Important tax return filing provisions every taxpayer must know

Friends, we are again in the midst of the tax return filing season and most of you, if salaried, must also have received the Form 16 document in your mailbox. Though filing of income tax return is now much simpler, with the online tax filing websites,  filing on time is only half the job done. A more important point is to file a “correct return” i.e. after disclosing income from all sources, matching tax credit against Form 26AS, paying self assessment tax, if applicable etc.

Hence, here I am listing down provisions under the Income Tax Act which you should know, to file a timely and correct return.

(A)   Return not filed/ filed after due date (Belated Return)

You have to file the return by due date u/s 139(1) of Income Tax Act which is July 31 for salaried assesses.  If you miss that date, you can still file the return but latest by one year from the end of assessment year or before completion of assessment whichever is earlier – known as “belated return”.

Example: For the previous year 2013-14, due date for filing the return is July 31, 2014. However, you can file a belated return latest by March 31, 2016, not after that.

Are you pleased that you got this extended timeline? Don’t be, for there are consequences if you miss the July 31 timeline:

a)      Penal Interest under Section 234A: This means, that if any self assessment tax was “payable” from your end for the year, eff. August 1, 2014 to the date when you actually pay up the tax, you will be charged interest @1% per month (or part of the month)

b)      Following losses will NOT be available for carry forward with and set off against income in subsequent years:

• Business loss (speculative or otherwise)
• Capital Loss
• Loss from the activity of owning and maintaining race horses

c)       You will not be able to avail deductions u/s 10A, 10B, 80-IA, 80IAB,  80IB, 80-IC, 80-ID, 80-IE.

d)      Penalty of Rs. 5,000may be imposed at by AO if the return is filed after the end of assessment year (w.r.t  above example, if the return is filed after March 31, 2015)

e)      No possibility of revising a belated return, if it had any error/omission [Kumar Jagdish Chandra Sinha vs CIT [1996] 86 Taxman 122 (SC)]

(B)   Error/ Omission discovered by “assessee” in the return (Revised Return)

When you file a return on time, you may discover later that there was an error/ omission in that. In that case, you have an option to file another return which will qualify as “revised return” u/s 139(5) of the Act. Provisions on “revised return” are as follows:

a)      Can be filed only if it was a bona fide error/ mistake from assessee. For e.g. if after getting a notice from department, you revise the return to cover yourself up, it will not be considered.

b)      Time limit is one year from the end of assessment year or before completion of assessment. So, for example given above, it is till March 31, 2016 or before assessment completion, whichever is earlier.

c)       You can revise even a revised return, any number of times.

d)      Assessee has a right given under the Act to revise his return: there is no permission required from the department (as held in CIT [1952] 22 ITR 339 (Nag.)]

(C)   Error/ Omission discovered by the “Assessing Officer” in the return (Defective Return)

Where error/ omission is discovered by the AO, it is covered u/s 139(9) of the Act. Provisions of this section are as follows:

a)      Return can be treated as defective in the following cases:

• If the return form has not been duly filled up
• Annexures/ statements are not attached (note: in e-filing, since this is not possible, you should maintain a proper record at your end and produce to AO if required)
• Non-payment of self-assessment tax on or before filing the return

b)      AO has to give a notice to the assessee of atleast 15 days to rectify the return.

c)       If defect is not rectified, return will be treated as “invalid return” and as good as “not filed”.  All provisions as in case of non-filing of return will be applicable in such case.

Hopefully, this article has given you some clarity on the applicable income tax provisions and will help you in filing your tax return, in a timely and correct manner.

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