Saturday, July 1, 2023

Income Tax Return E Filing for Asst Year 2023-24 Made Easy –Part 2

 Filing an Updated Return

  • Section 139(5) allows a taxpayer to file a revised return of income if any omission or error is discovered in the original return. The Finance Act, 2022 introduced the concept of an updated return, allowing taxpayers a longer duration to file the return. An updated return can be filed within one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. It provides an opportunity to rectify any mistakes or omissions made in the original return.

Reporting in Schedules

 What should be the 'relevant accounting period' for reporting foreign assets in Schedule FA?

 ·         Reporting in Schedule FA (Foreign Assets) is mandatory for a taxpayer who is a resident in India and: (a) He holds any asset outside India; (b) He has signing authority in any account located outside India; or (c) He has income from any source outside India. This schedule is not required to be filed by a taxpayer who is a non-resident (NR) or Not Ordinarily Resident (NOR).

·         Schedule FA requires reporting of assets held outside India. Such reporting is required if those assets are held at any time during the relevant accounting period. Reporting is required even if the asset is held for a single day during the relevant accounting period.

·         The ITR Forms notified for Assessment Year 2023-24 have replaced the expression "accounting period" with "calendar year ending as on 31st December 2022". This change implies that the assessee shall furnish the details of all foreign assets held between 01-01-2022 and 31-12-2022 in return to be filed for the assessment year 2023-24. Irrespective of the fiscal year followed in the foreign country (like, Australia follows July to June, Costa Rica follows October to September, etc.), the reporting is to be made if the specified foreign assets are held on 31-12-2022. This change removes all scope of misunderstanding or miscalculating the reporting period.

 How can I claim credit for the taxes paid in a foreign country while doing project work for 3 months?

 ·         If an assessee has paid tax in any foreign country or specified territory outside India, he shall be allowed a credit for the same by way of deduction or otherwise. The credit shall be allowed in the year in which the assessee offered such income to tax or assessed to tax in India. Rule 128 of Income-tax Rules 1962 lays down broad principles and conditions for the computation and claim of foreign taxes paid in overseas countries by the resident taxpayers.

 ·         A statement of foreign income offered to tax and the foreign tax deducted or paid on such income is required to be submitted in Form No. 67. The statement specifying the nature of income and foreign tax deducted or paid is required to be furnished as per the due dates mentioned below:

·        Return filing under Section 139(1), i.e., Original return: On or before the end of the relevant assessment year.

 Return filing under Section 139(4), i.e., Belated return: Before the completion of the assessment.

 Return filing under Section 139(5), i.e., Revised return: Before the completion of the assessment.

·    This form should be furnished electronically. The statement of foreign income offered to tax shall be submitted electronically as prescribed on the e-filing portal of the Income-tax department. The details of relief claimed for the taxes paid outside India shall be reported in 'Schedule TR' of the ITR Form. The taxpayers should ensure the correct computation of relief under DTAA provisions and provide necessary details in Schedule TR.  

       How can I opt for a lower tax regime?

·         To opt for an alternative tax regime, the taxpayer must file the specified form before the due date of filing the income tax return (ITR). The applicable forms and regimes are as follows:

·         Section 115BA: Domestic Company - Form 10-IB

·         Section 115BAA: Domestic Company - Form 10-IC

·         Section 115BAB: Domestic Company - Form 10-ID

·         Section 115BAC: Individuals or HUF - Form 10-IE

·         Section 115BAD: Co-operative society - Form 10-IF

·         The form can be filed through the e-filing portal of the Income Tax Department. It is important to note that filing Form 10-IE is mandatory only if an individual or HUF has income from a business or profession. Once an alternative tax regime is opted for, it cannot be withdrawn for the same or any other previous year.

Logging in on using Aadhar number

·         All individuals who have been allotted a PAN and are eligible for an Aadhar number must inform the Income-tax Department about their Aadhar number.


·         If a person has linked their PAN and Aadhar, they can use their Aadhar number as a 'User ID' instead of PAN to log in on the e-filing portal.


·         This interchangeability of Aadhar and PAN allows individuals to quote their Aadhar number wherever PAN is required to be quoted, and vice versa.

               Logging in on through Net Banking

  • The e-filing portal of the Income-tax Department offers an option to log in through Internet banking.


  • This option can be found at the bottom of the log-in page.
  • It is particularly useful for users who have forgotten their passwords and are unable to reset them.

 Modes for filing the return of income

  • The return of income can be filed in two modes: paper mode or e-filing mode.
  • If the return is filed electronically, the Assessee has several options:

                 E-filing using a Digital Signature (DSC)

    • E-filing without a Digital Signature
    • E-filing through Aadhar OTP (One-Time Password)
    • E-filing under Electronic Verification Code (EVC)


  • If the return is filed using a DSC, Aadhar OTP, or EVC, there is no need to send the signed copy (ITR-V) to Bengaluru CPC (Centralized Processing Centre).


  • However, if the return is filed without DSC, Aadhar OTP, or EVC, the assessee must send the signed copy of ITR-V to the Income Tax Department's Bengaluru CPC address by ordinary post or speed post.

 Time limit for sending a signed copy of ITR-V or verifying the return online

  • The time limit for e-verification or submission of ITR-V is 30 days from the date of filing the return of income electronically.
  • Previously, the time limit was 120 days, but it has been reduced to 30 days as per Notification No. 5 of 2022, dated 29-7-2022.

 Verifying the e-filed return after the expiry of 30 days

  • If a taxpayer has a valid reason or a reasonable cause that prevented them from verifying the return within 30 days, they can request condonation of the delay by providing an appropriate explanation.


  • However, the return will be verified only when the Income-tax Department approves the condonation request.

Consequences of failing to verify a return within 30 days

  • If a person fails to verify a return of income within 30 days from the date of submission on the e-filing portal, the return will be considered invalid.


  • The consequences applicable to non-filing of a return will also apply to those who do not verify the return within 30 days.

 Mandatory filing of the return of income for individuals or HUF

A.    Income exceeding the threshold limit:

  • If the income of an individual or HUF (resident or non-resident) exceeds the maximum exemption limit before claiming certain deductions or exemptions, filing a return is mandatory.


  • These deductions or exemptions include provisions under Section 10(38), deductions under Section 10A, 10B, 10BA, exemptions under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB, and deductions under Section 80C to 80U.

B.     Assets outside India:

An individual (resident and ordinary resident in India) must file their return of income, even if their income does not exceed the maximum exemption limit, if they:


a.     Hold any asset located outside India as a beneficial owner or otherwise.

b.    Have signing authority in any account located outside India.

c.     Are a beneficiary of any asset located outside India.

C.    Seventh Provision to Section 139(1):

·         Filing a return of income is mandatory, regardless of the gross total income, if the assessee's case falls under the seventh proviso to Section 139(1).

This provision requires individuals who are not otherwise required to file a return due to their income not exceeding the maximum exemption limit to file a return of income if, during the previous year:

                     a.     They deposited more than Rs. 1 crore in one or more current accounts.

b.    They incurred more than Rs. 2 lakhs for themselves or any other person for travel to a foreign country.

c.     They incurred more than Rs. 1 lakh towards the payment of electricity bills.

d.    The total sales, turnover, or gross receipt of their business exceeds Rs. 60 lakhs during the previous year.

e.     The total gross receipts in their profession exceed Rs. 10 lakhs during the previous year.

f.      The total tax deducted and collected during the previous year is Rs. 25,000 or more (Rs. 50,000 for a resident individual aged 60 years or more).

g.    The aggregate deposit in one or more savings bank accounts is Rs. 50 lakh or more during the previous year.


·         These situations have been notified by the CBDT via Notification No. 37/2022, dated 21-04-2022.