Filing of Income Tax Returns

As per income tax rule, every person must furnish a return of his total income or the total income of any other person in respect of which he is assessable under the income tax act in all cases where his total income or the total income of any other person in which he is liable to be assessed exceeds, in any relevant accounting year the maximum amount which is not chargeable to income tax. the return of income must be furnished by the assessee in the prescribed manner by the board from time to time.

Filing of Return - compulsory
One-by-Six Scheme

• Under one by six scheme, a person has to file his return if he:
• Is owner of the house
• Is an ownership of a motor car
• Expends on foreign travel
• Holds a credit card
• Pays Electricity payments in excess of Rs 50,000/annum
• Member of a club - where the entrance fee is more than Rs 25,000/-
  

The filing should be voluntary and the assessee should not wait for the notice of the assessing officer calling for the filing of the return. The time limit for filing of the return by an assessee if his total income of any other person in respect of which he is assessable exceeds the maximum amount not chargeable to tax shall be as follows:

• Where the assessee is a company the 30th day of November of the assessment year
  
• Where the assessee is a person, other than a company :-
  
• Where the account of the assessee are required to be audited under the income tax act or any other law, or in cases where the report of the chartered Accountant is required to be furnished under sections 80HHC or 80HHD i.e.for deduction in respect of profits retained for export business and also in respect of earnings in convertible foreign exchange, or in case of a cooperative society, the 31st day of October of the assessment year
• Where the total income includes any income from the business or profession, not being a case falling under sub clause (i), the 31st day of August for the assessment year in any other case, 30th day of June of the assessment year
  

The requirements of Income-tax Act making it obligatory for the assessee to file a return of his total income apply equally even in cases where the assessee has incurred a loss under the head 'profit and gains form business and profession' or under the head 'capital gains' or maintenance of race horses. Unless the assessee files a return of loss in the manner and within the same time limits as required for a return of income or by the 31st day of July of the assessment relevant to the previous year during which the loss was sustained, the assessee would not be entitled to carry forward the loss for being set off against income in the subsequent year.


Late Return
Person who does not file the return within the time allowed may be file a belated return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, which ever is earlier. However, in case of returns relating to assessment year 1988-89 or any other assessment year, the period allowable is two years.

Revised Return
An assessee can make such amendments, additions or changes as may be found necessary by him. Thus he has the right to revise the return of income originally filed by him. Such a revised return may be filed by the assessee at any time before the assessment is made. There is no limit under the income tax Act in respect of the number of time for which the return of income may be revised by the assessee. However, if a person deliberately files a false return he will be liable to be imprisoned under section 277 and the offense will not be condoned by filing a revised return.

Where the return relates to assessment year 1988-89 or any earlier assessment year, the period of limitation is two years from the end of the relevant assessment year.

Defective Return
If the assessing officer feels that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within 15 days from the date of such intimation or within such further period as may be allowed by the assessing officer on the request of the assessee. If the assessee fails to rectify the defect within the aforesaid period, the return shall be deemed invalid and further it shall be deemed that the assessee had failed to furnish the return. However, where the assessee is made the assessment officer may condone the delay and treat the return as a valid return.

Signing of Return
The return of income must be signed and verified. In case of an individual, by the individual himself where he is absent from India, by the individual himself or by some person duly authorised by him in this behalf where he is mentally incapacitated from attending to his affairs, by his guardian or any person competent to act on his behalf where for any other reason, it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf.

Penalty
Under the existing law, penalty for delay in filing of return of income is calculated as a percentage of the shortfall of tax. Where tax has already been deducted at source, or advance tax has been duly paid, no penalty is leviable. It is proposed to amend the law to provide for the penalty of Rs.1000 even in such cases. This provision is targeted towards the salary earners who always had the impression that their liability was over the moment the tax was deducted by the employer.

Recent Changes
According to accounting year 2008-09, Non-auditable accounts are furnished by those businesses, which have annual turnover of up to Rs 40 lakh per annum and those professionals having income up to Rs 10 lakh per annum. Taxpayers including salaried class would also be allowed for the first time to file tax returns in 1,000 designated post offices in the country, from July 26 onwards .

One-by-Six Scheme omitted
One-by-Six Scheme was omitted according to the proposal of Finance Bill, which said that no return shall be required to be furnished under the proviso for assessment year 2006-07 and subsequent years. The amendment took effect from 1st June, 2006.