever is earlier.
If original return has filed in paper format or manually, then technically it cannot be revised by online mode or electronically.
If a person is furnished original return and finds any mistake, omission or any wrong statement, then return should revised within prescribed time lim
Q.33 How many times can I revise the return? I have revised my ITR, but still there is mistake. Can I revised my return once again? Can return of income revised more than one times? What is time limit for furnishing the revised return? I have filed my original return after due date. Can I file my revised return Can belated return be revised? Under which section return of Income is revised? I have forgotten to claim TDS amount. Can I claim TDS amount in revised return? I have filed my original return manually (in paper format). Can I revised return of income by on line mode? When should a original return to be revised? What is the time limit for filing the revised return? If original return has filed in paper format or manually, then technically it cannot be revised by online mode or electronically.
Ans: If a person is furnished original return and finds any mistake, omission or any wrong statement, then return should revised within prescribed time limit.
Q.34 Am I required to keep a copy of the return filed as proof and for how long?
Ans: Yes, since legal proceedings under the Income-tax Act can be initiated up to four or six years (as the case may be) prior to the current financial year, you must maintain such documents at least for this period. However, in certain cases the proceedings can be initiated even after 6 years, hence, it is advised to preserve the copy of return as long as possible. Further, after introduction of the e-filing facility, it is very easy and simple to maintain the copy of return of income.
Q.35 There are various deductions that are not reflected in the Form 16 issued by my employer. Can I claim them in my return?
Ans: Yes, it can be claimed if you are otherwise eligible to claim the same.
Q.36 Why is return filing mandatory, even though all my taxes and interests have been paid and there is no refund due to me?
Ans: Amounts paid as advance tax and withheld in the form of TDS or collected in the form of TCS will take the character of your tax due only on completion of self-assessment of your income. This self-assessment is intimated to the Department by way of filing of the return of income. Only then the Government assumes rights over the taxes paid by you. Filing of return is critical for this process and, hence, has been made mandatory. Failure will attract levy of penalty.
Q.37 Am I liable for any criminal prosecution [arrest/imprisonment, etc.] if I don't file my Income-tax return, even though my income is taxable?
Ans: Non-payment of tax attracts interests, penalty and prosecution. The prosecution can lead to rigorous imprisonment from 3 months to 2 years (when the tax sought to be evaded exceeds Rs. 25,00,000 the punishment could be 6 months to 7 years).
Q.38 What is Form 26AS?
Ans: A taxpayer may pay tax in any of the following forms:
(1) Tax Deducted at Source (TDS)
(2) Tax Collected at Source (TCS)
(3) Advance tax or Self-assessment Tax or Payment of tax on regular assessment.
The Income-tax Department maintains the database of the total tax paid by the taxpayer (i.e., tax credit in the account of a taxpayer). Form 26AS is an annual statement maintained under Rule 31AB of the Income-tax Rules disclosing the details of tax credit in his account as per the database of Income-tax Department. In other words, Form 26AS will reflect the details of tax credit appearing in the Permanent Account Number of the taxpayer as per the database of the Income-tax Department. The tax credit will cover TDS, TCS and tax paid by the taxpayer in other forms like advance tax, Self-Assessment tax, etc.
Income-tax Department will generally allow a taxpayer to claim the credit of taxes as reflected in his Form 26AS.
Q.39 What to do if discrepancies appear in actual TDS and TDS credit as per Form 26AS? What to do if tax deducted by bank is not reflect on 26AS? What to do if tax has been deducted by deductor, but not deposit to the Government account? What to do if tax is deducted by deductor, but same is not reflecting in 26 AS of deductee?
Ans: Every person deducting tax at source has to furnish the details of tax deducted by him to the Income-tax Department. The details will cover the name of the deductee, Permanent Account Number of the deductee, amount of tax deducted, amount paid to the deductee, date of payment of TDS to the credit of Government, etc. On the basis of the details of TDS provided by the deductor, the Income-tax Department will update Form 26AS of the deductee.
Many times the actual amount of TDS and TDS credit as appearing in Form 26AS may differ and it may happen that the TDS credit appearing in Form 26AS may be less as compared to actual TDS, this may happen due to reasons like non-furnishing of TDS details to the Income-tax Department by the deductor, deducting the tax in incorrect Permanent Account Number, etc. In such a case the deductee should approach the deductor and request him to take the necessary steps to rectify the discrepancy due to above reasons.
The Income-tax Department updates the TDS details in Form 26AS on basis of details provided by the person deducting the tax (i.e., the deductor), hence, if there is any default on the part of deductor like non -furnishing of TDS details (i.e., TDS return) to the Income-tax Department, deducting the tax in incorrect Permanents Account Number, etc. then Form 26AS will not reflect the actual TDS. In such a case, the taxpayer may not be able to claim the credit of correct TDS. Hence, the taxpayers are advised to confirm the tax credit appearing in Form 26AS and should reconcile the difference, if any.
If discrepancy is due to deductor , then he may file TDS/TCS correction statement and correct the same.
Q.40 What precautions should be taken while filing the return of income?
Ans: Following is the list of few important steps/points/precautions to be kept in mind while filing the return of income:
- The first and foremost precaution is to file the return of income on or before the due date. Taxpayers should avoid the practice of filing belated return. Following are the consequences of delay in filing the return of income :
- Loss (other than house property loss) cannot be carried forward.
- Levy of interest under section 234A.
- Penalty of Rs. 5,000 under section 271F can be levied. [upto Assessment Year 2017-18]
- Fee or Rs 5000 under section 234F will be levied if return is furnished on or before 31st December of Assessment Year fee will be Rs. 10,000 in any other case. [Fee shall be levied @ Rs 1000 if total income does not exceed Rs. 5,00,000]
- Exemptions/deductions under section 10A, section 10B, 80-IA, 80-IAB, 80-IB, 80-IC , 80-ID and 80-IE are not available.
- Belated return cannot be revised under section 139(5). However, w.e.f. 01-04-2017, income-tax return for the Assessment Year 2017-18 and onwards filed under section 139(1) or section 139(4) [belated return' can also be revised.
- Taxpayer should download Form 26AS and should confirm actual TDS/TCS/Tax paid. If any discrepancy is observed then suitable action should be taken to reconcile it.
- Compile and carefully study the documents to be used while filing the return of income like bank statement/passbook, interest certificate, investment proofs for which deductions is to be claimed, books of account and balance sheet and P/L A/c (if applicable), etc. No documents are to be attached along with the return of income.
- The taxpayer should identify the correct return form applicable in his case.
- Carefully provide all the information in the return form.
- Confirm the calculation of total income, deductions (if any), interest (if any), tax liability/refund, etc.
- If any tax is payable as per the return of income, then the same should be paid before filing the return of income, otherwise return would be treated as defective return.
- Ensure that other details like PAN, address, e-mail address, bank account details, etc., are correct.
- After filling all the details in the return of income and after confirmation of all the details, one can proceed with filing the return of income.
- In case return is filed electronically without digital signature and without electronic verification code do not forget to post the acknowledgement of filing the return of income at CPC Bangalore (as discussed earlier).
For details on e-filing please logon to www.incometaxindiaefiling.gov.in
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