Income tax is a yearly tax charged on income of a person by the country government. It is imputed for the corresponding assessment year at the tax rates laid down by the finance Act for the assessment year in respect of the previous year. We calculated Income tax rate slab which is provided annually by Government in finance budget.

Income from Salaries

Income from house property

Profits and gains of business or profession

Capital gains

Income from other sources

he Return Form can be filed with the Income-tax Department in any of the following ways, –

  (i) by furnishing the return in a paper form;

 (ii) by furnishing the return electronically under digital signature;

(iii) by transmitting the data in the return electronically under electronic verification code;

(iv) by transmitting the data in the return electronically and thereafter submitting the verification of the return in Return Form ITR-V;

Note

Where the return of income is filed in the manner given at (iv) without digital signature, then the taxpayer should take two printed copies of Form ITR-V. One copy of ITR-V, duly signed by the taxpayer, is to be sent (within the period specified in this regard, i.e., 120 days) by ordinary post or speed post to “Income-tax Department – CPC, Post Bag No. 1, Electronic City Post Office, Bengalore-560100 (Karnataka). The other copy may be retained by the taxpayer for his record.

Minimum of following three amounts is available as HRA exemption:
1. Actual House Rent Allowance provided by employer to employee.
2. House Rent paid in excess of 10% of Salary.
3. 50% of Salary in case House is located in Metro cities (Mumbai, Delhi, Kolkata, Chennai) or 40% in case of any other cities.

for all three conditions mentioned above relevant period is very important. Means if there is any change in Salary, HRA paid to employee, location of rented house and actual rent paid by employee HRA need to calculate from that relevant change Hence one should avoid calculating HRA on annual basis if there is any change in above factors.

Meaning of Salary for calculating HRA (Basic Salary + Dearness allowance if terms of employment so provide + fixed percentage of turnover achieved by employee)

Income tax return  can be submitted after due date u/s 139(4). An assessee who miss to file income tax return within due date will have to pay interest u/s 234A.

Though According to income tax laws, Income Tax filing return is mandatory for every individual or entity whose income exceeds the threshold limit mentioned in the income tax act but there are certainly other benefits as well for the filing of ITR:-

• Loans Availment – Filing the ITR will help individuals as well entities when they have to apply for a loan as all major banks can ask for a copy of tax returns
• Can take input or carry forward losses –If you file returns properly & on time, you will be able to carry forward business & capital losses (short-term or long-term), if any, in a financial year to be adjusted against capital gains made in the subsequent years
• Helps in Visa Processing – If you want to travel overseas, foreign consulates may ask you to furnish ITR receipt of the last couple of years at the time of the visa interview. Some embassies may also ask for ITR receipts of previous three years, while some others may ask for the most recent certificate
• Apply For Government Tenders – Various government requires tenders to show their tax return receipts of the previous five years to apply tender. If you don’t file ITRs you may miss the business opportunity.
• Buying a high-value life cover insurance  – Buying a high-value life cover insurance especially over INR 1 Crore requires your ITR documents to verify annual income. “Life insurance companies, like LIC, Max, etc ask for ITR receipts these days if you opt to buy a term life insurance policy.

Individuals/HUFs are required to furnish details of assets and liabilities only when their income exceeds Rs. 50 lakhs. The Schedule AL wherein the details of assets and liabilities are to be furnished is available only in ITR-2, ITR-3 and ITR-4. Thus, the individual or HUF who has to report the details of assets and liabilities has to opt for filing of return in ITR 2, ITR 3 or ITR 4 

Taxpayers who have received dividend income above Rs. 10 lakhs during the relevant previous year cannot opt for ITR-1 Sahaj. You will have to file ITR-2 or ITR-3 or ITR-4

Taxpayers having unexplained income cannot opt for ITR-1 Sahaj. You will have to file ITR-2 or ITR-3 or ITR-4 

Q1. Which form should a taxpayer fill up to file his income-tax return for the assessment year 2019-20?

Q2. I have some unexplained income. Whether I can choose ITR-1 to file my income-tax return?

Taxpayers having unexplained incomes cannot opt for ITR-1 Sahaj. You will have to file ITR-2 or ITR-3 on criteria given in FAQ No. 1.

Q3. I have received dividend income of Rs. 15 lakhs from an Indian Company. Whether I can choose ITR-1 to file my income-tax return?

Taxpayers who have received dividend income above Rs. 10 lakhs during the relevant previous year cannot opt for ITR-1 Sahaj. You will have to file ITR-2 or ITR-3 on criteria given in FAQ No. 1.

Q4. Whether all taxpayers who are earning income from salary only can choose ITR-1 for filing income-tax returns?

Yes, all taxpayers who are earning income only from salary can choose ITR-1 for filing tax returns. However, salaried taxpayers cannot choose ITR-1 if:

Q5. Whether individuals are required to mention details of assets and liabilities in ITR 1 (Sahaj)?

Individuals/HUFs are required to furnish details of assets and liabilities at year-end only when their taxable income exceeds Rs. 50 lakhs. The Schedule AL wherein the details of assets and liabilities are to be furnished is available only in ITR-2 and ITR-3. Thus, the individual or an HUF who has to report the details of assets and liabilities has to opt for filing of return in ITR 2 or ITR 3 on criteria given in FAQ No. 1.

Q6. My income is Rs 60 lakhs. What type of details of assets and liabilities I need to mention in income-tax return?

During 2016, the Govt. had introduced new Schedule AL in Income-tax returns requiring individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs. If taxpayer is required to provide information in this Schedule, he shall provide the details of cost of immovable property, jewellery, vehicles, shares, bank and cash balance, etc., at the year end. Further, taxpayer is also required to disclose address of immovable property and description of movable assets.

Q7. What shall be the carrying value of assets or liabilities to be disclosed in the Schedule AL of ITR?

Every individual or HUF having income of more than Rs. 50 lakhs is required to furnish information of his assets and liabilities in Schedule AL of the ITR. The assets and liabilities are required to be reported at their cost price.

In case taxpayer has acquired assets by gift, will or any other mode specified under section 49(1) of the Income-tax Act, 1961, the asset shall be reported at the cost at which previous owner has acquired it as increased by the cost of improvement incurred by such previous owner or by the taxpayer, as the case may be. If cost of acquisition of previous owner can’t be determined, the value may be estimated at the circle rate or market value of assets, as the case may be.

Filing of Returns

Q8. How can I login at https://incometaxindiaefiling.gov.in through Net Banking facility?

E-filing portal of Income tax department has provided facility for login without creating account on portal. Taxpayer can use the Net Banking facility to login at e-Filing Portal. This option is provided at the bottom of login page.

When user uses the net banking facility to log-in, he is not be required to enter the password (at e-filing website) and the Captcha code. This facility shall be useful for the users who have forgotten their passwords and are unable to reset it.

Q9. Who are required to file return of income electronically?

For the Assessment Year 2019-20, every taxpayer has to file Income-tax return electronically except a super senior citizen (whose age is 80 years or above during the previous year 2018-19) who furnishes the return either in ITR-1 or ITR-4.

The various options for filing of a return have been enumerated below.

Q10. What are the modes for filing of return of income?

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

If return of income is filed using a DSC or under EVC, then there is no requirement of sending the signed copy, ITR V (i.e., acknowledgement of return filed electronically) to Bangalore CPC. However, if return is filed without using DSC or without EVC, the assessee shall send the signed copy of ITR V on the following address within 120 days of uploading the return either by ordinary post or by speed post only:

Income Tax Department – CPC, Post Bag No.-1, Electronic City Post Office, Bangalore -560100, Karnataka

Q11. When is it mandatory to file return of income?

In case of an individual, HUF, AOP or BOI it is mandatory to file return of income if his/its gross total income (without giving effect to provisions of section 10(38) or section 10A or section 10B or section 10BA or Chapter VI-A deduction) exceeds the maximum exemption limit. However, it is mandatory for a company, firm, an LLP, co-operative society and local authority to file its return on income in every situation irrespective of quantum of income.

Filing of return shall be mandatory for a political party and charitable or religious trust if total income of such assessee exceeds the maximum exemption limit before claiming exemption under Section 13A (for political party) and Section 11 & 12 (for charitable or religious trust) respectively.

Q12. When is it mandatory for a non-resident to file return of income?

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

However, a non-resident assessees shall not be required to file the return of income in respect of prescribed income taxable in India if taxes have been withheld by the payer from the payment of such income.

Q13. I am an Individual and resident of India. Do I need to file return if my income is below taxable limit but am having an account in a foreign bank?

Yes, it is mandatory for you to file the income-tax return. In view of Fourthproviso to Section 139(1), it is mandatory to file income-tax return, if following conditions are satisfied:

The assessee is required to provide requisite details of such account, assets or financial interest in the return of income.

Q14. I am a housewife. During the year I have earned long term capital gain of Rs. 30 lakhs. I have invested this capital gains in a new house and claimed exemption under Section 54. Now, my total taxable income is nil. Do I need to furnish ITR?

No, filing of Income-tax return shall not be mandatory for you because your total income is below exemption limit. Section 139 requires mandatory filing of return only if total income of an assessee, before claiming deductions under Chapter VI-A, exceeds maximum exemption limit.

Though you have no obligation to file the Income-tax return, yet it is advisable that you should file return so that you don’t invite any enquiry notice. As per Section 285BA the prescribed authorities¹ shall file a Statement of Financial Transaction (SFT) with the Income-tax Dept. wherein details of persons are furnished who enter into a transaction of sale or purchase of an immovable property and transaction value or stamp value of such property is Rs. 30 lakhs or more. When Income-tax Dept. doesn’t get the corresponding information from the taxpayers, which can be matched with the details furnished by the authorities in SFT, the Dept. generally issues an enquiry notice to identify the reasons for not filing of return.

Q15. I have furnished my original return of income through a Chartered Accountant. Can I file revised ITR through a Tax Return Preparer?

Rule 5 of the Tax Return Preparer Scheme, 2006 restricts Tax Return Preparer (TRP) for filing of revised return in case original return is not filed by a TRP. Since your original return is not filed by a TRP you cannot file the revised return through a TRP.

Q16. Is there any restriction on number of returns that can be filed using same email-ID or same mobile number?

Only 10 returns can be filed using same email-id or same mobile number. This is to ensure that family members and related business concerns (not exceeding 10 separate users) not having personal email or mobile number can be covered under a common email or mobile number, but it is advisable that taxpayers should have their own unique email ID and Mobile number registered with the Department.

Q17. I am a non-resident person. How can I register on e-filing portal without an Indian Mobile number?

An Indian mobile number and a valid email-id are mandatory to create an account on the e-filing portal of the Income-tax Dept. E-filing portal requires the new users to verify their mobile numbers and email-ids by submitting the One-time Password (OPT) sent on such mobile number and email ID. Therefore, you cannot register on e-filing portal if you don’t have an Indian mobile number.

Q18. What are the due dates for filing of Income-tax returns for the previous year 2018-19 (Assessment Year 2019-20)?

Q19. If the last date to file income-tax return is a public holiday, whether the next day would be treated as “last date of filing”?

Normally, income-tax department continues its operation during the last day of filing of income-tax return even if the last day eventually falls on Sundays or on holidays. However, if department is closed on the last due date, then the immediately next working day of the department would be considered as the last date of filing of income-tax return.

Since most of the taxpayers are required to file return of income electronically, it would not be relevant for them if Dept. is not working on the last day which happens to be a public holiday. A super senior citizen, who wishes to file return of income in paper format, can file return of income on the next day if Dept. is not working on the last day.

Q20. What documents are to be enclosed along with the return of income?

Income-tax returns are annexure less. Hence, there is no need to enclose any document along with the return of income. Thus, documents like TDS certificate, balance sheet, Profit & Loss A/c, Capital A/c, proof of investments, etc., are not to be attached along with the return of income. However, those documents should be retained and may have to be produced before the Assessing Officer whenever he requires you to do so.

Q21. What is the time-limit to file a revised and belated return for the Assessment Year 2019-20?

Q22. I have filed my return where income has been computed as per mercantile method of accounting. Now, I want to file a revised return with income computed as per cash method of accounting. Can I do so?

After filing of return, if assessee discovers any omission or wrong statement and he 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 for the same is other than omission or wrong statement. ‘Change in method of accounting’ cannot be treated as an omission or wrong statement. Thus, method of accounting cannot be changed by filing of revised return.

Q23. I have filed ITR-1 disclosing only salary income. Subsequently I have found that I forgot to disclose the lottery income. Can I change the ITR Form from ITR-1 to ITR-2 while filing revised return?

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

Q24. I identified an error in the processed return and filed a rectification request under section 154. After a few days, I found another error but e-filing portal isn’t allowing me to raise rectification request for second time. What can I do?

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

Q25. Is verification of original return mandatory to file a revised return?

No, it is not mandatory to verify the original return first before filing of revised return. There is no need to verify original return in case revised return is filed and verified. CPC shall process only the revised return and no action shall be taken against the original return.

Q26. How to change the details of bank account furnished in return?

If you want to change any detail furnished in the ITR, you can do so by filing a revised return. As an alternative way, e-filing portal allows a taxpayer to change the following personal details in the return without filing of revised return:

However, any change in personal details can be made before processing of return by CPC. To change personal details, you have to raise a new request from ‘Service Request’ page at e-filing job.

Q27. Is it mandatory to furnish ITR if a financial transaction entered into by a person is reported in Statement of Financial Transaction (SFT)?

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

Q28. My return became invalid as I failed to respond to notice issued for defective return. Is there any option to correct that invalid return?

In case a return has been declared as invalid, it shall be deemed as if no return has been filed by the taxpayer. In such 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, then you cannot file the return for such assessment year. In that situation, the Assessing Officer can proceed to make best judgment assessment under Section 144. Alternatively, you may approach the CBDT for condonation of delay in filing of return.

Q29. I have agricultural income of Rs. 4 lakhs and income from other sources amounting to Rs. 1 lakh. Do I need to file ITR?

The agricultural income is exempt from tax under Section 10(1) but it is included in the total income for rate purpose. The object of aggregating the net agricultural income with non-agricultural income is to tax the non-agricultural income at higher rates. Since agriculture income is exempt from tax and your non-agriculture income is below taxable limit, you are not required to file the return.

Q30. I am getting pre-filled information in respect of my income and deductions, etc., while filing Income-tax return in ITR-1. How tax department is pre-filling such details and what is the source of that information?

With a view to ease the process of income-tax return filing process and to cross check the information filled therein by a taxpayer with information reported under TDS return (i.e., Form 24Q or Form 26Q) or tax pass book (i.e., Form 26AS), the tax department has started the process of auto-populating certain information in ITR forms.

Currently, the pre-filled informations are available only in respect of persons filing return in ITR 1 or ITR 4. If a person chooses to file the said returns online through e-filing website then all information shall be automatically pre-filled in the relevant ITR Form. However, if a person chooses to file the return through Java utility of the department then he can download the pre-filled xml from e-filing website and import it in java utility.

The department is using following sources of informations for pre-filled ITR forms:

Aadhaar-PAN linking

Q31. How to link Aadhaar number with PAN?

If your Aadhaar number isn’t yet linked with PAN then every time you login on e-filing portal, you shall be shown a popup message asking you to link Aadhaar number with PAN. Use the link given in the pop-up window to link the Aadhaar number with PAN.

Alternatively, you can also follow the following steps to link Aadhaar number with PAN:

Q32. What are the different modes to link Aadhaar number with PAN?

It is mandatory to link Aadhaar number with PAN to file income-tax return. Government has prescribed following modes to link Aadhaar number with PAN:

(a) SMS:

Send SMS to 567678 or 56161 from your registered mobile number in the following format:

UIDPAN<SPACE><12 Digit Aadhaar Number><SPACE><10 Digit PAN>

For E.g., UIDPAN 123456789000 EPOPE1234E

(b) Online:

(c) Paper mode: File one page Form along with minimal fee with the designated PAN centre. Copies of PAN card, Aadhaar card are to be furnished.

Q33. How can I link my Aadhaar number with PAN if there is minor mismatch in my name appearing in Aadhaar card and PAN?

Earlier, Income-tax Dept. was allowing linking of Aadhaar Number with PAN if there was minor mismatch in the name appearing in PAN compared to the name appearing in Aadhaar Card. Identities of taxpayers were verified by sending One Time Password (OTP) to mobile number registered with UIDAI.

However, with effect from 01-12-2017 UIDAI has discontinued the practice of verifying the user’s identity with OTP. Therefore, Aadhaar number cannot be linked with PAN if there is any mismatch in the name entry in the records of Aadhaar and PAN. Taxpayers are required to rectify either of the documents, PAN or Aadhaar card, so as to link the two records.

Q34. Why am I not able to link my Aadhaar card with PAN, though my name as per Aadhaar and PAN is same?

There are certain reasons due to which a taxpayer might not be able to link his Aadhaar number with his PAN. Some of the reasons are:

Q35. Whether my PAN will be treated as invalid if I do not link my Aadhaar number with PAN?

As per proviso to Sec 139AA(2), in case assessee fails to intimate the Aadhaar Number, the PAN allotted to the person shall be treated as invalid and the other provisions of this Act shall apply, as if the person had not been allotted PAN.

However, in case of Binoy Viswam v. Union of India [2017] 82 taxmann.com 211 the Supreme Court has partially stayed the operation of Proviso to Section 139AA(2). It held that if the assessee does not hold the Aadhaar number then PAN should not be considered invalid. However, if assessee is holding Aadhaar number he must intimate it to the Department.

Your PAN will be treated as invalid if you do not link it with Aadhaar number as the Apex Court has given relief in those cases where taxpayers did not possess Aadhaar number. However, if assessee doesn’t possess an Aadhaar card, his PAN will not be treated as invalid.

Q36. What is the last date to link Aadhaar number with PAN?

As per provisions of Section 139AA(2) every person who has been allotted PAN as on July 1, 2017, who is eligible to obtain Aadhaar, shall intimate his Aadhaar number to the department on or before a date to be notified by the Govt. The Govt. has notified September 30, 2019 as the last date for linking of Aadhaar with PAN.

Q37. I cannot get my Aadhaar number by the end of due date of filing Income-tax Return. How can I file ITR?

It is mandatory for every person, who is eligible to obtain Aadhaar number, to quote the Aadhaar number in Income-tax return form. Where the person does not possess the Aadhaar number, the Enrolment ID shall be quoted in the Income-tax return. Following assessees have been exempted from the requirement of quoting Aadhaar number or Enrolment ID:

Thus, in case an assessee doesn’t possess Aadhaar card, it is advisable for him to apply for it and quote its enrolment ID while furnishing his return of Income.

Q38. Is it mandatory to furnish Aadhaar number while filing ITR of an HUF? If yes, then whose Aadhaar number is to be provided?

Furnishing of Aadhaar number in ITR is mandatory only in case of individuals. Thus, an HUF is not required to mention Aadhaar number at the time of filing of ITR.

Presumptive Taxation

Q39. What is the rate of deemed profits in case of presumptive taxation under Section 44AD?

As per the provisions of Section 44AD the rate of deemed profit would be at 8% of total turnover or gross receipts during the previous year 2018-19. However, the rate of presumptive income would be at 6% in case of digital receipts. The benefit of reduced rate of 6% will be available only if proceeds of credit sales are received on or before due date of filing of return under Section 139(1).

Q40. I have opted for presumptive taxation scheme under section 44AD. Can I claim deduction under Section 80GG for the rent paid for let out house property?

Section 44AD of the Income-tax Act, 1961 doesn’t restrict assessee from claiming deduction available under chapter-VIA. Hence, you can claim deduction for rent paid for your own residence under section 80GG subject to the fulfilment of certain conditions prescribed under the said section.

Q41. I have opted for presumptive taxation scheme under section 44AD. During the year, I have made cash payment against business expenditure in excess of Rs. 10,000. Whether such expense shall be disallowed as per the provisions of section 40A(3)?

Section 44AD overrides provisions of section 28 to 43C. Thus, any deduction allowable under these provisions shall be deemed to have been fully allowed to assessee and further deduction or disallowance under those sections shall not be permissible. Since Section 40A(3) falls in the category of overriding sections, no disallowance can be made if any cash expenditure has been incurred by assessee in excess of Rs. 10,000.

Capital Gains

Q42. I have earned profit from sale of listed shares which were kept for more than 12 months. Whether it will be treated as capital gain or business profit?

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 sale of listed shares or other securities is taxable as capital gains or business income:

The above principles have been formulated by the CBDT with the sole objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares and securities. All the relevant provisions of the Act shall continue to apply on the transactions involving transfer of shares and securities.

CBDT has decided that the income arising from transfer of unlisted shares would be considered under the head ‘Capital gains’, irrespective of period of holding, with a view to avoid disputes/litigation and to maintain uniform approach – Letter F.No.225/12/2016/ ITA.II, dated May 2, 2016.

Q43. I have earned a profit of Rs. 2 lakhs from sale of long-term listed equity shares in the month of June 2018. Is this gain exempt from tax? Whether I have to report this gain in ITR form?

The Finance Act, 2018 introduced a new Section 112A to withdraw Section 10(38) exemption for the long-term capital gains arising from transfer of listed securities, being equity shares, units of equity oriented funds or units of business trusts. As per section 112A, long-term capital gains arising from transfer of listed securities, being equity share, units of an equity oriented fund or a units of a business trust shall be taxed at 10% in excess of Rs. 1 lakh.

The new Section 112A is applicable from Assessment Year 2019-20. Thus, you are required to report the long-term capital gain arising from sale of listed shares in ‘Schedule CG’ of Income-tax Form and pay tax at the rate of 10% on the gain exceeding Rs. 1 lakh.

Q44. I have earned profit from intra-day trading. Is it taxable as business profit or capital gain?

Intra-day trading is considered as speculation business and the income therefrom would either be speculation gain or speculation loss. Income from speculation gain is taxed at the normal rates. However, any losses arising from speculation business are to be set off only against profit of any other speculative business.

Q45. I have earned long-term capital gain of Rs. 10 lakhs which is taxable at 10% under Section 112A. I have made eligible investment of Rs. 1 lakh for Section 80C deductions. How much tax do I need to pay on such income?

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

Verification of Returns

Q46. How to verify the Income-tax return?

After filling of income tax return, the next step is to verify it. If a return is filled but not verified within permitted time, it shall be deemed as invalid return. The Income-tax Department starts processing of return only if it is verified. The Income-tax return can be verified in any of the following mode:

Q47. What are the benefits of e-filing of return via EVC?

Among other options available to verify an Income-tax return, the assessee can verify the return with Electronic Verification Code (EVC). This facility of e-verification has been initiated by the income tax department in order to reduce physical submission of signed copy of acknowledgement (i.e., ITR-V). Through this mode, you can ensure that the Income-tax return is verified immediately and you don’t need to track it if signed copy of ITR-V has been delivered successfully to CPC, Bengaluru.

Q48. How to e-Verify Income tax return by generating EVC?

EVC can be generated via following options:

1. Through Net Banking

2. Bank Account Number

EVC can be generated by Pre-validating Bank Account Details. Taxpayer needs to validate his bank account number that is linked with his PAN.

3. Demat Account Number

EVC can be generated by Pre-validating Demat Account Details. Taxpayer needs to validate his Demat account number that is linked with his PAN.

Q49. How to generate Aadhaar number based OTP to e-verify return?

Income tax return can be e-Verified by generating Aadhaar number based one-time password (OTP). Taxpayer will be required to link his Aadhaar Number with his PAN to use this facility. Aadhaar number based OTP can be generated by following steps:

Q50. I don’t want to e-Verify my return. Can I send the signed copy of acknowledgment?

E-verification of return is not mandatory. Taxpayer can get the printout of ITR acknowledgement (i.e., ITR-V), get it signed and send it to “Income Tax Department – CPC, Post Bag No – 1, Electronic City Post Office, Bangalore – 560100, Karnataka” within 120 days of uploading the return either by ordinary post or by speed post only.

If ITR-V is not submitted within stipulated period of 120 days, then it will be deemed that assessee has not filed the return of income.

If assessee is using digital signature (“DSC”) for uploading the return, it is to be registered on the website beforehand. If return is filed through DSC, assessee will not be required to send the print-out of the acknowledgement to CPC.

Q51. Whether any class has been prescribed for Digital Signature which are required for the purpose of verification of ITR?

For verifying ITR with Digital signature, the Digital Signature Certificate (DSC) should be of Class II or III only. The DSC must be issued by the CCA (Controller of certifying Authorities) approved certifying agencies in India.

Q52. I have filed my return electronically and furnished the signed copy of acknowledgement to the CPC. However, I have received a letter from CPC that said copy of acknowledgement had not been received. Since time-limit to resend the acknowledgement has already expired, whether it will be deemed that I have not filed the return?

The issue has been dealt with by the Bombay High Court in the case of Crawford Bayley & Co. v.Union of India [2011] 16 taxmann.com 323 (Bom.), wherein the Court, despite expiry of the time-limit to send the acknowledgement, allowed additional time to assessee to resend the same, since the assessee had furnished adequate material before the Court in support of its contention that having filed return electronically, it had also submitted ITR-V Form by ordinary post.

Based on the above, if you have already submitted the ITR-V to the CPC then you can resend the acknowledgement, even though the time-limit for filing ITR-V has already expired, provided you have sufficient evidences to substantiate the fact that you had sent the acknowledgement earlier within 120 days of uploading the return either by ordinary post or by speed post only. Alternatively, you can also e-verify the return by entering Electronic Verification Code.

Q53. How to know whether my e-return has been processed at CPC Bangalore?

Log on to e-filing website and click on ‘view Returns/Forms’. Then select ‘Income Tax Returns’ from the drop down option and click on submit to check the status of return.

Q54. How can I find my jurisdictional Assessing Officer?

You will get the Jurisdiction details of the PAN.

Tax payment, TDS, TCS and refund

Q55. Can I claim benefit of tax deducted in advance on income which is taxable in subsequent years?

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. Old ITR form did not have any mechanism to carry forward the excess TDS, thus, taxpayers were required to show the entire TDS as a deduction and claim refund of excess TDS. To overcome the issues, the Schedule of TDS/TCS in the ITR forms now provides columns to fill in the information of tax deducted in previous years but credit for the same is claimed in current year.

You cannot claim credit of TDS pertaining to income which is taxable in subsequent year. Thus, such TDS credit can be carried forward to subsequent year and can be claimed in the year in which income is offered to tax.

Q56. I have filed my return of income electronically but in refund/demand status it is mentioned as “refund not determined“. What does this status indicate?

This status depicts that your return is not processed. You will get status of tax-refund after your return is processed by the Income-tax department.

Q57. I have claimed tax refund by filing income-tax return but my refund claim failed as I have mentioned incorrect bank account number. How can I submit correct bank account number to claim tax refund?

You can submit your correct bank account number after selecting an option of refund reissue. Procedure to apply for refund reissue is outlined hereunder:

Q58. My employer did not deduct tax from my salary income. Whether in such case I am liable to pay tax on my salary income?

TDS is only a mode of early collection of tax. The ultimate liability of paying taxes is on the person earning income and, hence, if employer fails to deduct tax, then it is the liability of the employee to pay the tax on the same. Further, if employer has deducted less tax, then it is the liability of the employee to pay the balance tax.

Q59. How to know TAN of my deductor?

It can be found either on Form 16/16A or in Form 26AS tax credit statement available on https://www.tdscpc.gov.in/app/login.xhtml TRACES (TDS Reconciliation and Correction Enabling System) website.

Q60. Mr. X has paid taxes during the financial year. Is there any mode through which he can verify the tax payments?

Form 26AS is the statement of tax credit which enlists the details of taxes deposited or credited on account of taxpayer during the financial year. Those taxes can be in form of TDS, TCS, Advance-tax and Self-assessment tax. Thus any taxes paid or deducted on your behalf can be verified from Form 26AS.

Q61. How to proceed in case of TDS mismatch?

Even if credit for TDS as claimed in the return matches with the balance appearing in the Form 26AS, Assessing Officer may raise a demand for payment of differential amount due to TDS mismatch. The reasons for such difference could be as under:

The TDS mismatch may also be due to error in TDS return filed by deductor. In such a situation you should intimate the deductor about such an error and tell him to rectify the TDS return.

In Press Note No. 402/92/2006, dated April 17, 2014 CBDT had noted that many taxpayers commit mistakes while furnishing details of tax credit in the return of income. Such mistakes include:

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 on them 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 in case the return was processed by such officer, 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 (as defined above).

Q62. I am a salaried person. My taxable salary is Rs. 540,000 on which tax has duly been deducted under section 192. During finalization of return, I found that my bank has given me a credit of Rs. 124,500 towards interest. Please guide me how best to proceed in such case?

In this situation you have to pay the balance taxes on the interest income (or any other income) before filing of return. Balance taxes should be paid along with interest under sections 234B and 234C. The tax and interest can be paid in any authorized bank through Challan No. ITNS 280. Alternatively, it can be paid through online bank portal through following link https://onlineservices.tin.egov-nsdl.com/etaxnew/tdsnontds.jsp

Q63. I have Fixed Deposit of Rs. 150,000 in bank and my total income (including interest income that would accrue on FD) is below the taxable limit. How to avoid deduction of tax on interest income?

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

Q64. How to avoid deduction of tax, if I earn interest income of more than Rs. 10,000 from saving deposits and my total income including such interest income would be below the taxable limit?

Tax shall be deducted from the amount of interest payable on time deposits if it exceeds Rs. 10,000. Any interest payable in respect of saving deposits shall not attract any TDS. With effect from Assessment Year 2020-21, no tax shall be deducted if interest earned on time deposits doesn’t exceed Rs. 40,000.

Q65. My Return has been processed and it shows ‘Outstanding Tax Demand’. What should I do now?

A facility has been made available to taxpayers on the E-filing website (i.e., www.incometaxindiaefiling.gov.in) to provide online responses to such demands. The actions required to be performed by the taxpayer are as under:

Q66. Income-tax department has raised a demand against Mr. A for the Assessment Year 2018-19. Mr. A didn’t pay the tax demand. He filed ITR for next assessment year in which refund was claimed. Whether refund claimed by Mr. A can be adjusted against his pending tax demand?

The CBDT has framed centralized scheme wherein all e-filed returns are processed by the central processing centre (CPC), Bangalore. CBDT has empowered the CPC to make adjustment of tax demand against the tax refunds due to assessee. Thus, refund claimed by Mr. A can be adjusted with the demand standing against him for the Assessment year 2018-19.

Q67. Whether I need to pay fee under Section 234F if there is a delay in filing of income-tax return for AY 2019-20?

The Finance Act, 2017 has introduced a new section 234F to levy fees if 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 as follows:

After introducing this new provision, the assessees shall be required to pay the late filing fees under section 234F along with interest under section 234A, 234B and 234C before filing of return of income. The Income-tax Dept. shall not be required to initiate the penalty proceedings separately to levy such fees on late filers. The details of fees levied under Section 234F shall be reported in Part B TTI.

Q68. Income of Mr. Y is less than the maximum exemption limit. He wants to file his return of income after the expiry of due date. Whether he shall be liable for payment of Section 234F fee?

Fees under section 234F is levied if assessee files Income-tax return after expiry of due date. The section levies penalty only on those assessees who are required to file return under section 139. If income of assessee doesn’t exceed the maximum exemption limit then he is not required to file income-tax return under section 139. Therefore, Mr. Y isn’t required to pay fees under Section 234F for delay in filing of Income-tax return.

Q69. I have received cash gift of Rs. 100,000 from my childhood friend. Am I required to disclose the gift in my return of income?

As per section 56(2)(x), gifts received from relatives are fully exempt from tax. However, gifts received from non-relatives are taxable if they exceed Rs. 50,000. The term ‘relative’ is defined in section 56(2)(x) and it doesn’t include a friend. Therefore, cash gift of Rs. 100,000 is taxable in your hand and you will be required to report taxable gifts under ‘Schedule OS’ of ITR Forms.

Q70. I am getting parking charges from my plot of land. Whether this income is taxable under the head income from house property?

Parking Charges will form part of your taxable income and same shall be taxable under the head ‘Income from other sources’, because rental income from land is not taxable under the head income from house property.

Q71. I am a non-resident filing Income-tax return in India. I don’t maintain any bank account in India. Can I get my tax refund in any foreign bank account?

Up to Assessment Year 2018-19, a taxpayer was required to mention the details of his saving/current account in ITR forms in order to get Income-tax refund. Thus, a non-resident, who didn’t maintain any bank account in India, was required to open a bank account in India to get the refund. Considering the hardships faced by the non-resident taxpayers, the Income-tax dept. has allowed giving tax refund in the foreign bank account of non-resident taxpayers from Assessment Year 2019-20. Non-residents are required to mention:

Q72. What is the time limit for raising refund reissue request?

There is no time limit prescribed under Income-tax Act for raising request for reissue of refund. However, if refund re-issue request is made for delay of more than a month, then it may be possible that Dept. will not give the interest for the delayed period due to refund reissue request. In such case you have to approach your Assessing Officer for claiming interest on balance period.

Q73. I have received communication from Dept. that tax refund couldn’t be granted due to some error in bank account details. The e-filing portal asks for furnishing of EVC or DSC for raising refund re-issue request. Is there any alternative for getting refund re-issue without providing EVC or DSC?

A request for re-issue of refund can be raised only if taxpayer is able to generate EVC or verify the re-issue request via DSC. There is no alternative available in hands of taxpayer if he is not able to generate EVC or isn’t having DSC.

Q74. My tax liability for Financial Year 2018-19 was Rs. 9,900. If I pay my tax dues before the due date of filing of ITR and file ITR after due date, whether I will be liable for payment of interest under section 234A for late filing of ITR?

Section 234A imposes interest for delay in filing of ITR. It provides that interest at the rate of 1% per month or part of the month shall be levied on the tax amount outstanding if taxpayers file the return after the due date. The tax amount outstanding shall be calculated after reducing all taxes paid by assessee through TDS, Advance tax, TCS, tax relief etc. However, it doesn’t allow reduction of self-assessment tax paid.

However, the Supreme Court in the case of CIT vs. Pranoy Roy [2009] 179 Taxman 53 (SC) has held that no interest under section 234A shall be levied in case total tax has been paid by assessee by the due date of filing of ITR. Thus, you are not required to pay interest under section 234A for delayed filing of ITR.

However, the Income-tax department doesn’t give the benefit of the Supreme Court’s judgment. It can be witnessed from the e-filing utility which computes interest under this provision till the date of filing of return and ignores the date of payment of self-assessment tax. The interest so computed by the utility cannot be changed by the assessee.

Deductions & Rebate

Q75. What is Section 87A rebate and who can claim it?

An individual who is a resident of India and whose total income does not exceed Rs. 3,50,000 is entitled to claim rebate under section 87A. Rebate under section 87A is available in the form of deduction from the tax liability. Rebate will be lower of 100% of income-tax liability or Rs. 2,500. In other words, if the tax liability exceeds Rs. 2,500, rebate will be available to the extent of Rs. 2,500 only and no rebate will be available if total income (i.e., taxable income) exceeds Rs. 3,50,000.

Q76. I am a Govt. employee and have received arrears of salary as per recommendations of 7th pay commission. Whether I need to file any form to claim relief under Section 89 in my income-tax return?

If you want to claim relief under 89, it is mandatory to file Form 10E online on the e-filing website. Taxpayers who claim relief under Section 89 without filing Form 10E, will get 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.

Q77. My employer has deducted tax without allowing relief of Section 89. Can I claim the relief while filing the return of income?

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 refund of excess tax deducted. However, it is mandatory to file Form 10E online on the e-filing website.

Q78. How to file Form 10E?

Form 10E can be filed online. Login to https://incometaxindiaefiling.gov.in with your User ID and password. After you log in, click on tab e-File > Income Tax Forms. On the landing page select the following options:

Form Name: Form No. 10E – Form for relief u/s 89

Assessment Year: 2019-20

Submission Mode: Prepare and Submit Online

Q79. I failed to submit rent receipt and proof of tax saving investment to my employer due to which HRA exemption and certain other deductions were not given to me. How can I claim refund of such excess tax paid, as the tax deducted from my salary income is higher than my actual tax liability?

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, yet they can be claimed in the Income-tax return. Accordingly, the excess tax deducted by employer can be claimed as refund.

Q80. I am a salaried class person living in a rented premises. The HRA component in my CTC is less than the actual rent paid. Can I claim section 80GG deduction in respect of such excess rent?

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

Q81. How to claim deduction of donation given to an organization registered under section 80G?

If you have given donation to an organization registered under section 80G you can claim deduction by filing the return of income wherein you are required to provide following details:

Q82. I have filed my return of income; however, I omitted to claim benefit of section 80C deduction. How should I proceed to claim this benefits?

The benefit of an omitted claim can be availed only by filing a revised return. You may revise your return of income before the end of the relevant assessment year or before completion of assessment, whichever is earlier. With effect from Assessment Year 2017-18, a belated return can also be revised if there is any omission or wrong statement in the return of income.

Q83. I am a salaried person, drawing House Rent Allowance (‘HRA’) of Rs. 2,900 per month. Do I need to furnish rent receipt to employer for claiming exemption of HRA?

Though actual expenditure on payment of rent is a prerequisite for claiming deduction of HRA, yet as an administrative measure salaried employees drawing HRA of up to Rs. 3,000 per month are exempted from production of rent receipt to employer.

However, this concession is only for the purpose of tax-deduction at source. In the regular assessment of the employee, the Assessing Officer will be free to make such enquiry as he deems fit for the purpose of satisfying himself that the employee has incurred actual expenditure on payment of rent.

Q84. Whether it is mandatory to furnish PAN of the landlord to employer for claiming exemption of HRA?

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

Set-off of losses

Q85. I am a part time employee and am also running a provision store. I suffered loss in business. Can I adjust the business loss against my salary income?

Loss from business/profession cannot be adjusted with salary income. Hence, you cannot adjust the business loss against your salary income.

Q86. I sold gold after holding it for 13 months and suffered loss thereon. Can I adjust this loss against my salary income?

Loss on sale of capital asset is termed as capital loss and capital loss can be adjusted against capital gains only. Hence, loss on sale of gold cannot be adjusted against salary income.

Q87. I have earned salary income of Rs. 800,000 during the Assessment Year 2019-20 and am also having loss of Rs. 300,000 from house property. Can I set-off loss from house property against my salary income?

Section 71 allows set-off of losses from house property against any other income. However, w.e.f. Assessment Year 2018-19, 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 loss of Rs. 200,000 can be adjusted against your salary income and loss of Rs. 100,000 shall be carried forward for set-off in subsequent years.

Q88. I have long term capital loss of Rs. 70,000 from sale of listed equity shares. Whether same can be allowed to be set off or carried forward?

Up to Assessment Year 2018-19, any long-term capital gain arising from transfer of listed equity shares was fully exempt from tax under section 10(38). Since the gain was exempt from tax, any loss arising from such transfer had no treatment under Income-tax Act. However, the Finance Act, 2018 withdrew this exemption by inserting a new Section 112A with effect from Assessment Year 2019-20. Tax is levied under this provision at the concessional rate of 10% on long-term capital gains arising from transfer of said securities, if long-term capital gain exceeds Rs. 1 lakh.

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

Clubbing of Income

Q89. Income of Mrs. A is clubbed in hands of Mr. A. Whether Mrs. A is liable for filing of ITR?

As income of Mrs. A is clubbed with income of Mr. A, same wouldn’t be included again in the income of Mrs. A. Thus, if Mrs. A doesn’t have income exceeding maximum exemption limit not chargeable to tax, she is not liable to file ITR.

Q90. My daughter is 15 years old and has earned income amounting to Rs. 1000,000 by participating in skill based competition. She does not have PAN. Is she required to file ITR for the concerned year?

Any income that accrues or is paid to minor is added to the income of parents. However, if a minor child earns any income by application of his skill, talent or specialized knowledge and experience, it is excluded from clubbing provision. Minor child is assessable on such income through his guardian.

Thus, 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 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 in Item 14.

Q91. My father died on August 1, 2017. I received some income in his name during the Financial Year 2018-19. My father failed to write his will before dying and the partition has not yet been taken place with respect to his property. In whose hands, such income will be taxed?

In case of intestate death, any income arising in the hands of the deceased person is taxable in the hands of his legal heirs.

Q92. Mr. X died on 23rd August, 2018. He had received salary income amounting to Rs. 12 lakhs before dying for the period starting from April 1, 2018 to 22nd August, 2018. After his death, some interest income has accrued in his name amounting to Rs. 10,000. Is ITR required to be filed for the relevant year?

Yes, filing of return is must in this case. A person is exempt from filing of return only if his total income doesn’t exceed maximum exemption limit. The liability to file ITR in case of Mr. X would be as follows:

If Mr. X had prepared the will before his death, then executor is required to file ITR before distribution and thereafter deceased legal representatives are required to file his return in their personal capacity.

However, if Mr. X had not prepared his will before his death, his legal heirs are required to file ITR in their own capacity.

Thus, Rs. 10,000 shall be added to income of legal representative or legal heirs, as the case may be.