Volume VII Part 6 June 25, 2014 17 Business Advisor

Contours to income tax return forms

V. K. Subramani

A taxpayer in order to communicate his income

chargeable to tax under the Income-tax Act, 1961, has to

file a return of income - a formatted presentation of facts

and figures. From the assessment year 2007-08, the

Government has been notifying the return form for every

year and for every type of taxpayer. A serious practitioner

may even miss out the changes due to frequent

amendments made in the Income-tax Rules, 1962, being

the delegated legislation with the CBDT who prescribe or

notify the changes from time to time.

This write up discusses the various return forms and their applicability to

various taxpayers.

Forms Applicability

ITR-1 Known as Sahaj is applicable for persons having income under

the head (i) ‗salaries‘, income in the nature of family pension

(section 57(iia));

(ii) taxpayers having income from house property but not having

more than one house and not having any brought forward loss

under the head; and

(iii) assessees having income under the head ‗income from other

sources‘, except winning from lottery or income from race horses

and who do not have any loss under the head.

However, ITR 1 is not applicable in the case of resident other

than not ordinarily resident (i) who has assets (including

financial interest in any entity) located outside India or signing

authority in any account located outside India; (ii) who has

claimed relief of tax under section 90 or 90A or deduction under

section 91; or (iii) who has income not chargeable to tax

exceeding Rs 5000 (example those who have agricultural income

exceeding Rs 5000).

ITR-2 In the case of individuals and HUFs whose total income does not

include any income chargeable to tax under the head ‗profits and

Volume VII Part 6 June 25, 2014 18 Business Advisor

gains of business or profession‘ could file the return of income in

this form.

ITR-3 It is applicable to individuals or HUFs being partner in a firm

having income chargeable under the head ‗profits and gains of

business or profession‘ and does not include any income except

the income by way of interest, salary, bonus, commission or

remuneration received from such firm.

ITR-

4S

It is applicable to individual or HUF deriving business income

which is computed in accordance with presumptive provisions

referred to in section 44AD and section 44AA of the Act for

computation of business income.

However, ITR 4S is not applicable in the case of a resident other

than not ordinarily resident (i) who has assets (including

financial interest in any entity) located outside India or signing

authority in any account located outside India; (ii) who has

claimed relief of tax under section 90 or 90A or deduction under

section 91; or (iii) has income not chargeable to tax exceeding Rs

5000 (example those who have agricultural income exceeding Rs

5000).

ITR-4 In the case of individual and HUF not covered in the preceding

categories who are deriving income from business or profession

could file the return in Form No.4.

ITR-5 In the case of a person not being an individual or HUF or

company or non-profit entity is to file return in this form. In

other words it is applicable for partnership firms, association of

persons and body of individuals.

ITR-6 This form is applicable for companies other than those

companies which could use form ITR-7.

Volume VII Part 6 June 25, 2014 19 Business Advisor

ITR-7 It is applicable for persons including companies whether or not

registered under section 25 of the Companies Act, required to file

return under section 139(4A), 4(B), 4(C) and 4(D). It is applicable

to charitable and religious trusts which are assessed in the

status of AOP Trust. Also for companies whether or not

registered under section 25 of the Companies Act, 1956.

Annexure-less returns

All the returns specified above are annexure-less returns. In other words,

the return is not to be accompanied by a statement showing computation of

tax payable or proof of tax paid, claim of TDS or TCS or payment of advance

tax or self-assessment tax or the report of audit under the various

provisions of the Act.

E-filing of audit report and tax returns

The following assessees have to furnish the audit report electronically:

Section Subject

10(23C)(iv) Any fund or institution established for charitable purposes

approved by prescribed authority having regard to the

objects of the fund or institution and its importance

throughout India or throughout any State or States. Audit

report is to be furnished in Form No.10BB.

10(23C)(v) Any trust or institution wholly for religious purposes or

wholly for public religious and charitable purposes

approved by the prescribed authority having regard to the

manner in which the affairs of the trust or institution are

administered and supervised for ensuring that the income

accruing thereto is properly applied for the objects thereof.

Audit report is to be furnished in Form No.10BB.

10(23C)(vi) Any university or other educational institution existing

solely for educational purposes and not for purposes of

profit and other than those mentioned in section

Volume VII Part 6 June 25, 2014 20 Business Advisor

10(23C)(iiiab) (funded by Government) or section

10(23C)(iiiad) (having aggregate annual receipt below Rs

100 lakh) and which is approved by the prescribed

authority. Audit report is to be furnished in Form

No.10BB.

10(23C)(via) Any hospital or other institution for the reception and

treatment of persons suffering from illness or mental

defectiveness or for the reception and treatment of persons

during convalescence or of persons requiring medical

attention or rehabilitation, existing solely for philanthropic

purposes and not for purposes for profit other than those

mentioned in section 10(23C)(iiiac) i.e. institutions wholly

or substantially financed by the Government and section

10(23C)(iiiae) i.e. hospital or institution having aggregate

annual receipt below Rs 100 lakh. Audit report is to be

furnished in Form No.10BB.

10AA Newly established units in Special Economic Zone (SEZ)

enjoying tax holiday - Form No.56F or section 10CCB as

the case may be.

11(2)(a) Charitable or religious trust accumulating or setting apart

income for application in subsequent years - Form No.10

for giving notice of accumulation of income.

12A(1)(b) Charitable trust or institution registered under section

12AA - Form No.10B to be filed.

44AB Persons having income from business or profession and

the aggregate annual turnover/ gross receipts exceeding

the prescribed limit - Form No.3CA or 3CB along with

Form No.3CD.

Volume VII Part 6 June 25, 2014 21 Business Advisor

44DA Non-residents having income by way of royalty - Report of

audit is to be furnished in Form No.3CE.

50B Slump sale of undertaking and computing capital gain

thereon - Audit report to be furnished in Form No.3CEA.

80-IA,80-IB

& 80-IC

Persons having undertaking eligible for deduction under

section 80-IA(4), eligible business under section 80-IB and

section 80-IC - Audit report in Form No.10CCB.

80-ID Profits and gains from business of hotels and convention

centres in specified areas - Audit report in Form

No.10CCBBA.

80-JJAA In respect of employment of new workmen. Audit report in

Form No.10DA.

80-LA In respect of income of offshore banking units and

international financial services centre - Audit report in

Form No.10CCF.

92 E In respect of international transactions or specified

domestic transactions - Audit report in Form No.3CEB.

115 JB In respect of book profit tax for companies - Audit report of

accountant in Form No.29B.

115 VW Indian companies opting for tonnage tax scheme - Audit

report in Form No.66.

Volume VII Part 6 June 25, 2014 22 Business Advisor

All the above audit reports/ reports have to be filed electronically. This is

mandatory.

Mode of filing return of income

Except a company or a person required to furnish the return in Form

No. ITR 7, if the total income exceeds Rs 5 lakh, the return of income

has to be furnished electronically with or without a digital signature.

Therefore, persons with income below Rs 5 lakh could file return of

income in paper form if other conditions are not attracted.

In the case of individual or HUF being a resident (other than not-

ordinarily resident) having assets (including financial interest in any

entity) located outside India are required to furnish ITR-2, ITR-3 or

ITR-4 as the case may be, have to furnish the return electronically

with or without digital signature.

A firm required to furnish in Form No. ITR 5 or an individual or HUF

who is required to furnish the return in Form No. ITR 4 and to whom

the provisions of section 44AB are applicable has to furnish return

of income in electronic mode with digital signature.

Persons claiming relief under section 90 or section 90A or deduction

under section 91 (not being a company or an individual or HUF or

firm governed by section 44AB) have to furnish the return

electronically with or without digital signature.

Volume VII Part 6 June 25, 2014 23 Business Advisor

Partnership firms and AOPs who are required to file return in ITR-5 to

whom provisions of section44AB are not applicable have to file the

return electronically with or without digital signature.

A company required to furnish return in ITR-6 has to furnish the

return mandatorily with digital signature.

Assessees who are required to furnish return in ITR-7 under section

139(4B)[applicable for political parties] have to file the return

electronically with digital signature and in the case of others, it has to

be filed electronically with or without digital signature.

Where any report of audit is furnished electronically, the return of

income must be filed electronically either with or without digital

signature.

Where the return is filed with digital signature the ITR-V generated

upon filing the return is not to be sent to CPC, Bengaluru. Where it is

filed without digital signature the ITR-V must be sent to CPC,

Bengaluru within 120 days of uploading the return electronically.

Conclusion

Filing of return with or without digital signature is optional for small and

marginal tax payers. It should be noted that where an audit report is filed

under the law, the return filing is by electronic mode on mandatory basis.

In fact, charitable trusts and institutions have been mandated to file return

of income on electronic mode vide (Seventh Amendment) Income-tax Rules,

2013 dated 11.06.2013 w.e.f. 01.04.2013.

This has not been adequately publicised and many such institutions have

filed paper returns for the assessment year 2013-14.

A benevolent circular to entitle them to file electronic return or for

regularising the paper return which is already available on record may

reduce litigation in the days to come.

(V. K. Subramani is Chartered Accountant, Erode)

Filing of return with or without digital signature is optional

for small and marginal tax payers. It should be noted that

where an audit report is filed under the law, the return filing

is by electronic mode on mandatory basis.