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Provisions related to Income Tax Returns for F.Y. 2020-21

It is mandatory for every taxpayer to communicate the details of his income to the Income-tax Department. These details are to be furnished in the prescribed form known as return of income. In this part, you can gain knowledge about the various provisions relating to return of income.

Person required to file the return of income

The provisions relating to filing of return of income depend upon the status of the taxpayer. The position in this regard is given below:

In the case of companies:

Every person, being a company, has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every company to file the return of income irrespective of its income or loss.

In the case of partnership firms:

Every person, being a partnership firm (including Limited Liability Partnership), has to file its return of income compulsorily, irrespective of its income being profit or loss. In other words, it is mandatory for every partnership firm to file the return of income irrespective of its income or loss.

In the case of an Individual/HUF/AOP/BOI/Artificial Juridical Person:

Every individual/HUF/AOP/BOI/artificial juridical person has to file the return of income if his total income (including income of any other person in respect of which he is assessable) without giving effect to the provisions of section 10(38), 10A, 10B, 10BA 54, 54B, 54D, 54EC, 54F, 54G, 54GA, or 54GB or Chapter VIA (i.e., deduction under section 80C to 80U), exceeds the maximum amount which is not chargeable to tax i.e. exceeds the exemption limit.

In the case of charitable or religious trusts:

Every person in receipt of income derived from property held under charitable or religious trusts/legal obligations or in receipt of income being voluntary contributions referred to in section 2(24)(iia), has to file the return of income if its total income without giving effect to the provisions of sections 11 and 12 exceeds the maximum amount not chargeable to income-tax.

In the case of political parties:

The Chief Executive Officer of every political party has to file the return of income of the party if the total income of the party without giving effect to the provisions of section 13A exceeds the maximum amount not chargeable to income-tax.

In the case of certain associations :

Following entities are liable to file the return of income if their total income without giving effect to the provisions of section 10 exceeds the maximum amount not chargeable to tax:

- Research association referred to in section 10(21)
- News agency referred to in section 10(22B)
- Association or institution referred to in section 10(23A)
- Person referred to in clause (23AAA) of section 10.
- Institution referred to in section 10(23B)
- Fund/institution/trust/university/other educational institution/any hospital/medical institution referred to in sub-clause (iiiac), (iiiab), (iiiad), (iiiae), (iv), (v), (vi) or (via) of section 10(23C)
- Mutual Fund referred to in clause (23D) of section 10
- Securitisation trust referred to in clause (23DA) of section 10
- Investor Protection Fund referred to in clause (23EC) or clause (23ED) of section 10.
- Core Settlement Guarantee Fund referred to in clause (23EE) of section 10
- Venture capital company or venture capital fund referred to in clause (23FB) of section 10;
- Trade union/association referred to in sub-clause (a) or (b) of section 10(24)
- Board or Authority referred to in clause (29A) of section 10.
- Body/authority/Board/Trust/Commission referred to in section 10(46)
- Infrastructure debt fund referred to in section 10(47)

In the case of certain university, college or other institution:

Every university, college or other institution referred to in clause (ii) and clause (iii) of section 35(1), which is not required to furnish return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.

In the case of Business Trust

Every business trust, which is not required to furnish return of income or loss under any other provision of the Act, shall furnish the return of income every year, irrespective of income (or) loss.

In case of investment fund referred to in section 115UB

Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions, shall furnish the return of income in respect of its income or loss every year irrespective of income (or) loss In the case of persons holding assets located outside India:

A person, being a resident in India (other than not ordinarily resident), who is not required to furnish a return under any of the above `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 igning 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,

shall furnish, on or before the due date, a return in respect of his income or loss for the previous year in such form and verified in such manner and setting forth such other particulars as may be prescribed. However, above discussed provision will not apply to an individual, being a beneficiary of any asset (including any financial interest in any entity) located outside India where, income, if any, arising from such asset is includible in the income of the person referred to in (a) above.

(*) “Beneficial owner” in respect of an asset means an individual who has provided, directly or indirectly, consideration for the asset for the immediate or future benefit, direct or indirect, of himself or any other person.

(*) “Beneficiary” in respect of an asset means an individual who derives benefit from the asset during the previous year and the consideration for such asset has been provided by any person other than such beneficiary.

Mandatory filing of return in certain cases

With effect from Assessment Year 2020-21, it is mandatory for every person (other than a company or a firm), who is not required to furnish return of income under any other provision of section 139(1), to file return of income if during the previous year he:

1. Has deposited an amount (or aggregate of amount) in excess of Rs. 1 crore in one or more current account maintained with a bank or a co-operative bank.
2. Has incurred aggregate expenditure in excess of Rs. 2 lakh for himself or any other person for travel to a foreign country.
3. Has incurred aggregate expenditure in excess of Rs. 1 lakh towards payment of electricity bill.
4. Fulfils such other conditions as may be prescribed.