FILING OF INCOME TAX RETURNS Assessment Year corresponding to Financial Year

Transcription

1 FILING OF INCOME TAX RETURNS Assessment Year corresponding to Financial Year Presented by: CA Bhadresh Doshi & CA Siddharth Banwat

2 PRESENTATION SNAPSHOT INTRODUCTION MANDATORY FILING OF ITR SELECTION OF ITR FORM FILLING UP ITR FORMS DISCLOSURE REQUIREMENTS FOREIGN ASSETS/BANK ACCOUNTS PROCEDURE OF FILING RETURNS ONLINE DUE DATES SELECT AMENDMENTS MADE BY FINANCE ACT, 2015

3 FRUSTRATING FACTS Analysis of Individual Tax Payers Effective assessees (filing ITR or faced with tax deduction) less than 5 cr (about 4% of population) Analysis of returns filed for AY Individuals filing returns 2.88 cr only about 65% of effective assessees Zero Tax Returns 1.62 cr (56%) Paying tax < ` 1,50, cr (39%) Only about 14 lakhs individuals paying yearly tax of more than ` 1,50,000 Avg. Income per Return ` 3.76 lakhs Avg. Tax per Return ` 40,000

4 MONITORING SYSTEM Non-Filer Monitoring System lakhs cases identified lakhs returns were filed subsequent to notice ` crores additional taxes collected Sending s & SMS to PAN holders having registration with different other departments Black Money Act Income Declaration Scheme 2016

5 WHO IS REQUIRED TO FILE RETURN? SECTION 139

6 MANDATORY FILING OF ITR Company Partnership Firm or LLP Other persons If total income before considering deductions under Chapter VI-A exceeds maximum amount not chargeable to tax Specified entities covered by Sec. 139(4A) to 139(4F) Trusts, Political Parties, Investment Funds etc. New Additions by FA, University or Educational Inst. referred to in Sec. 10(23C)(iiiab) and Hospital or Medical Inst. referred to in Sec. 10(23C)(iiiac) wholly or substantially financed by the Government

7 MANDATORY FILING OF ITR Resident person (not being NOR) who is (at any time during PY) Holding any asset located outside India As a beneficial owner or otherwise Including any financial interest in any entity Having signing authority in any account located outside India A Beneficiary of any asset (including financial interest) located outside India

8 SELECTION OF FORMS RULE 12

9 HC S DIRECTIONS TO CBDT Avinash Gupta vs. UOI (Del) the respondents are directed to, with effect from the next assessment year, at least ensure that the forms etc. which are to be prescribed for the Audit Report and for filing the ITR are available as on 1 st April of the assessment year unless there is a valid reason therefor Vishal Garg vs. UOI (P & H) similar directions Forms were notified on Notification No. 24/2016

10 SELECTION OF ITR FORM INDIVIDUAL/HUF Sahaj # [ITR-1] ITR-4 ITR-2 Individual / HUF Sugam [ITR- 4S] ITR-2A ITR-3 # ITR-1 is available only for individual

11 SELECTION OF ITR FORM INDIVIDUAL/HUF No ITR-1 [Sahaj] ITR-2A ITR-2 Profits & Gains of Business or Profession? Yes ITR-4S [Sugam] ITR-3 ITR-4

12 SELECTION OF ITR FORM INDIVIDUAL/HUF Income ITR-1 ITR-2A ITR-2 ITR-4S ITR-3 ITR-4 Salary House Property Business Capital Gain Other Source Indicates that such income can be included but subject to specified restrictions

13 SAHAJ ITR-1 Only for Individual Type of income acceptable Salaries or family pension House property (not more than one & not having b/fd loss) Other sources (excluding winning from lottery or income from race horses) should not be a loss Ordinarily Resident should not have assets (including financial interest in any entity) located outside India signing authority in any account located outside India income from any source outside India No double tax relief u/s. 90 / 90A / 91 Agricultural income ` 5,000

14 ITR-2A Available for both Individual or HUF Not having capital gain and business income Ordinarily Resident should not have assets (including financial interest in any entity) located outside India signing authority in any account located outside India income from any source outside India No double tax relief u/s. 90 / 90A / 91

15 SUGAM ITR-4S Business income as per Sec. 44AD / 44AE No b/fd business loss No other business income & no capital gains House Property not more than one & no b/fd loss Other Sources excluding winning from lottery or income from race horses Ordinarily Resident should not have assets (including financial interest in any entity) located outside India signing authority in any account located outside India income from any source outside India No double tax relief u/s. 90 / 90A / 91 Agricultural income ` 5,000 Available for a partnership firm also w.e.f. AY 16-17

16 ITR-3 Available for both Individual or HUF Assessee should be a partner in a firm / LLP Should not have any business income other than interest / remuneration from a firm / LLP No other restrictions

17 SELECTION OF ITR FORM - OTHERS Partnership Firm ITR-5 generally Sugam [ITR-4S] Applicable from A.Y Business income is computed as per Sec. 44AD / 44AE Subject to other restrictions as applicable Company ITR-6 Person required to file return u/s. 139(4A), (4B), (4C), (4D), (4E), (4F) ITR-7 Others [LLP, AOP, BOI, Co-operative Society, Local Authority, Artificial Juridical Person] ITR-5

18 LET S DECODE ITR ITR-1 TO ITR-7

19 CHANGES IN CONTENT SCHEDULE AL Press Release dated Wealth-tax has been abolished Information required to be submitted in WTR will now form part of ITR Schedule AL Details of Asset & Liability at the end of the year Applicable where total income < ` 50 lakhs All ITRs ITR-1, ITR-2, ITR-2A, ITR-3, ITR-4, ITR-4S Not applicable to firm filing ITR-4S

20 CHANGES IN CONTENT SCHEDULE AL List of Assets exhaustive or illustrative? No scope to enter the value of any other asset Instruction [ITR-3/ITR-4] Personal effects not to be reported but other than a, b, c & d of Movable Asset in the schedule no scope to mention any other movable asset at all(?) Assets located outside India to be included? ITR-1, ITR-2A, ITR-4S not applicable in case of Ordinarily Resident Instruction NR & Not Ordinarily Resident only assets located in India are to be mentioned Ordinarily Resident overlapping between Schedule FA & Schedule AL?

21 CHANGES IN CONTENT SCHEDULE AL Format of Schedule AL differs ITR-1, ITR-2, ITR-2A, ITR-4S Concise ITR-3, ITR-4 Detailed Disclosure of Assets missing in ITR-1, ITR-2, ITR-2A, ITR-4S Bank (including deposits) Shares and securities Insurance policies Loans and Advances given Archaeological collections, drawings, painting, sculpture or any work of art Such assets are to be excluded?

22 SCHEDULE AL ITR-1/ITR-2/ITR-2A/ITR-4S

23 SCHEDULE AL ITR-3/ITR-4

24 CHANGES IN CONTENT SCHEDULE AL Value of assets to be mentioned If asset was forming part of WTR filed at anytime value as per WTR + cost of improvement incurred thereafter Otherwise Asset became property under any mode specified u/s. 49(1) Cost of previous owner + cost of improvement incurred by previous owner as well as assessee If cost of previous owner is not ascertainable value as per circle rate or bullion rate as on date on which it became the property of the assessee and increased by cost of improvement thereafter; or 31 st March, 2016 In any other case cost price of such asset to the assessee

25 CHANGES IN CONTENT SCHEDULE ICDS Notification No. 32 dated Income Computation & Disclosure Standards (10) are notified Applicable for computing business income or income from other sources Applicable if mercantile system of accounting is followed Income to be computed in accordance with ICDS irrespective of ITR Form applicable ITR-4, ITR-5 & ITR-6 requires a separate quantification as per ICDS

26 CHANGES IN CONTENT SCHEDULE ICDS Part A OI Item No. 3 Effect on the profit because of deviation, if any, as per ICDS notified under section 145(2) Mandatory where audit u/s. 44AB is applicable Optional for others Auto-populated figure from Schedule ICDS Schedule ICDS Optional for assessees not falling u/s. 44AB One ICDS one figure Reporting only in case of deviation from ICDS Impact of each ICDS on both i.e. PGBP + IFOS May be positive or negative (ICDS resulting into additional deduction)

27 CHANGES IN CONTENT SCHEDULE ICDS Schedule BP does not capture figure automatically from Item No. 3 of Part A OI May be due to its impact over Schedule BP as well as Schedule IFOS Schedule BP to start with PBT as per P & L A/c and adjust the net impact of ICDS If positive (addition) Item No. 23 Any other item of addition u/s. 28 to 44DA If negative (deduction) Item No. 32 Any other amount allowable as deduction

28 CHANGES IN CONTENT SCHEDULE PTI Schedule PTI is incorporated in all ITR Forms except for ITR-1 & ITR-4S Details of pass through income of a unit holder From a Business Trust Sec. 115UA As per Form 64B From an Investment Fund Sec. 115UB As per Form 64C How to incorporate the income under the respective heads? Required details are not available with the unit holder E.g. Sch HP - address of property, tenant; Sch CG consideration, cost etc.

29 CHANGES IN CONTENT NEW DEDUCTIONS Individual Additional deduction u/s. 80CCD(1B) for contribution to National Pension System effective from A.Y Own contribution Not exceeding ` 50,000 Over and above deduction u/s. 80CCD(1) No double deduction Not subject to overall limit of ` 1,50,000 as per Sec. 80CCE ITR Forms Deduction to be separated u/s. 80CCD(1) & 80CCD(1B) To ensure maximum deduction

30 CHANGES IN CONTENT NEW DEDUCTIONS Deduction u/s. 32AD ITR-4, ITR-5 & ITR-6 Setting up of an undertaking or enterprise on or after In notified backward area in the State of Andhra Pradesh, Bihar, Telangana, West Bengal Engaged in manufacturing or producing of any article or thing Acquires and installs new plant or machinery of actual cost of such plant or machinery

31 CHANGES IN CONTENT NEW DEDUCTIONS Deduction u/s. 36(1)(xvii) ITR-5 Co-operative society Manufacturing sugar Expenditure for purchase of sugarcane at a price price fixed or approved by the Government Deduction u/s. 80JJAA added in ITR-4,ITR-5 Earlier available only to an Indian company Now available to all types of assessee of Additional Wages Wages paid to new regular workmen in excess of 50 workmen employed during the PY

32 CHANGES IN CONTENT MAT Reference to P & L A/c in accordance with Part II of Schedule III to the Cos. Act, 2013 Share in income of AOP/BOI on which no tax is payable as per Sec. 86 Income to be reduced Related expenditure to be added Adjustments regarding Notional gain/loss on exchange of shares of SPV against units of business trust [Sec. 47(xvii)] Notional gain as result of change in carrying amount of units Actual gain / loss arising on transfer of units computed with reference to the cost of shares of SPV

33 CHANGES IN CONTENT MAT FA, 2016 retrospective amendment MAT u/s. 115JB not applicable to a foreign company if India has DTAA with its home country and it does not have a PE in India as per that DTAA In case no such DTAA exists, such foreign company is not required to seek registration under any law relating to companies Other foreign companies where MAT applies Capital gains from securities, interest, royalty, FTS to be reduced if otherwise taxable at a rate < 18.5% Related expenditure to be added

34 CHANGES IN CONTENT ITR-7 ITR-7 is Extended to University / Educational Institution / Hospital / Medical Institution eligible for exemption u/s. 10(23C)(iiiab) / (iiiac) Advancement of any other object of general public utility % of receipts from commercial activities to total receipts to be mentioned In case of change in the objects/activities date of such change should also be mentioned Details of submission of Form 9A for exercising option to apply the income in subsequent year as per clause (2) of Explanation to Section 11(1)

35 CHANGES IN CONTENT MISCELLANEOUS TCS ITR-1, ITR-2, ITR-2A amended Allowing credit of TCS Incorporating Schedule TCS Auditing under other Act Incorporated in ITR-5 & ITR-6 If liable for audit under any Act other than IT Act To mention Act, Section & Date of furnishing of audit report If more than one details of all should be mentioned Details of Transfer Pricing Audit In ITR-3 & ITR- 4, partner has to mention whether TP Audit is applicable to the partnership firm or not

36 CHANGES IN CONTENT MISCELLANEOUS ITR-4S Deduction of salary & interest paid to partners Schedule EI [Exempt Income] of ITR-3, ITR-4, ITR- 5 & ITR-6 - Till last year a separate item to mention share in total income of firm/aop/boi Removed in this year s forms Should be included in other exempt income?

37 DO S & DON TS Form 26AS Reconciliation with the amounts reported Ensure completeness B/fd losses dates of filing of return Having business income fill up Balance Sheet and Profit and Loss Account Fill up corresponding schedules Schedule 80G for Donations Give details of sub-items (inner columns) Bad Debts more than & less than ` 1 lakh with or without PAN

38 Ensure consistencies DO S & DON TS Internal throughout the return Mentioning correct business code that is eligible for presumptive taxation in case of ITR-4S With Tax Audit Report Sec. 143(1) provides for adjustment on account of disallowance of expenditure indicated in the audit report With other returns like VAT, Service Tax etc. e-sahyog Turnover reported in Service Tax Return vs. Gross Turnover in ITR With ITR of other related persons Co-owners of property

39 ISSUES Claims which are not allowed in the current formats Such as - Exemption u/s. 54EC against STCG of a long-term depreciable asset How to achieve the desired results? Disclosures Statutory requirement ICDS Voluntary avoiding penal consequences Where? & How?

40 DISCLOSURE REQUIREMENTS FOREIGN ASSETS/FINANCIAL INTEREST/BANK ACCOUNTS

41 IMPORTANT DEFINITIONS Beneficial Owner As per explanation 4 to section 139(1) of the Income tax Act, 1961 "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 Business trust As per explanation 5 to section 139(1) of the Income tax Act, 1961 "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 As per section 2(13A), "business trust" means a trust registered as,- (i) an Infrastructure Investment Trust under the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992); or (ii) a Real Estate Investment Trust under the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), and the units of which are required to be listed on recognised stock exchange in accordance with the aforesaid regulations;]

42 IMPACT OF NON-FILING OF RETURN OF INCOME UNDER BLACK MONEY ACT As per section 4 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 if any income from a source located outside India: a) remains undisclosed in Return of Income filed u/s. 139 of ITA; or b) no return of income is filed u/s. 139 where return is required to be filed, then such income shall fall within the scope of undisclosed foreign income and asset for any previous in which such income/asset comes to notice of the AO.

43 FOREIGN ASSET [FA] SCHEDULE (PART A) FA Schedule FA Details of foreign assets and Income from any source outside India Details of Foreign Bank Accounts held (including any beneficial interest) at any time during the A previous year Sr No Country Code Name of the Bank Address of the Bank Name mentioned in the account Status- Owner/ Beneficial owner/ Beneficiary Account Number Account opening date Peak Balance during the year (in Rupees) Interest accrued in the account Interest taxable and offered in this return Amoun Schedul Item t e where num offered ber of sche dule (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) 1 (Select) 2 (Select) 3 (Select) 4 (Select)

44 FOREIGN ASSET [FA] SCHEDULE (PART A) What information is to be provided in respect of Foreign Bank Account? a) Country code i.e. place where the bank account is opened. b) Name & Address of the Bank: Current name and address c) Name of account holder: All the names appearing in the account to be disclosed (Ex: If joint names, then disclosure of full name required) d) Status: Owner or Beneficial Owner or Beneficiary e) Account Number: Depends from bank to bank (some accounts are identified with unique identification number) f) Account opening date: Effective date when account was opened g) Peak Balance: Peak balance at any time during the financial year in respective currency as appearing in the bank account statement duly converted into INR applying SBI-TT Buying rate as prescribed from time to time h) Interest Accrued: Amount of interest accrued during the financial year is to be reported irrespective of the fact whether such interest is offered to tax in the current year. i) Details of interest offered to tax

45 FOREIGN ASSET [FA] SCHEDULE (PART B) B Details of Financial Interest in any Entity held (including any beneficial interest) at any time during the previous year Sr Country No Code Nature of entity Name of the Entity Addres s of the Entity Nature of Interest- Direct/ Beneficial owner/ Beneficiar y Date since held Total Invest ment (at cost) (in rupee s) Income accrue d from such Interes t Natur e of Incom e Income taxable and offered in this return Amount Schedule where offered Item number of schedul e (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) 1 (Select) 2 (Select) 3 (Select) 4 (Select)

46 FOREIGN ASSET [FA] SCHEDULE (PART B) What information is to be provided in respect of Financial Interest? a) Country code i.e. place where the entity is registered b) Nature of entity: Existing name and address c) Name of the Entity: Name as appearing in the Certificate of Incorporation d) Nature of Interest: Direct or Beneficial Owner or Beneficiary e) Date since held: Date on which financial interest in the entity was created f) Total Investment: Total cost of investment made duly converted in INR by applying SBI-TT Buying rate as prescribed from time to time g) Income Accrued: Amount of income accrued during the financial year from such financial interest held in any entity outside India h) Nature of Income: Dividend, capital gains etc. i) Details of amounts offered to tax

47 FOREIGN ASSET [FA] SCHEDULE (PART C) Details of immovable property held (including any beneficial interest) at any time during C the previous year Sr No Country Code Address of the Property Date of acquisitio n Nature of Income Income taxable and offered in this return Ownershi p Direct/ Beneficial owner/ Beneficia ry Total Investme nt (at cost) (in rupees) Income derived from the property Amount Schedul e where offered Item numbe r of schedul e (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 1 (Select) 2 (Select) 3 (Select) 4 (Select)

48 FOREIGN ASSET [FA] SCHEDULE (PART C) What information is to be provided in respect of Immovable Property? a) Country code i.e. place where the entity is registered b) Address of Property: Postal address c) Ownership: Direct or Beneficial Owner or Beneficiary d) Date of acquisition: Date when the property has been acquired e) Total Investment: Total cost of investment in such immovable property duly converted in INR by applying SBI-TT Buying rate as prescribed from time to time f) Income derived from Property: Amount of income derived during the financial year from such immovable property (such as rental income) g) Nature of Income: Rental, compensation, any other charges recovered for use of property. h) Details of amounts offered to tax

49 FOREIGN ASSET [FA] SCHEDULE (PART D) Details of any other Capital Asset held (including any beneficial interest) at any time D during the previous year Sr Countr Nature Ownership- Date Total Income Nature of Income taxable and offered No y Code of Asset Direct/ of Investmen derived Income in this return Beneficial acquis t (at cost) from the Amount Schedule owner/ Beneficiary ition (in rupees) asset where offered Item number of schedule (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 1 (Select) 2 (Select) 3 (Select) 4 (Select)

50 FOREIGN ASSET [FA] SCHEDULE (PART D) What information is to be provided in respect of any other capital asset? a) Country code i.e. place where the entity is registered b) Nature of capital asset: Capital asset not specifically covered under clauses A, B & C [For Example: paintings, antiques, gold, bullion, vehicle etc.] c) Ownership: Direct or Beneficial Owner or Beneficiary d) Date of acquisition: Date when the property has been acquired e) Total Investment: Total cost of investment in such capital asset duly converted in INR by applying SBI-TT Buying rate as prescribed from time to time f) Income derived from Asset: Amount of income derived during the financial year from such immovable property (such as rental income) g) Nature of Income: h) Details of amounts offered to tax

51 FOREIGN ASSET [FA] SCHEDULE (PART E) E Details of account(s) in which you have signing authority held (including any beneficial interest) at any time during the previous year and which has not been included in A to D above. Sr No Name of the Institution in which the account is held (Note : If no entry is made in this column, then other columns will not be considered for that row) Address of the Institution Name of the Account Holder Account Number Peak Balance/In vestment / during the year (in rupees) Whether income accrued is taxable in your hands? If (7) is yes, Income accrued in the account If (7) is yes, Income offered in this return Amount Schedule where offered Item number of schedule (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

52 FOREIGN ASSET [FA] SCHEDULE (PART E) What information is to be provided in respect of signing authority (beneficial interest) held in Foreign account? a) Name of Institution in which account is held i.e. place where the entity is registered b) Address of institution: c) Name of account holder: Entity/Person in whose name account is operated d) Account Number: Depends from bank to bank (some accounts are identified with unique identification number) e) Peak Balance: Peak balance at any time during the financial year in respective currency as appearing in the bank account statement duly converted into INR applying SBI-TT Buying rate as prescribed from time to time f) Whether income Accrued is taxable in the hands of the reporting person: If income from such account is taxable in the hands of the reporting person, details of such income. g) Details of income offered to tax

53 FOREIGN ASSET [FA] SCHEDULE (PART F) Details of trusts, created under the laws of a country outside India, in which you are a trustee, F beneficiary or settlor Sr No Country Code Name of the trust Address of the trust Name of Other trustees Address of Other trustees Name of Settlor Addres s of Settlor Name of Benefi ciaries Addres s of Benefi ciaries Date since positi on held Whet her incom e derive d is taxabl e in your hands? If (12) is yes, Incom e derive d from the trust If (12) is yes, Income offered in this return Amou nt Sche dule wher e (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) 1 (Select) 2 (Select) 3 (Select) 4 (Select) offere d Item numb er of sched ule

54 FOREIGN ASSET [FA] SCHEDULE (PART F) What information is to be provided in respect of trust created outside India. a) Country code i.e. place where the entity is registered b) Name & Address of Trust: Existing name and address c) Name & Address of other trustees: d) Name & Address of Settlor: e) Name & Address of Beneficiaries: f) Date since position in the trust is held: Date on which financial interest in the entity was created g) Whether income from trust is taxable in the hands of the reporting person h) If taxable, income chargeable to tax i) Details of amounts offered to tax

55 FOREIGN ASSET [FA] SCHEDULE (PART G) Details of any other income derived from any source outside India which is not included G in,- (i) items A to F above and, (ii) income under the head business or profession Sr Country Name of Addres of Income Nature of Whether If (7) is yes, Income offered No Code person from whom derived person from whom derived derived income taxable in your hands? in this return Amount Schedule where offered Item number of schedule (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) 1 (Select) 2 (Select) 3 (Select) 4 (Select)

56 FOREIGN ASSET [FA] SCHEDULE (PART G) What information is to be provided in respect of any other income derived from source outside India which falls under the head Profits and gains from Business or Profession. a) Country code i.e. place where the entity is registered b) Name & address of person from whom derived: Name of person/entity as the case may be c) Income derived d) Nature of income e) Whether taxable in your hands? f) If taxable, income chargeable to tax and details of amounts offered to tax

57 OTHER ISSUES CONCERNING TAXATION OF Individuals/HUF NRIS/NON RESIDENTS Section 115G: NRI is not required to file his Return of Income if income during the relevant financial year comprises only of investment income or capital gains and tax at source has been deducted under Chapter XVIIB. Investment Income means income derived (other than dividend referred in section 115-O) from a foreign exchange asset Foreign exchange asset means any specified asset which the assessee has acquired or purchased, with, or subscribed in convertible foreign exchange Specified Asset means (a) shares in an Indian Company; (b) debentures issued by an Indian public company; (c) deposits with an Indian public company; (d) any security issued by Central Government Section 115I: Provides an option to the assessee (NRI) to file return of income and make necessary compliances

58 OTHER ISSUES CONCERNING TAXATION OF Non-resident entities NRIS/NON RESIDENTS Whether all non-resident entities (companies, LLPs etc) are required to file return of income in India if they have income accruing or arising in India? Whether other compliance i.e. tax audit, transfer pricing audit become applicable to such non-resident entities?

59 SPECIAL CASES Filing of return of deceased person as Legal Representative (Ref to section 159) Legal representative is deemed to be an assessee for the purpose of income tax Person acting as legal representative needs to add himself as Legal Heir and then return of income can be uploaded by him under his verification a legal representative Filing of return as Representative Assessee (Sec. 160) In respect of income of non-resident specified u/s. 9(1)(i), agent of non-resident is required to file return of income on behalf of non-resident Agent of non-resident has been defined under section 163

60 E-FILING TAKE IT EASY

61 Electronically SUBMISSION OF ITR Under Digital Signature Under Electronic Verification Code Followed by submission of ITR-V In a paper form

62 SUBMISSION BY INDIVIDUAL/HUF Where Tax Audit u/s. 44AB : Compulsorily under DSC ITR-3 or ITR-4 Any other audit report required to be submitted electronically ITR-2 :Claiming double tax relief u/s. 90 / 90A / 91 ITR-2 :Ordinarily resident having foreign asset or signing authority in foreign bank account or foreign sourced income Having income exceeding ` 5,00,000 or claiming refund [other than very senior citizen filing ITR-1 or ITR-2]

63 SUBMISSION BY OTHERS Submission of ITR electronically under DSC Where Tax Audit u/s. 44AB Always Submitted by Political Party NOTE: ITR-5 & ITR-7 has to be submitted electronically in other cases but not necessarily under DSC

64 WHO CAN FILE ITR IN A PAPER FORM? Individual / HUF can file a paper return only if the following conditions are satisfied Not subject to tax audit u/s. 44AB Not required to submit any other audit report electronically No foreign asset or foreign sourced income No double-tax relief u/s. 90 / 90A /91 Not required to submit ITR-3 or ITR-4 Total income ` 5,00,000 and no refund is claimed in the ITR For other than Very Senior Citizen furnishing return in ITR-1 or ITR-2

65 PROCESS FLOW E-FILING OF RETURN Do you have user Id & Password Yes Login Download Utility & Instructions No Register Online Review instructions, FAQs, call E- filing Helpdesk Update Form Return e-filed successfully Yes Yes Any errors or difficulties? DSC or EVC used for E- Filing? Click Submit Return Button Attach & Upload XML File Generate XML file No Print ITR-V, sign and submit it to Income Tax Department, CPC, Bengaluru

66 TYPES OF FILING RETURN OF INCOME ELECTRONICALLY There are three ways to file Income Tax Returns electronically: e-file without Digital Signature Certificate. In this case an ITR-V Form is generated. The Form should be printed, signed and submitted to CPC, Bangalore using Ordinary Post or Speed Post ONLY within 120 days from the date of e-filing. There is no further action needed, if ITR-V Form is submitted. e-file the Income Tax Return through an e-return Intermediary (ERI) with or without Digital Signature Certificate (DSC). Use Digital Signature Certificate (DSC) / Electronic Verification Code (EVC) to e-file. There is no further action needed, if filed with a DSC / EVC.

67 TYPES OF FILING RETURN OF INCOME ELECTRONICALLY

68 OPTIONS TO PREPARE ITR Prepare and Submit Online ITR No need of offline utility Available only for ITR-1 & ITR-4S Offline utilities provided by IT Department Excel Utility Pre-filled XML Can be downloaded Can be imported automatic filling up of Personal Information, TDS/TCS & Tax Payments Java Utility Refer PDF Help Files - How to use ITR Utilities and Java Setup Softwares

69 TYPES OF E-VERIFICATIONS

70 VERIFICATION THROUGH DSC DSC should have been registered Download the ITD e-filing DSC Management Utility Generate the signature file using this utility Attach the generated signature file while uploading xml file The generated signature file is valid only for one transaction

71 VERIFICATION THROUGH EVC EVC is a 10 digit alpha-numeric number Multiple options for generating EVC Get it at registered ID and Mobile Number Available only if total income 5,00,000 and no refund claim One Mobile Number and ID can be used for a maximum 10 user accounts Through Net Banking 34 banks are providing this facility Primary Account Holder Log-in through Net Banking Access IT e-filing portal from bank s portal e-verify Return screen will appear Click on e-verify to complete the process

72 VERIFICATION THROUGH EVC Multiple options for generating EVC Generate Aadhaar OTP to e-verify PAN & Aadhaar must be linked OTP (6 digits) will be received on mobile no. registered under Aadhaar Valid only for 30 minutes Through Bank Account Number Prevalidate your Bank Account (in Profile Settings) Presently, only PNB is providing this service Bank A/c No., IFSC, Mobile No. & ID Mobile No. & ID must match with Bank s data

73 VERIFICATION THROUGH EVC Multiple options for generating EVC Two more options but not functional at present Through ATM of All Bank (only SBI has been functional) Through prevalidating Demat Account EVC can be obtained in advance, at the time of submission or subsequent to submission E-verify later within 120 days from date of uploading return

74 VERIFICATION BY SENDING ITR-V Time limit 120 days from the date of uploading return Send it to CPC, Bengaluru by ordinary or speed post (without acknowledgement due) Refer Do s & Don t Circular No. 13/2016 dated Old returns pending for verification A.Y to Allowing assessees to e-verify through EVC or send ITR-V Latest by Returns shall be processed by

75 SIGNING OF ELECTRONIC RETURN

76 DUE DATES DON T MISS IT

77 DUE DATES FOR FILING ITR Type of Case Due Date Transfer Pricing Audit u/s. 92E Company Tax Audit u/s. 44AB Audit under any other law Partner of a firm liable for audit u/s. 44AB or audit under any other law Any other case

78 CONSEQUENCES OF DELAY Additional Interest u/s. 234A or 234B Penalty u/s. 271F / 272A Loss of right to carry forward certain losses Deductions u/s. 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID & 80-IE not available Loss of interest u/s. 244A Amendment by FA, 2016 Interest shall be available from the date of furnishing of return and not from 1 st April of A.Y. Effective from Is it applicable for A.Y ?

79 IMPORTANT AMENDMENTS FINANCE ACT, 2015 Tax on Royalty and Fees for Technical Service in the case of non-resident: Section 115A has been amended to reduce the rate of income tax applicable on payments made to non-resident in the nature of Royalty and Fees for Technical Services from 25% to 10%. Increase in Additional depreciation: Section 32(1)(iia) has been amended to provide higher additional depreciation at the rate of 35% (instead of existing additional depreciation of 20%) on actual cost incurred for acquisition and installation of new machinery and plant (other than a ship and aircraft) by a manufacturing undertaking or enterprise which is set up in the notified backward area of the States of Andhra Pradesh, Telangana, Bihar & West Bengal during the period beginning on 1st day of April, 2015 and ending before the 1st day of April, 2020 is allowable. The eligible machinery or plant for this purpose shall not include the machinery or plant which are currently not eligible for additional depreciation as per the existing proviso to section 32(1)(iia) of the Act. Consequential amendments to section 32(1) was made for applying the existing restriction of the allowance to the extent of 50% for assets used for the purpose of business for less than 180 days in the year of acquisition and installation. After the amendment balance 50% of the allowance is to be allowed in the immediately succeeding financial year.

80 IMPORTANT AMENDMENTS FINANCE ACT, 2015 Additional Investment Allowance to a Manufacturing Company: Section 32AD has been inserted to provide an additional investment allowance for an amount equal to 15% of the cost of new asset acquired and installed by an undertaking or enterprise for manufacture or production of any article or thing on or after 1 st April, 2015 up to 31 st March, 2020 in any notified backward areas in the State of Andhra Pradesh, State of Telangana, Bihar & West Bengal. This deduction is available over and above the existing deduction available under section 32AC of the Act. Expenditure on Scientific research: Section 35(2AB) has been amended to provide that deduction under the said section shall be allowed if the company enters into an agreement with the prescribed authority for cooperation in such research and development facility and fulfills prescribed conditions with regard to maintenance and audit of accounts and also furnishes prescribed reports to the prescribed authority. Deduction for employment of new workmen: Section 80JJAA amended to extend the benefit to all persons having manufacturing units rather than restricting it to corporate entities only. Further, the benefit is extended under the section to units employing even 50 instead of 100 regular workmen. The quantum of deduction allowed will be equal to 30% of additional wages paid to the new regular workmen employed by the person/entity in such factory,

81 IMPORTANT AMENDMENTS FINANCE ACT, 2015 Section No. 80D 80DD 80U 80DDB Nature of Payment Premium for Health Insurance (Individual, Parents) If Insured - Senior Citizen (60 years or above) Medical Expenditure for Uninsured Very Senior Citizens (80 years or above) Deduction A.Y Deduction A.Y ` 15,000 ` 25,000 ` 20,000 ` 30,000 Nil ` 30,000 Persons with Disability ` 50,000 ` 75,000 Persons with severe Disability ` 1,00,000 ` 1,25,000 Persons with Disability ` 50,000 ` 75,000 Persons with severe Disability ` 1,00,000 ` 1,25,000 For Very Senior Citizen category added and limit enhanced ` 60,000 ` 80,000

82 IMPORTANT AMENDMENTS FINANCE ACT, 2015 Domestic Transfer Pricing Provisions: Threshold for applicability of Domestic Transfer Pricing provisions is increased to `20 crores from existing threshold limit of `5 Cr The provisions of section 95 relating to General Anti Avoidance Rule ( GAAR ) were deferred by two years i.e. upto financial year onwards. Rationalization of Minimum Alternate Tax in respect of income from share in AOP/BOI: If an amount is credited to the profit and loss account of the company which is in the nature of share of income as a member of an association of persons or body of individuals on which no income-tax is payable in accordance with the provisions of section 86 then it shall be reduced from the book profit for the purposes of calculation of Minimum Alternate Tax. Consequently, the book profit shall be increased by the amount or amounts of expenditure relatable to the income as explained above.

83 THANK YOU!. Disclaimer The information provided in this presentation is for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of this presentation, clients or otherwise, should act or refrain from acting on the basis of any content included in this presentation without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue. The content of this presentation contains general information and may not be accurate or reflect current legal developments, verdicts or settlements. The presenter and the firm with which presenter is associated expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this presentation.