[FAQs] Income Tax Returns (ITR) | ITR e Filing

It is mandatory for every person who has been allotted PAN and is eligible to obtain an Aadhaar number to intimate his Aadhaar number to the Income-tax Department. If PAN and Aadhaar have been linked, then Income-tax Act allows the interchangeability of Aadhaar with PAN, i.e., a person is allowed to quote his Aadhaar where PAN is required to be quoted or vice-versa. Thus, a person who has linked his Aadhaar with PAN can use his Aadhaar number as a ‘User ID’ instead of PAN to get a log in on the e-filing portal.

The e-filing portal of the Income-tax department has provided a facility to log in through internet banking. This option is provided at the bottom of the login page.

This facility shall be helpful for users who have forgotten their passwords and are unable to reset.

Return of income can be filed in paper mode or e-filing mode. If the return of income is filed through electronic mode, then the assessee has the following options:

• E-filing using a Digital Signature (DSC);
• E-filing without a Digital Signature; or
• E-filing through Aadhaar OTP
• E-filing under Electronic Verification Code (EVC).

If the return of income is filed using a DSC, Aadhaar OTP or under EVC, then there is no requirement to send the signed copy, ITR-V (i.e., acknowledgement of return filed electronically) to Bengaluru CPC. However, where the return is filed without DSC, Aadhaar OTP or EVC, the assessee shall send the signed copy of ITR V to the following address either by ordinary post or by speed post only:

“Income Tax Department – Centralized Processing Centre, Income-tax Department, Bengaluru -560500.”

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

Where a taxpayer has a valid reason or a reasonable cause that prevented him from verifying the return within 30 days, he can request for the condonation of delay by providing an appropriate explanation for the delay. However, the return will be verified only when the Income-tax Department approves the condonation request.

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 same consequences that apply to taxpayers upon non-filing a return will apply to those who do not verify the return within 30 days.

A. Income exceeding the threshold limit

If the income of an individual or HUF (resident or non-resident), before claiming the following deductions or exemptions, exceeds the maximum exemption limit, then filing of return is mandatory:

1. Exemption under Section 10(38);
2. Deduction under Section 10A,10B,10BA;
3. Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB; and
4. Deduction under Section 80C to 80U.

B. Assets outside India

An Individual (resident and ordinary resident in India) shall file his return of income, even if his income does not exceed the maximum exemption limit if he:

1. Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India;
2. Has signing authority in any account located outside India; and
3. Is a beneficiary of any asset (including any financial interest in any entity) located outside India.

C. Seventh Proviso to Section 139(1)

Filing of return of income is mandatory irrespective of gross total income if the assessee’s case is covered under the seventh proviso to Section 139(1). This provision requires every person, who is otherwise not required to file the return due to the reason that his income does not exceed the maximum exemption limit, to file the return of income if during the previous year:

1. He has deposited more than Rs. 1 crore in one or more current accounts maintained with a bank or a co-operative bank;
2. He has incurred more than Rs. 2 lakh for himself or any other person for travel to a foreign country;or
3. He has incurred more than Rs. 1 lakh towards payment of electricity bill;
4. If total sales, turnover, or gross receipt of business exceeds Rs. 60 lakh during the previous year;
5. If total gross receipt in profession exceeds Rs. 10 lakh during the previous year;
6. If the total tax deducted and collected during the previous year is Rs. 25,000 or more. The threshold limit shall be Rs. 50,000 in case of a resident individual of the age of 60 years or more; or
7. If the aggregate deposit in one or more savings bank accounts of the person is Rs. 50 lakh or more during the previous year.

Note: The situations mentioned in points (4) to (7) have been notified by the CBDT via Notification No. 37/2022, dated 21-04-2022.

If a non-resident person has income, which is taxable in India, the filing of an Income-tax return shall be done in accordance with provisions applicable in the case of the corresponding resident assessee. However, suppose a firm is deemed a fiscally transparent entity according to the provisions of DTAA signed between India and a foreign country (in which such firm is a resident). In that case, the return shall be filed in accordance with the status of the partner in that firm.

Following non-resident assessees shall not be required to file the return of income in respect of their income taxable in India, provided the payer has withheld taxes from the payment of such income.

A. Non-resident Indian

Where the total income of a non-resident Indian consists of the following incomes, no return is required to be furnished if tax has been deducted from such income:

• Investment income from a foreign exchange asset (i.e., shares or debentures of an Indian co., etc.);
• Long-term capital gains from such foreign exchange assets.

B. Non-resident sportsperson

No return is required to be furnished by a non-resident and non-citizen sports person, including an athlete, if his income consists of the following income and tax has been deducted therefrom:

• Income from participation in any game or sport in India (other than the winnings from lotteries etc., as referred to under Section 115BB);
• Advertisement Income;
• Income from the contribution of articles relating to any game or sport in India in any newspapers, journals or magazines.

C. Non-resident sports association

No return is required to be furnished by a non-resident sports association or institution if its income consists of any amount guaranteed to be paid or payable in relation to any game or sport played in India (other than the winnings from lotteries etc. as referred under Section 115BB) and tax has been deducted therefrom.

D. Non-resident entertainer

No return is required to be furnished by a non-resident and non-citizen entertainer if his income consists of any income received or receivable from his performance in India and tax has been deducted therefrom.

E. Non-residents having specified income

No return is required to be furnished by a non-resident person (including a non-resident foreign company) if its total income consists of the following incomes and tax has been deducted therefrom:

(a) Interest on bonds, as referred to in Section 115AC, issued by an Indian company under the following schemes and purchased in foreign currency:

• • • Foreign Currency Exchangeable Bonds Scheme, 2008;
    • Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993;
    • Depository Receipts Scheme, 2014;

(b) Dividend on GDRs as referred to in Section 115AC;

(c) Dividend income;

(d) Interest received from Government or Indian concern on monies borrowed or debt incurred by Government or Indian concern in foreign currency;

(e) Interest received from an Infrastructure Debt Fund as referred to in Section 10(47);

(f) Interest on borrowings in foreign currency or monies borrowed by way of Rupee Denominated Bonds as referred to in Section 194LC;

(g) Interest on the investment made by FII or QFI in Rupee Denominated Bond of an Indian company or Government security as referred to in Section 194LD;

(h) Distributed income being interest received or receivable from a Special Purpose Vehicle as referred to in Section 194LBA(2);

(i) Income from units purchased in foreign currency of a mutual fund, as specified in Section 10(23D);

(j) Royalty or fees for technical services [other than those referred to in section 44DA(1)] received from the Government or an Indian concern in a situation as referred to in Section 115A(1)(b).

If the income of a non-resident is covered under clause (c) to (j) as referred above, he shall be exempt from the filing of return of income provided the tax has been deducted from such incomes at a rate not less than the rate prescribed under relevant provisions.

F. A foreign company whose POEM is in India

A foreign company is said to be a resident in India if its place of effective management (POEM) is in India. However, no return is required to be filed by a foreign company if its total income consists of only the following incomes and tax have been deducted therefrom at a rate not less than the rate prescribed under relevant provisions:

• Dividend Income;
• Interest received from Government or Indian concern on monies borrowed or debt incurred by Government or Indian concern in foreign currency;
• Interest received from an Infrastructure Debt Fund as referred to in Section 10(47);
• Interest on borrowings in foreign currency or monies borrowed by way of Rupee Denominated Bonds as referred to in Section 194LC;
• Interest on the investment made by FII or QFI in Rupee Denominated Bond of an Indian company or Government Security as referred to in Section 194LD;
• Distributed income being interest received or receivable from a Special Purpose Vehicle as referred to in Section 194LBA(2);
• Income from units purchased in foreign currency of a mutual fund, as specified in Section 10(23D).

This relaxation from the filing of return of income is available even if a foreign company is deemed a resident in India.

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

Section 194LBB provides that where any income, other than business income, is distributed to unit holders (whether resident or non-resident) in respect of units of Investment Fund, tax shall be deducted therefrom at the applicable rates. Consequently, the deductee is required to furnish his return of income according to Section 139 of the Act.

The CBDT has exempted¹ a non-resident (and a foreign company) deductee from the requirement of filing of Income-tax return. This exemption is subject to fulfilment of the following conditions:

• The non-resident has earned income from an Investment Fund set up in an International Financial Services Centre (IFSC) located in India;
• This income is the only income of such non-resident which is taxable in India; and
• Tax due on such income has been deducted and deposited to the credit of the Central Government in accordance with section 194LBB;
• He has not been issued a notice to file the return of income under provisions of Section 142(1) or Section 148 or Section 153A or Section 153C.

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

The CBDT has exempted² non-resident or foreign co. from the requirement of filing of Income-tax returns. This exemption is subject to fulfilment of the following conditions:

• The assessee (i.e., a non-resident or a foreign company) has earned income in India from the investment made in Category III AIF, which fulfils the conditions of being a specified fund as referred under Section 10(4D);
• The assessee does not earn any income in India other than the income from investment in the aforesaid AIFs during the previous year.
• Income-tax due on such income has been deducted at source and remitted to the Central Government by such AIF at the rates specified in Section 194LBB; and
• The assessee has furnished the following details and documents to the AIF:

1. 1. Name, e-mail id and contact number;
   2. Address in the country or specified territory of which he is a resident;
   3. A declaration that he is a resident of a country or specified territory outside India; and
   4. Tax Identification Number allotted in his home country, and if such number is not available, then a unique number on the basis of which the Government of his home country identifies him.

• The assessee has not been issued a notice for filing a return of income under Section 142(1) or Section 148 or Section 153A, or Section 153C for the relevant assessment year.

I. Eligible foreign investor

The CBDT has exempted³ a non-resident being an eligible foreign investor from the requirement of filing of Income-tax return. This exemption is subject to fulfilment of the following conditions:

• He operates in accordance with SEBI’s circular⁴;
• He has made transactions only in the capital asset referred to in Section 47(viiab), which are listed on a recognised stock exchange located in any IFSC;
• The consideration on transfer of aforesaid capital asset should be paid or payable in foreign currency;
• He does not earn any income in India, other than the income from transfer of aforesaid capital assets; and
• He has furnished the following details and documents to the stock broker through which the transaction is made:

1. 1. Name, e-mail id and contact number;
   2. Address in the country or specified territory of which he is a resident;
   3. A declaration that he is a resident of a country or specified territory outside India; and
   4. Tax Identification Number allotted in his home country, and if such number is not available, then a unique number based on which the Government of his home country identifies him.

• He has not been issued a notice for filing of return of income under Section 142(1) or Section 148 or Section 153A, or Section 153C for the relevant assessment year.

With effect from Assessment Year 2019-20, besides specifying the residential status, the assessee is required to provide additional information about his residential status, i.e., no. of days of stay in India, the jurisdiction of his residence, and tax identification number in case he is a non-resident.

Taxpayer Identification Number (TIN) is given in some countries as an identification number used for tax compliance and to assess the taxpayer by the revenue tax authorities in those countries.

The CBDT has clarified⁵ that where TIN has not been allotted to a non-resident person by his resident country, the non-resident can mention his passport number in place of TIN.

Yes, filing of Income-tax return is mandatory as total income before claiming capital gain exemption under Sections 54, 54B, 54EC, 54F, 54G, 54GA and 54GB exceeds the maximum amount not chargeable to tax. Section 139 mandates filing of returns where the assessee’s total income exceeds the maximum exemption limit before claiming capital gain exemption.

Mobile number and email-id are mandatory fields to create an account at the e-filing portal of the Income-tax Dept. E-filing portal requires a new user to verify his mobile number and email-id by submitting the One-time Password (OTP) sent on such mobile number and e-mail ID.

However, it is not necessary to have an Indian mobile number, and you can also register with the mobile number of a foreign country. Dept. will send an OTP to the primary mobile number and primary e-mail id, which you need to enter for creating an account at the portal.

After the return filing, if the assessee discovers any omission or wrong statement and finds it necessary to correct it, he can file a revised return. However, this option to file the revised return is not available if the reason is other than omission or wrong statement. A change in the method of accounting is not an omission or wrong statement. Thus, the method of accounting cannot be changed by filing a revised return.

Yes, you can file the revised return in a different form. Income-tax Act does not prohibit the filing of revised return in a new form.

You cannot submit a rectification request if the Income-tax Dept hasn’t processed your previous request, and you have to wait for the processing of the previous rectification request before filing a new request.

Filing of return of income is governed by Section 139 only. A person isn’t required to file a return of income if his case does not fall under any of the criteria mentioned in section 139 (Refer to FAQ 7). There is no such requirement that furnishing of return is mandatory if a person has entered into a financial transaction reported in SFT.

In case a return has been declared invalid, it shall be deemed that no return has been filed by the taxpayer. In such a case, a new return can be furnished if the time limit for furnishing the original/belated return has not yet expired. If the time limit for furnishing the return has expired, you cannot file the return for such an assessment year. In that situation, the Assessing Officer can proceed to make the best judgment assessment under Section 144. Alternatively, you may approach the CBDT for condonation of delay in filing of return.