70+ FAQs on Income-tax Returns (ITR) for Assessment Year 2023-24

The due dates for filing of ITRs for various types of assessees are as follows:

Filing an Income Tax Return 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.

Since you have incurred a loss during the year, you are not required to submit an ITR under normal circumstances. However, it is still necessary to file the ITR in order to carry forward the F&O losses. Therefore, you should file your return of income on or before the due date to carry forward the losses.

The gains or losses arising from trading in F&O are always taxable under the head of ‘Profits and Gains from Business or Profession’. Income or loss from F&O shall be deemed as normal business income (non-speculative business) even though delivery is not affected in such transactions.

As your income from F&O falls under the business head, it is important to calculate your turnover to determine whether you are required to have your accounts audited. The turnover computation is crucial because the requirement for a tax audit is based on turnover. If your turnover exceeds the specified limit, you must have your accounts audited, and in that case, the due date for filing your ITR will be 31^st October. However, if your turnover is below the specified limit, the due date to file the ITR will be 31^st July.

The Income-tax Act does not contain any provision or guidance for the computation of turnover in F&O trading. However, the ‘Guidance Note on Tax Audit’ issued by the ICAI prescribes the method of determining turnover, which shall be as under:

• The total of favourable and unfavourable differences is taken as turnover.
• Premium received on the sale of options is also included in turnover. However, where the premium received is included for determining net profit for transactions, the same should not be included separately.
• In respect of any reverse trades, the difference thereon should also form part of the turnover.

All the favourable or unfavourable differences are aggregated to calculate the turnover.

For example, Mr A enters into the following transaction during the financial year:

In derivative transactions, the aggregate of both favourable and unfavourable differences (i.e., income and loss) is considered the turnover. Further, the premium received on the sale of options is also included in turnover if the same is not included while determining the net profit or loss from the transaction. Thus, the turnover of Mr A shall be as follows:

Filing an ITR is not mandatory since your income falls below the maximum exemption limit. However, it is important to note that if the amount of tax paid by an individual exceeds his actual tax liability, the excess amount is considered an ‘income-tax refund’ that can be claimed by filing a return. If you are eligible for an income-tax refund, it can only be claimed by filing the ITR.

Considering that the tax has been deducted from your interest income, filing the ITR to claim the refund of TDS is advisable. If you do not file the return, you cannot claim any refund.

If you have income from transferring cryptocurrencies (Virtual Digital Assets), you should report such income in ‘Schedule VDA’ in ITR-2 or ITR-3. It is important to note that you cannot use ITR-1 or ITR-4 to report this income.

If you earn income only from cryptocurrencies, the due date for filing your ITR depends on the head under which you report this income. When reporting income from the transfer of virtual digital assets in ‘Schedule VDA’, you need to select whether it falls under the category of business income or capital gains. Here is how the due dates are determined based on the chosen category:

Capital Gains: If you report the income as capital gains, your due date for filing the ITR will be 31^st July.

Business Income: If you report the income as business income, you need to compute the turnover to determine whether you must get your accounts audited. If your turnover exceeds the specified limit, you must have your accounts audited, and in that case, the due date for filing your ITR will be 31^st October. However, if your turnover is below the specified limit, the due date for filing your ITR will be 31^st July.

Section 139(5) allows a taxpayer to file the revised return of income if he discovers any omission or error in the original return. However, the revised return can be filed 3 months before the relevant assessment year or before the completion of the assessment, whichever is earlier.

The Finance Act, 2022 has introduced the concept of updated return to allow a longer duration for an assessee to file the return of income. An updated return can be filed within 24 months from the end of the relevant assessment year (subject to certain conditions). An updated return can be filed even after the expiry of time limits specified for the filing of a belated return or revised return of income.

In the financial year 2023-24, a person can file an updated return for the assessment years 2021-22 and 2022-23.

All taxpayers are eligible to file an updated return. However, such a return cannot be filed in the following circumstances:

• If an updated return is a return of a loss;
• In case an updated return results in lower tax liability;
• In case an updated return results in or increasing the refund;
• In case of a search initiated against the assessee;
• Where books of account or assets etc. are requisitioned in case of the assessee;
• In case survey conducted against the assessee;
• Where documents or assets seized or requisitioned in case of any other person belong to the assessee;
• In case an updated return has already been filed;
• In case assessment is pending or completed;
• In case AO has information about the assessee under specified Acts;
• In case AO has information about the assessee under DTAA or TIEA;
• In case any prosecution proceeding is initiated; or
• In case of a person or class of persons as notified by the CBDT.

(Read More: Updated Return of Income on taxmann.com/practice)

No penalty or fee is levied upon a person who wishes to furnish an updated return. However, he is required to pay an additional tax in accordance with Section 140B.

The additional tax shall be equal to 25% of the aggregate of tax and interest payable by a person on the filing of the updated return, where such return is furnished after the expiry of the due date of filing of belated or revised return but before completion of a period of 12 months from the end of the relevant assessment year.

Where the updated return is furnished after the expiry of 12 months from the end of the relevant assessment year but before completion of the period of 24 months from the end of the relevant assessment year, the additional tax payable shall be 50% of the aggregate of tax and interest payable.

Further, a fee under Section 234F shall be charged if such a person did not furnish a return of income for that Assessment Year for which he is furnishing an updated return.

No separate ITR forms have been notified for filing of an updated return. A taxpayer is required to furnish an updated return in those ITR forms which were notified for the respective Assessment Year for which an updated return is to be furnished. Such an ITR form is to be filed along with the newly notified form ITR-U.

The CBDT vide Notification No. 48/2022, dated 29-04-2022, had notified Form ITR-U, which has to be filed with the respective ITR, to furnish an updated return.

ITR-U seeks the following additional details from the taxpayers:

Part A – General Information (ITR-U)

This part of ITR-U seeks general information from taxpayers related to the filing of an updated return. It includes the following:

1. Are you eligible to file an updated return? i.e., a person is not falling in such circumstances wherein an updated return can’t be filed.
2. Selecting the ITR form for filing an updated return
3. Reasons for updating income. This includes reasons such as returns previously not filed, income not reported correctly, wrong heads of income chosen, etc.
4. Are you filing an updated return within 12 months from the end of relevant AY or between 12 to 24 months from the end of relevant AY?
5. Are you filing an updated return to reduce carried forward loss, unabsorbed dep., or tax credit?

Part B – Computation of updated income and tax payable (ITR-U)

This part of ITR-U includes heads of income under which additional income is reported. The taxpayer is required to mention only additional income. Total income as reported in Part B TI of the ITR form shall also be reported here to compute the additional tax payable by the assessee on the updated return.

Adjustments such as previously paid tax, refund issued to the taxpayer, and fee for default in the furnishing of return of income under Section 234F shall be considered while calculating such additional tax.

Tax Payments (ITR-U)

This part of ITR-U includes details of tax payment by the assessee on the updated return under Section 140B and details of payments of advance tax, self-assessment tax, regular assessment tax, and credit for which has not been claimed in the earlier return.

Reporting in Schedule FA (Foreign Assets) is mandatory for a taxpayer who is a resident in India and:

• He holds any asset outside India;
• He has signing authority in any account located outside India; or
• 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 31^st 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.

Example 1

The assessee is required to furnish the details of Google LLC’s share in ITR applicable for Assessment Year 2023-24 even if he has not held the foreign asset in the relevant previous year.

Example 2

The shares of Google LLC were acquired within the previous year but after the end of the relevant calendar year. Thus, the assessee is not required to furnish the details of Google LLC’s share in ITR applicable for Assessment Year 2023-24. The disclosure requirement for such investment shall only arise in the Assessment Year 2024-25.

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:

The form is required to be furnished electronically through the e-filing portal of the Income-tax department. Further, the details of tax relief claimed for taxes paid outside India are required to be reported in ‘Schedule TR’ of ITR form.

A taxpayer wishing to opt for an alternative tax regime must file a specified form on or before the due date of filing an income tax return (ITR).

Notes:

• Filing Form 10-IE is mandatory only if an individual or HUF has income from a business or profession. If an individual or HUF has income other than income from a business or profession, an alternative tax regime can be opted in the ITR form itself while filing the returns of income.
• Once an alternative tax regime is opted for, it cannot be withdrawn for the same or any other previous year. However, the alternative tax regime opted by filing Form 10-IE can be withdrawn only once for a previous year other than the year in which it was exercised.

To keep a check on the investment in closely held companies, a new table has been inserted in ITR forms [ITR-2, ITR-3 & ITR-5] to seek the following details in respect of unlisted equity shares held at any time during the previous year by an assessee:

• Name of the company;
• PAN of the company;
• and cost of acquisition of shares held at the beginning of the year;
• of shares, face value, issue price (or purchase price), and date of purchase of shares acquired during the year;
• and sale consideration of shares transferred during the year; and
• and cost of acquisition of shares held at the end of the previous year.

If the ‘cost of acquisition’ or ‘sale consideration’ of unlisted shares is not ascertainable because those shares were received under a gift, will, amalgamation, etc., then the assessee may enter zero or the appropriate value in respective fields.

The details furnished in this table are required only for reporting and are not relevant for the computation of income or tax liability¹.

Instructions to ITR Forms clarified that if a person has held shares of a company during the previous year, which are listed in a recognised stock exchange outside India, then the same shall not be required to be reported in ITR.

Schedule AL in Income-tax returns form (ITR 2 and ITR 3) requires individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs. Further, Schedule FA requires reporting of assets held outside India. Reporting in Schedule FA is mandatory for a taxpayer who is a resident in India. It is not required to be filed by a taxpayer who is a Non-resident (NR) or a Not-ordinarily Resident (NOR). Though both the schedules require reporting yet, they serve different purposes. Schedule FA seeks details of foreign assets and income from any source outside India. An assessee has to enter details of foreign assets if they were held even for a single day during the relevant accounting period. On the other hand, Schedule AL seeks details of assets and liabilities the assessee holds at the end of the previous year. Therefore, details of foreign assets are to be reported in schedule AL if the assessee holds the same at the end of the previous year.

Explanation 4 to Section 139(1) of the Income-tax Act 1961 defines the meaning of ‘beneficial owner’. As per the Explanation, a beneficial owner means an individual who has provided, directly or indirectly, consideration for the asset. Further, if such asset is held for the immediate or future benefit of the individual providing the consideration or any other person.

As per the instructions to ITR forms, financial interest would include, but is not limited to, any of the following cases:

(a) The resident assessee is the owner of record or holder of legal title of any financial account, irrespective of whether he is a beneficiary or not; or

(b) The owner of record or holder of the title in one of the following:

• • • An agent, nominee, attorney, or a person acting in some other capacity on behalf of the resident assessee with respect to the entity;
    • A corporation in which the resident assessee owns, directly or indirectly, any share or voting power;
    • A partnership in which the resident assessee owns, directly or indirectly, an interest in partnership profits or an interest in partnership capital;
    • A trust of which the resident assessee has beneficial or ownership interest; or
    • Any other entity in which the resident assessee owns, directly or indirectly, any voting power, equity interest or assets or interest in profits.

The assets and liabilities disclosed in the balance sheet of the business in Part A-BS of ITR are not required to be reported in Schedule AL.

The Finance Act 2021 has amended Sections 10(11) and 10(12) to provide that no exemption shall be allowed in respect of interest income accrued during the previous year in the recognised and statutory provident fund to the extent it relates to the contribution made by the employee exceeding Rs. 2,50,000 in any previous year on or after 01-04-2021.

The interest income accruing in respect of the employee’s contribution over Rs. 2,50,000 shall be taxable under the head of “income from other sources”. However, if such a person has contributed to a fund in which there is no contribution by the employer, the limit of Rs. 2,50,000 shall be increased to Rs. 5,00,000. The method for the computation of such interest income has been prescribed in Rule 9D.

ITR forms seek separate reporting of interest accrued on Provident Fund to which no exemption is available.

(Read More: Employee Provident Fund on taxmann.com/practice)

Virtual Digital Asset (VDA) covers cryptocurrencies, Non-Fungible Tokens (NFTs), and any other notified digital asset. It does not cover Indian currency, CBDCs, Foreign currency, and notified digital assets. If you generate any income from the transfer of VDAs, it must be reported in Schedule VDA in the ITR form. The income generated from the transfer of virtual digital assets will be subject to taxation at a rate of 30% and applicable surcharge and cess. It is important to note that you cannot avail deductions for any expenses, except for the cost of acquisition, if applicable, when calculating such income.

Schedule VDA requires details such as the acquisition date, transfer date, category of income for taxation, acquisition cost in case of a gift, and consideration received. If you have income from VDA, you cannot file ITR-1 or ITR-4. Instead, such income can be reported in ITR 2 or ITR 3. Such income can be taxed either under the head of business income or capital gains.

If you have taken employment with more than one employer during the financial year, it is necessary to report salary income from all employers in ‘Schedule S’. You should obtain Form 16 from each employer to help you file a return.

A Standard Deduction of Rs. 50,000 is an absolute and unconditional deduction allowed to an employee, and it does not require any supporting evidence or investment. This deduction can be claimed only once per year, regardless of the number of job changes during that period. Therefore, you cannot claim the deduction of Rs. 50,000 twice for the salary received from both employers.

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 exempted² 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 exempted³ 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 exempted⁴ 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 circular⁵;
• 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 clarified⁶ 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.

The Government has enlarged the scope of Form 26AS to cover information regarding various transactions made by a person during the year. The CBDT⁷ has omitted Rule 31AB, and a new Rule 114-I has been inserted to provide that the authorities will upload the Annual Information Statement (AIS) in Form No. 26AS in the registered account of the assessee. Such form shall consist 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; and
• Information received from any officer, authority, or body performing any functions under any law or information received under an agreement referred 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 such relevant information available in AIS shall be automatically pre-filled in the relevant ITR Form.

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.

The followings 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 login, click on Services > Annual Information Statement (AIS)

Step 3:  A message shall appear that will prompt you to click on ‘proceed’ to redirect to 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 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, Aadhaar, 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:

• TDS/TCS Information;
• SFT Information;
• Payment of Taxes;
• Demand and Refund; and
• 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

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.

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 concerned transaction. An assessee can also submit feedback on multiple transactions in bulk.

An assessee can choose the following types of feedback:

• Information is correct
• Information is not fully correct
• Information relates to other PAN/Year
• Information is duplicate/included in other information
• Information is denied
• Customized Feedback. This is based on information category. If the transaction relates to an income, then 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)⁸ will accordingly be updated. Further, the feedback may be shared with an information source for comments/responses. The assessee can download the acknowledgment receipt from the activity history.

Vide Circular No. 6/2016, dated 29-2-2016, the CBDT has instructed the Assessing Officers to consider the following while deciding whether surplus generated from the sale of listed shares or other securities is taxable as capital gains or business income:

1. Where the assessee himself, irrespective of the period of holding of listed shares and securities, opts to treat them as stock-in-trade, the income arising from the transfer of such shares/securities would be treated as its business income.
2. In respect of listed shares and securities held for more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as capital gains, the same shall not be put to dispute by the Assessing Officer. However, once taken by the assessee in a particular Assessment Year, this stand shall remain applicable in subsequent Assessment Years. The taxpayer shall not be allowed to adopt a different/contrary stand in this regard in subsequent years.

The CBDT has formulated the above principles to reduce litigation and maintain consistency in the treatment of income derived from the transfer of shares and securities. All the relevant provisions of the Act shall continue to apply to the transactions involving the transfer of shares and securities.

The CBDT⁹ has decided that the income arising from the transfer of unlisted shares would be considered under the head ‘Capital gains’, irrespective of the holding period, to avoid disputes/litigation and maintain a uniform approach.

Intra-day trading is considered a speculative business, and the resultant gain or loss would be a speculative gain or speculative loss. Speculative gain is taxed at normal rates, and speculative losses can only be set off against speculative profit.

The benefit of the maximum exemption limit shall be available from long-term capital gains taxable under Section 112A. However, the assessee cannot take the benefit of deduction available under Chapter VI-A. The taxable income and tax liability thereon shall be calculated as under:

In respect to Assessment Year 2020-21, the CBDT has clarified¹⁰ that the scrip-wise details are required to be filled up for those shares/units that are eligible for grandfathering. The Finance Act, 2018 has allowed exemption to the gains made on the listed shares/specified units up to 31-01-2018 by introducing grandfathering mechanism for computation of long-term capital gains for these shares.

Following the press release, we may conclude that the scrip-wise details are not required in income tax return forms for AY 2023-24 to compute gains that are not eligible for grandfathering.

Schedule CG of ITR requires the assessee to furnish the details relating to the immovable property transferred during the year. To track all the transactions related to the sale of immovable properties, the schedule seeks the buyer’s information, such as the buyer’s name, PAN/Aadhaar No. of the buyer, address of the property, etc. It is mandatory to furnish these details irrespective of the fact that immovable property sold is situated in India or outside India. However, quoting of PAN of the buyer is mandatory only if tax is deducted under section 194-IA or is mentioned in the documents related to the sale of the property.

Certain provisions of TDS (including TCS) require deduction of tax at source at the time of payment or at the time of credit, whichever occurs earlier. Advance payments are also subjected to TDS. The Schedule of TDS/TCS in the ITR forms provides columns to fill in the information of tax deducted in previous years, but credit for the same is to be claimed in the future year. One cannot claim credit of TDS pertaining to income that is taxable in the subsequent year. Thus, such TDS credit can be carried forward to the subsequent year and can be claimed in the year income is offered to tax.

You can submit your correct bank account number after selecting an option of refund re-issue. The procedure to apply for refund re-issue is outlined hereunder:

1. Login to incometax.gov.in
2. Go to ‘Services’ and select ‘Refund Re-issue’.
3. Select ‘Create Refund Re-issue Request’.
4. Select the record for which you want to submit request of refund reissue.
5. Select the bank account where you would like to receive the refund.
6. Click on ‘Proceed to Verification’ button.

Credit for TDS as claimed in return may match with the balance appearing in the Form 26AS, but the Assessing Officer still raises demand for payment of the differential amount of TDS. The CBDT¹¹ has highlighted that such tax credit mismatches may happen due to the following mistakes:

1. Invalid/incorrect TAN of deductor;
2. Furnishing the same TAN for more than one deductor;
3. Filing information in wrong TDS Schedules in the Return Form;
4. Furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax, etc.;
5. Tax deducted by one deductor was wrongly included in the amount of tax deducted by another deductor.

Consequently, the tax credit could not be allowed to the taxpayers while processing returns despite the tax credit being available in Form 26AS statement. The CBDT, therefore, has directed the taxpayers to verify if the demand raised is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. The rectification requests have to be submitted to the jurisdictional Assessing Officer if such officer processed the return, or the taxpayer is informed by CPC, Bengaluru that such rectification is to be carried out by Jurisdictional Assessing Officer. In all other cases of processing by CPC, Bangalore, an online rectification request can be made in the following manner:

Step 1: Log in to the e-filing portal.

Step 2: Click on Services > Rectification

Step 3: On the next page, click New Request.

Step 4: Select the Assessment Year from the drop-down. Click Continue.

Step 5: On the next screen, select the option of ‘Tax Credit Mismatch Correction’ from the following types of Income-tax rectification requests:

• Reprocess the return
• Tax credit mismatch correction
• Additional information for 234C interest
• Status Correction
• Exemption section correction
• Return data correction (Offline)
• Return data correction (Online)

Step 6: The schedules under this request type are auto-populated based on the records available in the corresponding processed return. If you need to edit or delete a schedule, select the schedule, then click Edit or Delete.

Step 7: Enter the correct details in the relevant schedules and click ‘Continue’ to submit the request.

On submission, you will be taken to the verification page.

Where TDS mismatch is due to an error in the TDS return filed by the deductor, you should approach the deductor to rectify the TDS return.

A taxpayer should approach his deductor and request to deposit TDS with Government and file a TDS statement. However, he has no legal power to enforce the deductor to do so. Thus, if the deductor has refused the taxpayer’s request, he can submit TDS proof to Dept.

The ITR forms are annexure-less, and hence, a taxpayer cannot attach any supporting documents along with ITR in support of the TDS claim. Thus, it is advisable to file ITR, claim TDS credit and wait for the processing of ITR. Once ITR is processed, the taxpayer will receive notice of TDS mismatch.

Upon receiving such notice, he can file a reply and supporting documents showing that the TDS has been duly deducted from his income. The taxpayer can submit the salary slips to support his claim. Further, he can submit the bank statement showing credit of net salary/other income after deduction of TDS.

AO may allow TDS credit to the taxpayer if the documents submitted are found correct and cancel demand raised by the CPC. However, if he doesn’t allow the TDS credit, the only option left before the taxpayer is approach Court.

It is essential to note Instruction No. 275/29/2014, dated 01-06-2015. The CBDT has directed that as per section 205 the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter- XVII. Thus the Act puts a bar on direct demand against the assessee in such cases, and the demand on account of tax credit mismatch cannot be enforced coercively. This may be brought to the notice of all the Assessing Officers that if the facts of the case so justify, the assessees are not put at any inconvenience on account of a default of deposit of tax into the Government account by the deductor.

You can file a self-declaration to the bank in Form 15H if you are a senior citizen. Otherwise, you can file a self-declaration in Form 15G.

The tax shall be deducted from the amount of interest payable on time deposits if it exceeds Rs. 40,000. Any interest payable in respect of saving deposits shall not attract any TDS.

A facility has been provided on the e-filing website to provide online responses to such demands. The actions required to be performed by the taxpayer are as under:

Step 1: Log in to the e-filing portal.

Step 2: Click Pending Actions > Response to Outstanding Demand to view a list of all outstanding demands. If you wish to pay the demand, click ‘Pay Now’ to pay the demand.

Step 3:  On the Response to Outstanding Amount page, click ‘Submit Response’ to submit a response to outstanding demand.  Depending on the scenario, you can go to the relevant section:

• If the demand is correct, but you have not paid the tax
• If the demand is correct and you have already paid the tax
• If you disagree with the demand (in full or part)

If the demand is correct, you can submit that the demand is correct. On such selection, you will be taken to the e-Pay tax page, where you can make the tax payment. On successful payment, a success message is displayed along with a Transaction ID.

If demand is correct and you have already paid the tax, click ‘Add Challan Details’ and add the details of challan, Type of Payment (minor head), Challan Amount, BSR Code, Serial Number, and  Date of Payment. Click ‘Attachment’ to upload a copy of the challan (PDF). Click Save. On successful validation, a success message is displayed along with a Transaction ID.

If you disagree with the demand (in full or part), click ‘Add Reasons’. Select the appropriate reasons for disagreement, and enter the relevant details. Click Confirm to confirm your submission. On successful submission, a success message is displayed along with a Transaction ID.

Please keep a note of the Transaction ID for future reference.

The CBDT has empowered the CPC to adjust tax demand against the tax refunds due to the assessee. Thus, the refund claimed by Mr A can be adjusted with the demand standing against him for the Assessment year 2022-23.

Fees under Section 234F is levied if the assessee does not furnish the return of income on the due dates prescribed under Section 139(1). The amount of such late filing fees shall be Rs. 5,000 if the return is furnished after the due date specified under section 139(1). However, if the total income of the person does not exceed Rs. 5 lakhs, then Rs. 1,000 shall be the late filing fees.

The late filing fee under Section 234F shall not apply to taxpayers where return filing is not mandatory and the taxpayer is filing such return of income voluntarily.

The Income-tax department now allows payment of tax refund in the foreign bank account of non-resident taxpayers. Non-residents are required to mention the following details in the ITR form:

1. SWIFT Code of Foreign Bank Account;
2. Name of Bank; and
3. International Bank Account Number (IBAN).

If you want to claim relief under 89, filing of Form 10E online on the e-filing website is mandatory. Taxpayers who claim relief under Section 89 without filing Form 10E will get a notice from Income-tax Dept. stating that

“The relief under Section 89 has not been allowed in your case, as the online form 10E has not been filed”.

Thus, you are required to file Form 10E online before filing your Income-tax return.

If the employer fails to provide relief under section 89 and deducts excess tax, then you can claim such relief in your return of income and claim a refund of excess tax deducted. However, it is mandatory to file Form 10E online on the e-filing website.

Form 10E can be filed online in the following steps:

Step 1: Login to www.incometax.gov.in.

Step 2: After you log in, click on tab e-File > Income Tax Forms> File Income Tax Forms. On the landing page, select the following options:

Even if exemption of House Rent Allowance under Section 10(13A) and deductions under Chapter VI-A are not considered by the employer in Form 16, they can be claimed in the Income-tax return. Accordingly, the excess tax deducted by the employer can be claimed as a refund.

Section 80GG explicitly denies the deduction to the assessee having any income falling under section 10(13A) (House Rent Allowance). Since your salary structure contains an HRA component, you are not eligible for claiming deduction under section 80GG.

To claim a deduction under section 80G, the taxpayer must provide the details of their donations in ‘Schedule 80G’ in the ITR form as applicable to them. This schedule consists of four tables, i.e., Table A, B, C, and D. Each of which corresponds to a different category of NGO/charitable institution. One must ensure that donation information is entered in the correct table.

While filling the table, a taxpayer will be required to provide the following details of their donations to charitable institutions or specified funds during the year:

• Name and address of the donee
• PAN of the donee
• Total amount of the donation – with a break-up of the amount paid in cash and other modes
• Eligible amount of the donation, which is the amount that is eligible for deduction

In the ITR forms for the Assessment Year 2023-24, a new column has been added to ‘Table D’. This column requires disclosure of the ARN (Donation Reference Number) for donations made to entities where a 50% deduction is allowed, subject to the qualifying limit. The ARN should be obtained from the donation certificate issued in Form 10BE by the donee institutions and should be mentioned in the ITR.

In addition to providing the necessary information in ‘Schedule 80G’, it is also essential to separately mention the total amount of deduction claimed under Section 80G in Schedule VI-A if you are filing a return of income in form ITR-2 or ITR-3

If the annual rent paid by the employee exceeds Rs. 100,000 per annum, it is mandatory for the employee to report the PAN of the landlord to the employer. In case the landlord does not have a PAN, a declaration to this effect from the landlord with the name and address of the landlord should be filed by the employee.

Section 71 allows the set-off of losses from house property against any other income. However, losses under the head ‘house property’ shall be allowed to be set off only to the extent of Rs. 200,000 in any assessment year. Thus, only a loss of Rs. 200,000 can be adjusted against your salary income and a loss of Rs. 100,000 shall be carried forward for set-off in subsequent years.

Tax is levied under Section 112A at the concessional rate of 10% on long-term capital gains arising from the transfer of said securities if the long-term capital gain exceeds Rs. 1 lakh.

The new section 112A provides for taxability of long-term capital gains above Rs. 1 lakh. As gain up to Rs. 1 lakh is not chargeable to tax, it couldn’t be called exempt income. Therefore, any long-term capital loss arising from the sale of listed equity shares can be set off and carried forward.

Any income of a minor child is added to the income of parents. However, if a minor child earns any income by applying his skill, talent or specialized knowledge and experience, it is excluded from clubbing provision. The minor child is assessable on such income through his guardian. You need to apply for PAN of your daughter in Form 49A on her behalf. After obtaining PAN, you need to get yourself registered on the e-filing portal as her representative assessee and file ITR for the concerned Assessment Year. The PAN application for a minor child shall be filed and signed by a representative assessee on her behalf. In such cases, besides details of the minor, details of such representative assessee shall also be furnished under PAN application Form.

Where a person has died intestate (without leaving behind a Will), his estate devolves immediately on his legal heirs according to the personal law that governed the deceased. In such a case, whatever income accrued or received by the deceased person from the date of death till the last day of the financial year shall be considered as income of the legal heir and disclosed in his Income-tax return.

Yes, filing of return is must in this case. The obligation to file ITR would be as follows:

(a) Income accruing before the death of Mr X

ITR is required to be filed in the name of the deceased (Mr X) under his PAN by his legal representative. Thus, ITR for the salary income of Rs. 12 lakhs has to be filed by the legal representative of Mr X.

(b) Income accruing after his death

Had Mr X prepared the will before his death, the executor would have been required to file ITR before distribution. After that, the legal representatives are required to file the return in their personal capacity.

As Mr X had not prepared his will before his death, his legal heirs are required to file ITR in their personal capacity. Thus, the interest income shall be added to the income of legal representatives or legal heirs, as the case may be.

Yes, a legal heir can file a return on behalf of the deceased assessee even if DSC is mandatory. For filing such a return, the legal heir has to obtain DSC in his capacity. To file the return on behalf of the deceased, a person has to first register as a legal heir on the income-tax India e-filing website.

You need to enter the name, PAN, and date of death of the deceased person. Further, upload the scanned copy of the following documents in a zip file.

• Copy of PAN card of the deceased;
• Copy of death certificate;
• Copy of Legal heir proof as per the norms;
• Copy of Letter of Indemnity (optional);

The Income-tax department will verify the request, and once the request is approved, the legal heir will be able to carry on all the e-filing related services on behalf of the deceased.