Income Tax Return E Filing for Asst Year 2023-24 Made Easy –Part 4

 

Filing a revised return for a change in accounting method or disclosure

If you have filed an income tax return with income computed as per the mercantile method of accounting but later realize the need to file a revised return with income computed as per the cash method of accounting, you cannot do so. The option to file a revised return is only available if there is an omission or wrong statement in the original return. A change in the accounting method does not fall under these categories, so you cannot change the method by filing a revised return.

Changing ITR form while filing a revised return

Yes, you can change the ITR form while filing a revised return. The Income-tax Act does not prohibit the filing of a revised return in a different form. If you initially filed ITR-1 and later realize the need to disclose additional income, such as lottery income, you can file a revised return using ITR-2 or the appropriate form for the revised disclosure.

Submitting multiple rectification requests

If you have already filed a rectification request under Section 154 for an error in your processed return and want to raise another rectification request for a different error, you cannot do so until the Income-tax Department processes your previous request. You need to wait for the processing of the previous rectification request before filing a new one.

Furnishing ITR for financial transactions reported in SFT

Filing an Income-tax return is mandatory based on the criteria mentioned in Section 139 of the Income-tax Act. If a person's case does not fall under any of these criteria, they are not required to file a return, even if they have entered into a financial transaction reported in the Statement of Financial Transaction (SFT).

Correcting an invalid return

If your return has been declared invalid, it is considered as if you haven't filed a return at all. In such a case, you can furnish a new return if the time limit for filing the original/belated return has not expired. However, if the time limit has expired, you cannot file a return for that assessment year. The Assessing Officer may proceed to make a best judgment assessment under Section 144. Alternatively, you can approach the Central Board of Direct Taxes (CBDT) to seek condonation of delay in filing the return.

Annual Information Statement (AIS)

The government has expanded the scope of Form 26AS to include information about various transactions made by a person throughout the year. Rule 31AB has been omitted, and a new Rule 114-I has been introduced to upload the Annual Information Statement (AIS) in Form No. 26AS in the registered account of the assessee. The AIS consists of the following information:

·         Information relating to TDS and TCS

·         Information relating to Specified Financial Transactions (SFT)

·         Information relating to the payment of taxes

·         Information relating to demand and refund

·         Information relating to pending proceedings

·         Information relating to completed proceedings

·         Information received from any officer, authority, or body performing any functions under any law or information received under an agreement referred to under section 90 or section 90A or information received from any other person to the extent it may be deemed fit in the interest of the revenue.

All the relevant information available in AIS is automatically pre-filled in the relevant ITR Form.

Can a taxpayer access the information available in the Annual Information Statement (AIS)?

An Assessee can access AIS information by logging into his income-tax e-filing account. If he feels that the information furnished in AIS is incorrect, duplicate, or relates to any other person etc., he can submit his feedback thereon. An assessee can access and respond to AIS information from the income-tax e-filing portal. Alternatively, he can also use an offline utility.

How to access the Annual Information Statement (AIS) online?

·         The following are the steps to access the AIS information online:

 

Step 1: Log in to the Income-tax e-filing website at https://www.incometax.gov.in/ If you are a new user, you will be required to first register on the e-filing portal.

 

Step 2: After log-in, click on Services > Annual Information Statement (AIS)

Step 3: A message shall appear that will prompt you to click on 'proceed' to redirect to the AIS homepage.

Step 4: The next screen provides the instructions relating to the Annual Information Statement (AIS) and Taxpayer Information Summary (TIS). TIS displays the information available in AIS category-wise. It shows the original and revised values (i.e., value processed after the taxpayer's feedback). The revised values in TIS are used for pre-filling of return

Step 5: Click on the next tab of 'AIS'. On the redirected screen, two tiles appear - Taxpayer Information Summary (TIS) and Annual Information Statement (AIS). Select the relevant financial year from the drop-down and click on the AIS tile to view the information.

Step 6: On the next screen, the information available in AIS is displayed in Part A and Part B. Part A contains the general information about a taxpayer (i.e., PAN, Aadhar, Name, Date of Birth, Mobile Number, E-mail Id, and Address). Part B contains the comprehensive information of a taxpayer for the selected financial year as uploaded by the prescribed income-tax authority. The information in Part B is divided into the following categories:

o   TDS/TCS Information

o   SFT Information

o   Payment of Taxes

o   Demand and Refund

o   Other Information

 

Step 7: The information available in AIS can be downloaded in CSV, JSON, or PDF format. The user will have to download the transactions in CSV format for every category of transaction separately. In contrast, the entire AIS can be downloaded only in PDF or JSON. If you select the PDF format, the downloaded PDF will be password protected. To open the file, you will need to enter the combination of the PAN (in lower case) and the date of birth in case of an individual taxpayer or the date of incorporation/formation for the non-individual taxpayer in the format DDMMYYYY without any space. For example, if the PAN is AAAAA1234A and the date of birth is 21st January 1991, then your password will be aaaaa1234a21011991

What should I do if the information in AIS is not correct or does not belong to me?

·         If a taxpayer feels that the information furnished in AIS is incorrect, duplicate, or relates to any other person, etc., he can submit his feedback thereon. Response to AIS information can be made online directly from the income-tax e-filing portal or offline utility.

How to submit feedback on AIS Information (online)?

Step 1: Visit the Income-tax e-filing portal and access AIS information.

Step 2: On accessing AIS, the assessee will find the comprehensive information for the selected financial year under Part B in the following tabs:

TDS/TCS Information

SFT Information

Payment of Taxes

Demand and Refund

Other Information

Step 3: Click on the relevant tab to view the source-wise information.

 

Step 4: Click on the left-hand icon to expand the source-wise information to view transaction-level information.

Step 5: Click on the "Optional" tab in the feedback column to provide and submit feedback on the concerned transaction. An assessee can also submit feedback on multiple transactions in bulk. Feedback options include confirming the information is correct, not fully correct, related to another PAN/year, duplicate/included in other information, denied, or providing customized feedback based on the information category. If the transaction relates to an income, an additional option, "Income is not taxable," shall appear in the feedback options drop-down list.

Step 6: Once the feedback is submitted, a success message shall appear indicating that the Taxpayer Information Summary (TIS) will be updated accordingly. Further, the feedback may be shared with an information source for comments/responses. The assessee can download the acknowledgement receipt from the activity history.

Income Tax Return E Filing for Asst Year 2023-24 Made Easy –Part 3

 When is it mandatory for a non-resident to file a return of income?

If a non-resident person has income that is taxable in India, they must file an Income-tax return based on the provisions applicable to a resident assessee. However, there are specific circumstances where a non-resident may be exempt from filing a return of income. These circumstances include:

·         Non-resident Indian

A non-resident Indian is not required to file a return of income if their total income consists of investment income from a foreign exchange asset or long-term capital gains from such assets, and tax has been deducted from such income.

·         Non-resident sportsperson

A non-resident and non-citizen sports person, such as an athlete, is exempt from filing a return if their income consists of income from participation in any game or sport in India, advertisement income, or income from contributing articles relating to any game or sport in India in newspapers, journals, or magazines. Tax must be deducted from such income.

·         Non-resident sports association

A non-resident sports association or institution is not required to file a return if its income consists of any amount guaranteed to be paid or payable in relation to any game or sport played in India, and tax has been deducted from such income.

·         Non-resident entertainer

A non-resident and non-citizen entertainer is exempt from filing a return if            their income consists of income received or receivable from their performance in India, and tax has been deducted from such income.

·         Non-residents having specified income

A non-resident person, including a non-resident foreign company, is not required to file a return if their total income consists of specified incomes such as interest on bonds, dividends, interest received from the government or Indian concern, and other specified incomes. Tax must be deducted from these incomes.

·         A foreign company whose POEM is in India

A foreign company that is deemed a resident in India is not required to file a return if its total income consists of dividend income, interest received from the government or Indian concern, interest received from an Infrastructure Debt Fund, and other specified incomes. Tax must be deducted from these incomes.

·         Non-residents having income from an investment fund located in IFSC

A non-resident (including a foreign company) receiving income from an Investment Fund in an International Financial Services Centre (IFSC) in India is exempt from filing a return if certain conditions are fulfilled. These conditions include earning income only from the IFSC-based Investment Fund, tax deduction on the income, and not being issued a notice to file a return.

·         Non-resident or foreign co. having income from investment in a specified fund

A non-resident or foreign company is exempt from filing a return if they have earned income in India from an investment made in a specified fund as per Section 10(4D), and certain conditions are met. These conditions include earning income only from the specified fund, tax deduction on the income, and not being issued a notice to file a return.

·         Eligible foreign investor

A non-resident eligible foreign investor is exempt from filing a return if they operate in accordance with SEBI's circular, make transactions in specified capital assets listed on a recognized stock exchange located in any IFSC, earn income only from the transfer of such assets, and meet certain other requirements.

How to furnish a Taxpayer Identification Number (TIN) in the column of "residential   status" in the ITR form if the same wasn't allotted in the resident country?

If a non-resident person has not been allotted a Taxpayer Identification Number (TIN) by their resident country, they can mention their passport number in.

               Furnishing Taxpayer Identification Number (TIN) in the ITR form

To provide your Taxpayer Identification Number (TIN) in the "residential status" column of the ITR form, follow these steps:

1.     Starting from the Assessment Year 2019-20, in addition to mentioning your residential status, you are required to provide additional information about your residential status, such as the number of days you stayed in India and the jurisdiction of your residence.

 

2.     If you are a non-resident and your resident country hasn't assigned you a TIN, you can enter your passport number instead of the TIN.

 

3.     The Central Board of Direct Taxes (CBDT) has clarified that if a non-resident person does not have a TIN from their resident country, they can mention their passport number in place of the TIN.

 

Filing ITR after claiming capital gain exemption

If you are a housewife and have earned a long-term capital gain of Rs. 30 lakhs during the year, but you have invested the capital gain in a new house and claimed an exemption under Section 54, you still need to file an Income-tax return. This is because your total income before claiming the capital gain exemption exceeds the maximum amount not chargeable to tax. Section 139 of the Income-tax Act mandates filing returns when the total income exceeds the maximum exemption limit before claiming capital gain exemption.

Registering on the e-filing portal without an Indian mobile number

To register on the e-filing portal of the Income-tax Department without an Indian mobile number, follow these steps:

1.     The registration process requires you to provide a mobile number and email ID.

 

2.     While an Indian mobile number is commonly used, it is not mandatory.

 

3.     You can register with a mobile number from a foreign country.

 

4.     The Income-tax Department will send an OTP (One-time Password) to the primary mobile number and email ID provided during registration.

 

5.     Enter the OTP received on the mobile number and email ID to complete the account creation process on the e-filing portal.

 

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 www.incometax.gov.in 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 www.incometax.gov.in 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.

 

Income Tax Return E Filing for Asst Year 2023-24 Made Easy –Part 1

 

Due dates and applicable ITR Forms

Here are the due dates for filing Income-tax Returns (ITRs) for the Asst Year 2023-24

1.     If the assessee is required to furnish a report of transfer pricing (TP) Audit in Form No. 3CEB, the original due date is 30th November 2023.

2.     If the assessee is a partner in a firm and needs to furnish a report of Transfer Pricing (TP) Audit in Form No. 3CEB, the original due date is 30th November 2023.

3.     If an individual is the spouse of a person who is a partner in a firm required to furnish a report of Transfer Pricing (TP) Audit in Form No. 3CEB and the provisions of section 5A apply to such spouse, the original due date is 30th November 2023.

4.     For company assesses not required to furnish a transfer pricing audit report in Form No. 3CEB, the original due date is 31st October 2023.

5.     If the assessee is required to get its accounts audited under the Income-tax Act or any other law, the original due date is 31st October 2023.

6.     If the assessee is a partner in a firm whose accounts are required to be audited, the original due date is 31st October 2023.

7.     If an individual is the spouse of a person who is a partner in a firm whose accounts are required to be audited and the provisions of section 5A apply to such spouse, the original due date is 31st October 2023.

8.     In any other case, the original due date is 31st July 2023.

9.     For Individuals, there are different Income Tax Return (ITR) forms based on the nature of income.

10.  ITR 1 is applicable if you have salary income, income from house property, income from other sources, and do not have income from business or profession or capital gains.

11.  ITR 2 is applicable if you have salary income, income from house property, income from capital gains, and income from other sources.

12.  ITR 3 is applicable if you have income from business or profession, including income from partnership firms or if you have income from salary, house property, capital gains, and other sources as well.

13.  ITR 4 is applicable if you have income from business or profession under the presumptive taxation scheme, income from salary, house property, and income from other sources.

14.  For other assesses such as firms, associations of persons, local authorities, and companies, the applicable ITR forms differ.

15.  Firms opting for the presumptive taxation scheme can use ITR 4. Firms, associations of persons, local authorities, and artificial juridical persons can use ITR 5. Companies other than those claiming exemption under Section 11 can use ITR 6.

16.  For persons, including companies, required to furnish returns under specific sections, such as Section 139(4A), 139(4B), 139(4C), and 139(4D), ITR 7 is applicable.

17.  These forms ensure that taxpayers can accurately report their income based on their specific sources and comply with the Income Tax regulations.

 

            Requirement to file ITR for F&O Traders with Loss

• Filing an Income Tax Return (ITR) is mandatory for individuals and Hindu Undivided Families (HUF) if their income before allowing capital gain exemption and deductions under Chapter VI-A exceeds the maximum exemption limit. If you incurred a loss in Futures and Options (F&O) trading, you are not required to submit an ITR under normal circumstances. However, it is necessary to file the ITR to carry forward the F&O losses for future tax assessments. Therefore, you should file your return of income on or before the due date to carry forward the losses.

 

Deadline for Filing ITR for Salaried Employees Engaged in F&O Trading

• The deadline for filing your ITR depends on whether your turnover from F&O trading falls below or exceeds the specified limit. If your turnover is below the specified limit, the due date for filing the ITR will be 31st July. However, if your turnover exceeds the specified limit and you are required to have your accounts audited, the due date for filing the ITR will be 31st October.

 

Calculation of Turnover in F&O Trading

• The Income-tax Act does not provide specific guidelines for calculating turnover in F&O trading. According to the 'Guidance Note on Tax Audit' issued by the Institute of Chartered Accountants of India (ICAI), turnover is determined by aggregating the total of favourable and unfavourable differences, including premium received on the sale of options. Premium received on options should be included in turnover unless it is already included in determining net profit or loss from the transaction. Reverse trades should also be taken into account when calculating turnover.

 

ITR Filing for Senior Citizens with Interest Income

• Filing an ITR is not mandatory for senior citizens if their interest income from bank deposits falls below the maximum exemption limit. However, if tax has been deducted at source (TDS) from the interest income and the TDS exceeds the actual tax liability, filing the ITR is advisable to claim the refund of excess TDS. Failure to file the return will result in the loss of any refund you might be entitled to.

 

Reporting Income from Cryptocurrencies in ITR

• Income from transferring cryptocurrencies (Virtual Digital Assets) should be reported in 'Schedule VDA' in ITR-2 or ITR-3. ITR-1 or ITR-4 cannot be used to report income from cryptocurrencies.

 

Due Date for Filing ITR with Income from Cryptocurrencies

• The due date for filing your ITR with income from cryptocurrencies depends on how you classify the income. If you report the income as capital gains, the due date for filing the ITR will be 31st July. If you report the income as business income, the due date depends on whether your turnover exceeds the specified limit. If turnover exceeds the limit and accounts need to be audited, the due date for filing the ITR will be 31st October. If turnover is below the limit, the due date for filing the ITR will be 31st July.