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COMPULSORY FILING OF RETURN OF INCOME [SECTION 139(1)]

COMPULSORY FILING OF RETURN OF INCOME

As per section 139(1), it is compulsory for companies and firms to file a return of income or loss for every previous year on or before the due date in the prescribed form.

In case of a person other than a company or a firm, filing of return of income on or before the due date is mandatory, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeds the basic exemption limit.

Every person, being a resident other than not ordinarily resident in India within the meaning of section 6(6), who is not required to furnish a return under section 139(1), would be required to file a return of income or loss for the previous year in the prescribed form and verified in the prescribed manner on or before the due date, if such person, at any time during the previous year, –

  1. holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has a signing authority in any account located outside India; or
  2. is a beneficiary of any asset (including any financial interest in any entity) located outside India.

However, an individual being a beneficiary of any asset (including any financial interest in any entity) located outside India would not be required to file return of income under the fourth proviso to section 139(1), where, income, if any, arising from such asset is includible in the income of the person referred to in (a) above in accordance with the provisions of the Income-tax Act, 1961.

All such persons mentioned in above should, on or before the due date, furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.

Requirement of filing of return of income as per the fourth and fifth proviso to section 139(1)

Further, every person, being an individual or a HUF or an AOP or BOI or an artificial juridical person –

  • whose total income or the total income of any other person in respect of which he is assessable under this Act during the previous year
  • without giving effect to the provisions of Chapter VI-A
  • exceeded the basic exemption limit.

is required to file a return of his income or income of such other person on or before the due date in the prescribed form and manner and setting forth the prescribed particulars.

The basic exemption limit is Rs. 2,50,000 for individuals/HUF/AOPs/BOIs and artificial juridical persons, Rs. 3,00,000 for resident individuals of the age of 60 years but less than 80 years and Rs.5,00,000 for resident individuals of the age of 80 years or more at any time during the previous year. These amounts denote the level of total income, which is arrived at after claiming the admissible deductions under Chapter VI-A. However, the level of total income to be considered for the purpose of filing return of income is the income before claiming the admissible deductions under Chapter VI-A.

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