ICAI Notes: Provisions for filing Return of Income and Self-assessment | Taxation for CA Intermediate PDF Download

 Page 1


LEARNING OUTCOMES 
a
CHAPTER 
8 
 
PA 
  
  PROVISIONS FOR  
 FILING RETURN OF  
 INCOME AND  
 SELF ASSESSMENT  
 
 
 
 
After studying this chapter, you would be able to– 
? comprehend as to what is a “return of income”; 
? identify the persons who have to compulsorily file a return of income; 
? identify and recall the due date for filing return of income for different 
assessees; 
? examine the consequences of late filing of return; 
? compute the interest payable for delayed filing of return of income; 
? compute the fee payable for delayed filing of return of income; 
? appreciate when a return of income can be revised and the time limit 
within which a return has to be revised; 
? appreciate when an updated return of income can be filed; 
? appreciate the manner of computation of tax payable on the basis of 
updated return; 
? identify the persons who are required to apply for permanent account 
number; 
© The Institute of Chartered Accountants of India
Page 2


LEARNING OUTCOMES 
a
CHAPTER 
8 
 
PA 
  
  PROVISIONS FOR  
 FILING RETURN OF  
 INCOME AND  
 SELF ASSESSMENT  
 
 
 
 
After studying this chapter, you would be able to– 
? comprehend as to what is a “return of income”; 
? identify the persons who have to compulsorily file a return of income; 
? identify and recall the due date for filing return of income for different 
assessees; 
? examine the consequences of late filing of return; 
? compute the interest payable for delayed filing of return of income; 
? compute the fee payable for delayed filing of return of income; 
? appreciate when a return of income can be revised and the time limit 
within which a return has to be revised; 
? appreciate when an updated return of income can be filed; 
? appreciate the manner of computation of tax payable on the basis of 
updated return; 
? identify the persons who are required to apply for permanent account 
number; 
© The Institute of Chartered Accountants of India
INCOME TAX LAW 
 
 
a
 
 
8.2 
? identify the transactions in respect of which quoting of PAN is 
mandatory; 
? appreciate who are the specified classes of persons who can file return 
through Tax Return Preparer; 
? identify the persons who are authorised to verify the return of income in 
the case of different assessees in various circumstances; 
? appreciate the requirement to pay self-assessment tax before filing return of 
income; 
? appreciate the order of adjustment of amount paid by the assessee 
against self-assessment tax, fee and interest. 
  
© The Institute of Chartered Accountants of India
Page 3


LEARNING OUTCOMES 
a
CHAPTER 
8 
 
PA 
  
  PROVISIONS FOR  
 FILING RETURN OF  
 INCOME AND  
 SELF ASSESSMENT  
 
 
 
 
After studying this chapter, you would be able to– 
? comprehend as to what is a “return of income”; 
? identify the persons who have to compulsorily file a return of income; 
? identify and recall the due date for filing return of income for different 
assessees; 
? examine the consequences of late filing of return; 
? compute the interest payable for delayed filing of return of income; 
? compute the fee payable for delayed filing of return of income; 
? appreciate when a return of income can be revised and the time limit 
within which a return has to be revised; 
? appreciate when an updated return of income can be filed; 
? appreciate the manner of computation of tax payable on the basis of 
updated return; 
? identify the persons who are required to apply for permanent account 
number; 
© The Institute of Chartered Accountants of India
INCOME TAX LAW 
 
 
a
 
 
8.2 
? identify the transactions in respect of which quoting of PAN is 
mandatory; 
? appreciate who are the specified classes of persons who can file return 
through Tax Return Preparer; 
? identify the persons who are authorised to verify the return of income in 
the case of different assessees in various circumstances; 
? appreciate the requirement to pay self-assessment tax before filing return of 
income; 
? appreciate the order of adjustment of amount paid by the assessee 
against self-assessment tax, fee and interest. 
  
© The Institute of Chartered Accountants of India
       
 
PROVISIONS FOR FILING RETURN OF  
INCOME AND SELF ASSESSMENT 
a
a
8.3 
 
Filing of Return
Compulsory filing 
of Return of 
Income 
[Section 139(1)]
Return of Loss 
[Section 139(3)]
Belated Return 
[Section 139(4)]
Revised Return 
[Section 139(5)]
Updated Return
[Section 139(8A)]
Interest and fee 
for default in 
furnishing return 
of income
Interest for default 
in furnishing 
return of income 
[Section 234A]
Fee for default in 
furnishing return 
of income 
[Section 234F]
Other Provisions
Permanent Account 
Number 
[Section 139A]
Quoting of Aadhaar 
Number 
[Section 139AA]
Fee for non intimation 
of Aadhaar Number 
[Section 234H]
Submission of returns 
through Tax Return 
Preparers 
[Section 139B] [Section 139B]
Person authorised to 
verify return of income 
[Section 140]
Self-Assessment 
[Section 140A]
Tax on updated 
return
[Section 140B]
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
Page 4


LEARNING OUTCOMES 
a
CHAPTER 
8 
 
PA 
  
  PROVISIONS FOR  
 FILING RETURN OF  
 INCOME AND  
 SELF ASSESSMENT  
 
 
 
 
After studying this chapter, you would be able to– 
? comprehend as to what is a “return of income”; 
? identify the persons who have to compulsorily file a return of income; 
? identify and recall the due date for filing return of income for different 
assessees; 
? examine the consequences of late filing of return; 
? compute the interest payable for delayed filing of return of income; 
? compute the fee payable for delayed filing of return of income; 
? appreciate when a return of income can be revised and the time limit 
within which a return has to be revised; 
? appreciate when an updated return of income can be filed; 
? appreciate the manner of computation of tax payable on the basis of 
updated return; 
? identify the persons who are required to apply for permanent account 
number; 
© The Institute of Chartered Accountants of India
INCOME TAX LAW 
 
 
a
 
 
8.2 
? identify the transactions in respect of which quoting of PAN is 
mandatory; 
? appreciate who are the specified classes of persons who can file return 
through Tax Return Preparer; 
? identify the persons who are authorised to verify the return of income in 
the case of different assessees in various circumstances; 
? appreciate the requirement to pay self-assessment tax before filing return of 
income; 
? appreciate the order of adjustment of amount paid by the assessee 
against self-assessment tax, fee and interest. 
  
© The Institute of Chartered Accountants of India
       
 
PROVISIONS FOR FILING RETURN OF  
INCOME AND SELF ASSESSMENT 
a
a
8.3 
 
Filing of Return
Compulsory filing 
of Return of 
Income 
[Section 139(1)]
Return of Loss 
[Section 139(3)]
Belated Return 
[Section 139(4)]
Revised Return 
[Section 139(5)]
Updated Return
[Section 139(8A)]
Interest and fee 
for default in 
furnishing return 
of income
Interest for default 
in furnishing 
return of income 
[Section 234A]
Fee for default in 
furnishing return 
of income 
[Section 234F]
Other Provisions
Permanent Account 
Number 
[Section 139A]
Quoting of Aadhaar 
Number 
[Section 139AA]
Fee for non intimation 
of Aadhaar Number 
[Section 234H]
Submission of returns 
through Tax Return 
Preparers 
[Section 139B] [Section 139B]
Person authorised to 
verify return of income 
[Section 140]
Self-Assessment 
[Section 140A]
Tax on updated 
return
[Section 140B]
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
INCOME TAX LAW 
 
 
a
 
 
8.4 
1. RETURN OF INCOME 
The Income-tax Act, 1961 contains provisions for filing of return of income. Return 
of income is the format in which the assessee furnishes information, as self-
declaration, regarding his total income and tax payable. The format for filing of 
returns by different assessees is notified by the CBDT. The particulars of income 
earned under different heads, gross total income, deductions from gross total 
income, total income and tax payable by the assessee are generally required to be 
furnished in a return of income. In short, a return of income is the declaration of 
income and the resultant tax by the assessee in the prescribed format.  
2. COMPULSORY FILING OF RETURN OF INCOME 
[SECTION 139(1)] 
(1) As per section 139(1), it is compulsory for companies and firms to file a return 
of income or loss for every previous year on or before the due date in the 
prescribed form. 
(2) In case of a person other than a company or a firm, filing of return of income 
on or before the due date is mandatory, if his total income or the total income 
of any other person in respect of which he is assessable under this Act during 
the previous year exceeds the basic exemption limit. 
(3) Every person, being a resident other than not ordinarily resident in India 
within the meaning of section 6(6), who is not required to furnish a return 
under section 139(1), would be required to file a return of income or loss for 
the previous year in the prescribed form and verified in the prescribed 
manner on or before the due date, if such person, 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 a 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. 
 However, an individual being a beneficiary of any asset (including any 
financial interest in any entity) located outside India would not be 
required to file return of income under this clause, where, income, if 
© The Institute of Chartered Accountants of India
Page 5


LEARNING OUTCOMES 
a
CHAPTER 
8 
 
PA 
  
  PROVISIONS FOR  
 FILING RETURN OF  
 INCOME AND  
 SELF ASSESSMENT  
 
 
 
 
After studying this chapter, you would be able to– 
? comprehend as to what is a “return of income”; 
? identify the persons who have to compulsorily file a return of income; 
? identify and recall the due date for filing return of income for different 
assessees; 
? examine the consequences of late filing of return; 
? compute the interest payable for delayed filing of return of income; 
? compute the fee payable for delayed filing of return of income; 
? appreciate when a return of income can be revised and the time limit 
within which a return has to be revised; 
? appreciate when an updated return of income can be filed; 
? appreciate the manner of computation of tax payable on the basis of 
updated return; 
? identify the persons who are required to apply for permanent account 
number; 
© The Institute of Chartered Accountants of India
INCOME TAX LAW 
 
 
a
 
 
8.2 
? identify the transactions in respect of which quoting of PAN is 
mandatory; 
? appreciate who are the specified classes of persons who can file return 
through Tax Return Preparer; 
? identify the persons who are authorised to verify the return of income in 
the case of different assessees in various circumstances; 
? appreciate the requirement to pay self-assessment tax before filing return of 
income; 
? appreciate the order of adjustment of amount paid by the assessee 
against self-assessment tax, fee and interest. 
  
© The Institute of Chartered Accountants of India
       
 
PROVISIONS FOR FILING RETURN OF  
INCOME AND SELF ASSESSMENT 
a
a
8.3 
 
Filing of Return
Compulsory filing 
of Return of 
Income 
[Section 139(1)]
Return of Loss 
[Section 139(3)]
Belated Return 
[Section 139(4)]
Revised Return 
[Section 139(5)]
Updated Return
[Section 139(8A)]
Interest and fee 
for default in 
furnishing return 
of income
Interest for default 
in furnishing 
return of income 
[Section 234A]
Fee for default in 
furnishing return 
of income 
[Section 234F]
Other Provisions
Permanent Account 
Number 
[Section 139A]
Quoting of Aadhaar 
Number 
[Section 139AA]
Fee for non intimation 
of Aadhaar Number 
[Section 234H]
Submission of returns 
through Tax Return 
Preparers 
[Section 139B] [Section 139B]
Person authorised to 
verify return of income 
[Section 140]
Self-Assessment 
[Section 140A]
Tax on updated 
return
[Section 140B]
CHAPTER OVERVIEW 
© The Institute of Chartered Accountants of India
INCOME TAX LAW 
 
 
a
 
 
8.4 
1. RETURN OF INCOME 
The Income-tax Act, 1961 contains provisions for filing of return of income. Return 
of income is the format in which the assessee furnishes information, as self-
declaration, regarding his total income and tax payable. The format for filing of 
returns by different assessees is notified by the CBDT. The particulars of income 
earned under different heads, gross total income, deductions from gross total 
income, total income and tax payable by the assessee are generally required to be 
furnished in a return of income. In short, a return of income is the declaration of 
income and the resultant tax by the assessee in the prescribed format.  
2. COMPULSORY FILING OF RETURN OF INCOME 
[SECTION 139(1)] 
(1) As per section 139(1), it is compulsory for companies and firms to file a return 
of income or loss for every previous year on or before the due date in the 
prescribed form. 
(2) In case of a person other than a company or a firm, filing of return of income 
on or before the due date is mandatory, if his total income or the total income 
of any other person in respect of which he is assessable under this Act during 
the previous year exceeds the basic exemption limit. 
(3) Every person, being a resident other than not ordinarily resident in India 
within the meaning of section 6(6), who is not required to furnish a return 
under section 139(1), would be required to file a return of income or loss for 
the previous year in the prescribed form and verified in the prescribed 
manner on or before the due date, if such person, 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 a 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. 
 However, an individual being a beneficiary of any asset (including any 
financial interest in any entity) located outside India would not be 
required to file return of income under this clause, where, income, if 
© The Institute of Chartered Accountants of India
       
 
PROVISIONS FOR FILING RETURN OF  
INCOME AND SELF ASSESSMENT 
a
a
8.5 
A resident other than not ordinarily resident within the meaning of section 6(6) 
who is not required to furnish a return of income u/s 139(1) 
who at any time during the P.Y. 
AND 
A B 
is a beneficiary of any asset 
(including financial interest in 
any entity) located outside India 
holds, as beneficial owner 
or otherwise, any asset 
(including financial 
interest in any entity) 
located outside India 
OR 
However, where any income arising from such asset is includible in the hands of the person 
specified in (A) in accordance with the provisions of the Act, an individual, being a beneficiary 
of such asset, is not required to file return of income under the fourth proviso. 
has a signing 
authority in any 
account located 
outside India 
OR 
any, arising from such asset is includible in the income of the person 
referred to in (a) above in accordance with the provisions of the Income-
tax Act, 1961. 
Meaning of “beneficial owner” and “beneficiary” in respect of an asset for 
the purpose of section 139: 
Requirement of filing of return of income as per the fourth and fifth 
proviso to section 139(1) 
 
           
 
Beneficial 
Owner
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
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.
© The Institute of Chartered Accountants of India