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2019

Obligation of an Assessee to file Income-Tax Return

Obligation of an Assessee to file Income Tax Return

It is generally believed by most people that a person needs to file Income Tax Return only if the total income of such person exceeds maximum amount not chargeable to tax. However, we must bear in mind that there are certain other conditions as well which necessitates a person to file his/her income tax return even though his/her total income does not exceed prescribed limit. Hence, even if your income is less than Rs. 2,50,000, you may be required to file income tax return.

One such reason commonly known to all of us is carry forward of losses. If you have incurred any losses in the current financial year and if you wish to carry forward the same in the next financial year, it is necessary to file ITR. Apart from this, there are many other factors which may necessitate an assessee to file his/her income tax return.

The Finance (no. 2) Bill, 2019 now proposes set of parameters for person’s enjoying benefit of threshold limit of exemption from tax; fulfillment of such parameters will now cast an obligation on such person to file his/her return of income even if the total income is less than the maximum amount not chargeable to tax. We are going to discuss such conditions in this article.

Conditions for Filing Income Tax Return:

Type of Assessee: Individual / HUF / Association of Persons (AOP) / Body of Individuals (BOI) and Artificial Judicial Persons:

Condition 1: The total income exceeds maximum amount not chargeable to tax. Such income is to be calculated before taking any of the following benefit:

a) Deductions like life insurance premium, investment in provident fund, etc are claimed; or
b) Where a specified asset is sold and any deduction is claimed for investments made in house property, notified bonds, and such other specified deductions; or
c) Before claiming exemption available, if any on sale of listed securities held for a period more than 12 months and securities transaction tax is paid on such transactions; or
d) Specified exemptions.

 

Condition 2: Has deposited an amount or aggregate of the amounts exceeding Rs. 1 crore rupees in one or more current accounts held with a banking company or co-operative banks:

Condition 3: Has incurred an expenditure of an amount or aggregate of the amounts exceeding Rs 2 lacs for himself or any other person for travel to a foreign country, however, travel to neighboring countries or to such places of pilgrimage as the may be specified will not be considered as foreign travel;

Condition 4: Has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption of electricity;


Condition 5: Has incurred a loss either in business or on the investments held by him and desires that such loss be carried forward in future years.

Condition 6: Is a resident and who at any time during the previous year:

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

 

Condition 7: He/she fulfills such other conditions as may be prescribed.

Note:
Conditions mentioned in serial no 2, 3, 4 & 7 above are proposed by the Finance (No. 2) Bill, and shall be applicable once the Bill receives the assent of the President.

 

Type of Assessee: For Firms and Company:

  • They are mandatorily required to file their return of income for each assessment year.

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