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Return of Income and Self-Assessment Notes

Provisions for filing Return of Income and Self-assessment

Section 139(1)

Assessees required to file return of income compulsorily

  1. Companies and firms (whether having profit or loss or nil income);
  2. a person, being a resident other than not ordinarily resident, having any asset (including any financial interest in any entity) located outside India held as a beneficial owner or beneficiary or who has a signing authority in any account located outside India, whether or not having income chargeable to tax;
  3. Individuals, HUF, AOPs or BOIs and artificial juridical persons whose total income before giving effect to the provisions of Chapter VI-A and sections 54, 54B, 54D, 54EC or 54F exceeds the basic exemption limit.
  4. Any person who during the previous year –
    • has deposited more than Rs. 1 crore in one or more current accounts maintained with a banking company or a co-operative bank
    • has incurred expenditure of more than Rs.  2 lakh for himself or any other person for travel to a foreign country;
    • has incurred expenditure of more than Rs. 1 lakh towards consumption of electricity
    • fulfils such other conditions as may be prescribed

Due date of filing return of income

31st October of the assessment year, in case the assessee is:

  1. a company;
  2. a person (other than company) whose accounts are required to be audited; or
  3. a partner of a firm whose accounts are required to be audited.

31st July of the assessment year, in case of any other assessee (other than assessees who are required to furnish report under section 92E, for whom the due date is 30th November of the assessment year).

Section 234A: Interest for default in furnishing return of income

Interest under section 234A is payable where an assessee furnishes the return of income after the due date or does not furnish the return of income.

Assessee shall be liable to pay simple interest @1% per month or part of the month for the period commencing from the date immediately following the due date and ending on the following dates –

Circumstances Ending on the following dates
Where the return is furnished after due date the date of furnishing of the return
Where no return is furnished the date of completion of assessment

However, where the assessee has paid taxes in full on or before the due date, interest under section 234A is not leviable.

Section 234F: Fee for default in furnishing return of income

Where a person who is required to furnish a return of income under section 139, fails to do so within the prescribed time limit under section 139(1), he shall pay, by way of fee, a sum of –

  1. Rs. 5,000, if the return is furnished on or before the 31st December of the assessment year;
  2. Rs. 10,000 in any other case

However, if the total income of the person does not exceed Rs. 5 lakhs, the fees payable shall not exceed Rs.1,000.

Section 139(3): Return of loss

An assessee can carry forward or set off his/its losses provided he/it has filed his/its return under section 139(3), within the due date specified under section 139(1).

Loss from house property and unabsorbed depreciation can be carried forward for set-off even though return has not been filed before the due date.

Section 139(4): Belated Return

A return of income for any previous year, which has not been furnished within the time allowed u/s 139(1), may be furnished at any time before the:

  1. end of the relevant assessment year; or
  2. completion of the assessment,

whichever is earlier.

Section 139(5): Revised Return

If any omission or any wrong statement is discovered in a return furnished u/s 139(1) or belated return u/s 139(4), a revised return may be furnished by the assessee at any time before the:

  1. end of the relevant assessment year; or
  2. completion of assessment,

whichever is earlier.

Thus, belated return can also be revised.

Section 139A: Permanent Account Number (PAN)

Quoting of PAN is mandatory in all documents pertaining to the following prescribed transactions :

  1. in all returns to, or correspondence with, any income-tax authority;
  2. in all challans for the payment of any sum due under the Act;
  3. in all documents pertaining to such transactions entered into by him, as may be prescribed by the CBDT in the interests of revenue. For example, sale or purchase of a motor vehicle, payment in cash of an amount exceeding Rs. 50,000 to a hotel against a bill or bills at any one time, etc.

Inter-changeability of PAN with the Aadhaar number

Every person who is required to furnish or intimate or quote his PAN may furnish or intimate or quote his Aadhar Number in lieu of the PAN w.e.f. 1.9.2019 if he

  • has not been allotted a PAN but possesses the Aadhar number
  • has been allotted a PAN and has intimated his Aadhar number to prescribed authority in accordance with the requirement contained in section 139AA(2).

Section 139AA: Quoting of Aadhar Number

To be quoted by every person on or after 1.7. 2017 in the application for allotment of PAN and in Return of Income.

If a person does not have Aadhar Number, the Enrolment ID of Aadhar application form issued to him at the time of enrolment shall be quoted.

Every person who has been allotted PAN as on 1.7.2017 and who is eligible to obtain Aadhar Number, shall intimate his Aadhar Number to the prescribed authority on or before 31.03.2021.

Section 140A: Self-Assessment

Where any tax is payable on the basis of any return required to be furnished under section 139, after taking into account –

  1. the amount of tax, already paid,
  2. the tax deducted or collected at source
  3. any relief of tax claimed under section 89
  4. any tax credit claimed to be set-off in accordance with the provisions of section 115JD; and
  5. any tax and interest payable as per the provisions of section 191(2)

the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax before furnishing the return.

Where the amount paid by the assessee under section 140A(1) falls short of the aggregate of the tax, interest and fee as aforesaid, the amount so paid shall first be adjusted towards the fee payable and thereafter, towards interest and the balance shall be adjusted towards the tax payable.

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