ACM801 Lesson-4

Lesson -4

Contents –

• Return Filing Procedure

• E-filing procedure
• Types of Returns
• Types of Assessments

INCOME TAX RETURN

An income tax return is a form that enables a taxpayer to declare his income, expenses,
tax deductions, investments, taxes etc. The Income Tax Act, 1961 makes it mandatory
under various scenarios for a taxpayer to file an income tax return.

An income tax return is a form filed to report the annual income of a taxpayer. There
may be various reasons for filing an income tax return even in the absence of income.

A taxpayer may want to file his income tax return for reporting his income for a financial
year, carrying forward losses, claiming an income tax refund, claiming tax deductions,
etc.

The Income Tax Department provides the facility for electronic filing (e-filing) of an
income tax return. Before discussing the steps involved in the e filing of income tax
return, it is essential for a taxpayer to keep the documents for calculation and reporting
data in ITR.

Latest Update:

CBDT has issued a circular on 9th Sep 21 extending the timelines for certain direct tax
compliances for AY 2021-22.

1. ITR filing due date extension:

i) ITR filing by taxpayers not covered under audit is extended from 30th Sep 21 to 31st
Dec 21
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ii) ITR filing for tax audit cases is extended to 15th Feb 22

iii) ITR filing for transfer pricing is extended to 28th Feb 22

iv) ITR filing of belated or revised return for FY 20-21 is extended from 31st Dec 21 to
31st March 22

RETURN FILLING PROCEDURE

The user can file the Income Tax Return (ITR) in two ways:

1. Offline 2. Online

Offline: Download the applicable ITR, fill the form offline, save the generated XML file
and then upload it.

To e-File the ITR using the upload XML method, the user must download either of the
following ITR utility:

Excel Utility

Java Utility

Perform the following steps to download the Java Utility or Excel Utility, then to generate
and Upload the XML:

Step- 1 Go to the Income Tax e-Filing portal https://www.incometax.gov.in/iec/foportal/

Step- 2 Download the Appropriate ITR utility under 'Downloads > IT Return
Preparation Software'.

Step- 3 Extract the downloaded utility ZIP file and Open the Utility from the extracted
folder. (For more information and prerequisites, refer the 'Read me' document).

Step- 4 Fill the applicable and mandatory fields of the ITR form.

Step- 5 Validate all the tabs of the ITR form and calculate the Tax.
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Step- 6 Generate and Save the XML

Step-7 Login to e-Filing portal by entering user ID (PAN), Password, Captcha code
and click 'Login'.

Step- 8 Click on the 'e-File' menu and click 'Income Tax Return' link.

Step -9 on Income Tax Return Page:

PAN will be auto-populated

Select 'Assessment Year'

Select 'ITR form Number'

Select 'Filing Type' as 'Original/Revised Return'

Select 'Submission Mode' as 'Upload XML

Step- 10 Choose any one of the following option to verify the Income Tax Return:

Digital Signature Certificate (DSC), Aadhaar OTP.EVC using Prevalidated Bank

Account Details, EVC using Prevalidated Demat Account Details, .I would like to e-
Verify later. Please remind me.

Step – 11 click continue

Step – 12 attach the ITR XML file. On choosing,

Step – 13 DSC as verification option, Attach the signature file generated from DSC
management utility.

Step – 14 Aadhaar OTP as verification option, Enter the Aadhaar OTP received in the
mobile number registered with UIDAI.
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Step – 15 EVC through Bank account, Demat account or Bank ATM as verification
option, Enter the EVC received in the mobile number registered with Bank or Demat
Account respectively.

Step- 16 Other two verification options, the ITR will be submitted but the process of
filing the ITRs is not complete until it is verified. The submitted ITR should be e-
Verified later by using 'My Account > e-Verify Return' option or the signed ITR-V
should be sent to CPC, Bengaluru.

Step- 17 Submit the ITR.

Step -18 to view the uploaded ITRs

E- FILING PROCEDURE

Step-1 Go to the Income Tax e-Filing portal, https://www.incometax.gov.in/iec/foportal/

Step-2 Login to e-Filing portal.

Step- 3 Click on the 'e-File' menu and click 'Income Tax Return' link.

Step -4 on Income Tax Return Page:

PAN will be auto-populated

Select 'Assessment Year'

Select 'ITR Form Number'

Select 'Filing Type' as 'Original/Revised Return'

Select 'Submission Mode' as 'Prepare and Submit Online

Step-5 Click on 'Continue'

Step- 6 Fill all the applicable and mandatory fields of the Online ITR Form.

Step-7 Choose the appropriate Verification option in the 'Taxes Paid and Verification'
tab.
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Step-8 e-Verify

Step-9 I would like to e-Verify later within 120 days from date of filing

Step- 10 I don't want to e-Verify and would like to send signed ITR-V through normal or
speed post to "Centralized Processing Center, Income Tax Department, Bengaluru -
560 500" within 120 days from date of filing.

Step- 11 Click on 'Preview and Submit' button, Verify all the data entered in the ITR.

Step- 12 Submit' the ITR.

Step- 13 On Choosing 'I would like to e-Verify' option, e-Verification can be done
through any of the following methods by entering the EVC/OTP when asked for.

Step- 14 The EVC/OTP should be entered within 60 seconds else, the Income Tax
Return (ITR) will be auto-submitted. The submitted ITR should be verified later by using
'My Account > e-Verify Return' option or by sending signed ITR-V to CPC.

Step- 15 To view the uploaded ITRs

ITR FORMS

In total, there are almost 9 types of ITR forms available for a tax payer to file his taxes.
However, only the following forms are to be taken into consideration by individuals when
filing returns as per the Central Board of Direct Taxes in India:

ITR FORMS SHORT DESCRIPTION

ITR-1 Also known as the Sahaj form, this income tax return form is to be filed
solely by an individual taxpayer. Any other assesse liable to pay tax is
not eligible to avail of this form for filing their returns.
ITR 2A Introduced in the assessment year 2015-16, The ITR-2A form is a new
income tax return form. This form can be used by a Hindu Undivided
Family (HUF) or an individual taxpayer
ITR 2 The ITR-2 Form is a type of ITR form which is generally used by
individuals who have accrued income through the sale of assets or
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property. Also, this form is useful for individuals who earn income from
countries outside India. In most cases, individuals or Hindu Undivided
Families (HUF) can avail of this form to file their IT returns
ITR 3 The ITR 3 is applicable for individual and HUF who have income from
profits and gains from business or profession. The persons having
income from following sources are eligible to file ITR 3:
•Carrying on a business or profession (both tax audit and non-audit
cases)
•The return may include income from House property, Salary/Pension,
capital gains and Income from other sources
ITR 4 Also known as sugam. Individual, HUF and Firms other than LLP
having a total income of up to 50 lakh should file ITR-4
ITR 4S ITR-4S Form is the Income Tax Return form for the taxpayers who opt
for a presumptive income scheme under Section 44AD, Section 44ADA
and Section 44AE of the Income Tax Act.
ITR 5 The ITR-5 form is used only by the following bodies to file income tax
returns:
•Firms
•Limited Liability Partnerships (LLPs)
•Body of Individuals (BOIs)
•Association of Persons (AOPs)
•Co-operative Societies
•Artificial Judicial Persons
•Local Authorities
ITR 6 Except those companies or organizations that claim tax exemption as
per Section 11, the ITR-6 form is used only by all companies.
Organizations that can claim tax exemptions as per Section 11 are
organizations in which the income received is accumulated from the
property used for the purpose of religion or charity. This particular
income tax return form is only available to be filed online.
ITR 7 Those individuals or companies that are required to submit their returns
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under the following sections are required to file their income tax returns
through ITR-7:
•Section 139(4A) - returns can be filed by individuals who receive
income from any property that is held for the purpose of charity or
religion
•Section 139(4B) - returns are to be filed by political parties provided
their total income earned is above the non-taxable limit
•Section 139(4C) -returns are to be filed by the following entities:
•Any institution or association mentioned under Section 10(23A)
•Any association involved with scientific research
•Any institution mentioned in Section 10(23B)
•Any news agency
•Any fund, medical institution or educational institution
•Section 139(4D) - returns are to be filed by entities such as colleges,
universities or any other such institution wherein income returns or loss
are not required to be provided in accordance with other provisions
outlined in this section.

ITR V Acknowledgement of filling the return of income

TYPES OF RETURN

RETURN TYPES DESCRIPTION

Normal Return u/s Under Section 139(1), in the following cases the filing of
139(1) Income Tax Return is Mandatory:
• Every person who has a total income that exceeds the
exemption limit is liable to furnish Income Tax Return
within the due date
• Any private, public, domestic or foreign country located
and/or doing business in India
• Any firm including LLP
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Loss return u/s 139(3) The Income tax return filed with the details of losses is the
Loss Return. You may have to file an income tax return with
details of the loss, depending upon the type of loss. Filing a
return for your losses helps to carry them forward to future
years, in which these can be set off against future gains when
they arise.
Belated Return u/s If the assessee fails to furnish the return of income within the
139(4) due date under Section 139(1) or within the time which is
allowed to him through the notice under Section 142(1), then
he can file a Belated Return.
Revised Return 139(5) Revised return is a return which is filed u/s 139(5) as revision
for the original return. It is a revision for any omission or
mistake made in the filing of that original return. In order to
meet the deadline, a person may forget to disclose some
income or may make any other mistake like a mistake in
claiming any deduction.
Returns eligible for revision:
• An original return filed u/s 139(1).
• The belated return filed u/s 139(4) can also be revised
now.
Defective Return u/s Defective Return u/s 139(9) is the type of return for which a
139(9) person receives a notice because the IT Department has
found any discrepancies or mistakes or any missing
information in ITR. Once you file your income tax return, the
details provided by you in the ITR are cross-verified and
processed by the IT dept. The dept. compares the details
provided by you with the information that is available to them

ASSESSMENT
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The Income Tax Act of 1961 requires everyone in a taxable category to file their income
tax return by the due date. Following the submission of the returns, the Income Tax
Department verifies the accounts and assesses the taxability. This is referred to as an
Income Tax Assessment. In simpler terms, the process by which the Income Tax
Department examines ITRs is known as the ‘assessment’. There are various types of
assessments are as follow:

TYPES OF DESCRIPTION
ASSESSMENTS
Self-assessment u/s This is the type of income tax assessment in which the assesse
140A calculates the tax themself, usually accompanied by payment of
the amount they believe is due.
Summary assessment The assessment under section 143(1) is similar to the initial review
u/s 143(1) of a tax return. The taxpayer receives an intimation u/s 143(1) from
the IRS under this section. The department will send you a
comparative income tax calculation. The overall income or loss
incurred is computed in the income tax assessment.
Scrutiny assessment Scrutiny assessment refers to the examination of an income tax
u/s 143(3) return by giving an opportunity to the assesse to substantiate the
income declared and the expenses, deductions, losses,
exemptions, etc. claimed in the return with the help of evidence.
During the course of scrutiny, the assessing officer gets an
opportunity to conduct enquiries, as deemed fit, from the assessee
and from third parties.
Best Judgment The term ‘best judgment assessment’ refers to the assessing
Assessment u/s 144 officer’s opinion or calculation of the assessee income in the
context of income tax law. In the situation of best judgment
assessment, the evaluating officer will make the decision based on
the best reasoning, i.e., they will not be dishonest. The assessee
will not be dishonest in his or her assessment, nor will he or she be
hostile to the officer.
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Re-Assessment (or) If the assessing officer has reason to think that income liable to tax
Income Escaping has escaped assessment for any assessment year, they will
Assessment u/s 147 conduct an income escaping assessment under Section 147.
Moreover, it gives them the authority to reassess or re-compute
income, turnover, and other figures that have escaped their notice.
Procedure of re- assessment:
• Issue a notice a submit return of income
• Sufficient reasons
• Time limit for notice u/s 148
If escaped income from tax is up to RS. 100,000 4 years
period
If escaped income is more than RS. 100,000 6 years
period
If any income located outside India 16 years of period

Assessment in Case Under this type of Income Tax Assessment, the Assessing Officer
of Search u/s 153A will:
• Issue notice to such person requires furnishing within such
period, as specified in the notice. Clause (b) referred to the
return of income of each assessment year falling within six
assessment years and is verified in prescribed form. Setting
forth such other particulars as may be prescribed and the
provisions of this Act shall, so far as may be, apply
accordingly as if such return were a return required to be
furnished under section 139;
• Assessor re-assess the total income of six assessment
years immediately preceding the assessment year relevant
to the previous year in which such search is conducted or
requisition is made.
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Note: Section 153A issues a notice for 6 years, preceding the search not for the year
of search and no return is required to be filed (for the year of search) u/s 153A. File
only a regular return u/s 139.

SELF-EXAMINATION QUESTIONS

Very short questions

1. What is self-assessment?
2. Explaining following terms:
Summary assessment
Scrutiny assessment
3. Who shall verify the return?
4. What Due date for filling return of income in case of an individual?
5. For an individual, having income from salary or family pension and interest,
prescribed form is?
6. Explaining following terms:
Voluntary return of income
Belated return of income