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Mandatory Filing of Return as per Finance Bill 2019

Finance bill 2019 made return filing mandatory in certain circumstances

(To be Applicable from Assessment Year 2020-21)

As per current provisions, if income of an individual or assessee exceeds the maximum exemption limit then it is mandatory for him to file the return of income. Even if income of an Individual (a resident and ordinary resident in India) does not exceed the maximum exemption limit, it is mandatory for him to file the return if he holds, as a beneficial owner or otherwise, any asset or financial interest outside India.

In order to ensure that individuals, entering into certain high value transactions, furnish the In-come-tax return, it is proposed to amend section 139 so as to provide that a person shall be mandatorily required to file his return of income, if during the previous year:

  1. He has deposited an amount (or aggregate of amount) in excess of Rs. 1 crore in one or more current account maintained with a bank or a co-operative bank
  2. He has incurred expenditure in excess of Rs. 2 lakh for himself or any other person for travel to a foreign country
  3. He has incurred expenditure in excess of Rs. 1 lakh towards payment of electricity bill.
  4. He fulfils such other conditions as may be prescribed.

Further, filing of Income-tax return is proposed to be made mandatory, if total income of an as-sessee before claiming capital gain exemption under Sections 54, 54B, 54EC, 54F, 54G, 54GA and 54GB, exceeds the maximum amount not chargeable to tax.

Non-filing of Income-tax returns results in prosecution under Section 276CC if tax payable by a taxpayer is more than Rs. 3,000. This threshold limit is proposed to be increased from existing Rs. 3,000 to Rs. 10,000.

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