Tax Compliances : Filing Tax Returns and Revised Returns Under the Income Tax Act.

 

Section 139(3) of the Income Tax Act of 1961 states that :

- If an individual incurs a loss in the previous financial year, they are not required to file a tax return.

- Tax return for loss is mandatory for companies and firms, provided:

    - The loss arises under the heads “Profits and Gains of Business and Profession” or “Capital Gains.”

    - The firm wants to carry forward this loss to offset with future income.

    - The tax return indicating the loss is filed within the due date.

- If the loss arises under the head “House or residential Property,” the loss can be carried forward even if the tax return is filed after the due date.

- If the loss is filed for return under Section 142(1), the loss under “House property” cannot be carried forward. However, the unabsorbed depreciation can be carried forward.

- If the loss is to be offset against income in another category for the same year, it is permitted even if the return is filed after the due date.

- The loss of earlier years can be carried forward if the return of losses for those years was filed within the due dates and those losses were assessed.

Section 139(4) of the Income Tax Act of 1961 pertains to the late filing of tax returns . The following are the drawbacks of filing a belated return:

- Interest applicable under sections 234A, 234B and 234C

- Late fee levied under Section 234F

- Losses cannot be carried forward and set off in the subsequent years (with the exception of losses from house property)

- Deductions/ exemptions disallowed (u/s 10A, 10B, 80-IA, 80-IB, 80-IC, 80-ID and 80-IE)

If you wish to file a belated return, it can be done in the usual manner on the Cleartax website or the Income Tax Portal. Please note that belated returns cannot be revised, but from FY 2016-17, a belated return can also be revised.

Section 139(5) of the Income Tax Act of 1961 :

- Revised return is the return filed to correct mistakes or omissions in the original return.

- The revised return can even be filed for a belated return.

- The revised return can be filed by December 31 of the relevant assessment year or before the completion of assessment.

- You can file a revised return for errors in the original return, for missed reporting, and for changes in tax calculation.

- If you have not filed the original return using Cleartax, you can use Cleartax to file a revised return.

- There is no limit to the number of times you can file a revised tax return.

- Filing a revised return is crucial if errors are identified, as the income tax department may issue a notice for mistakes in the original return.

Here are some FAQs based on the information provided:

Q1. Is it necessary to file a tax return if an individual incurs a loss in the previous financial year?

A1. No, it is not necessary to file a tax return if an individual incurs a loss in the previous financial year.

Q2. Is it mandatory for companies and firms to file a tax return for loss?

A2. Yes, it is mandatory for companies and firms to file a tax return for loss if the loss arises under the heads "Profits and Gains of Business and Profession" or "Capital Gains" and they want to carry forward the loss to offset with future income.

Q3. Can losses be carried forward if the tax return is filed after the due date?

A3. Yes, losses can be carried forward if the tax return is filed after the due date, but only if the loss arises under the head "House or residential Property".

Q4. What are the drawbacks of filing a belated return?

A4. The drawbacks of filing a belated return include interest applicable under sections 234A, 234B, and 234C, late fee levied under Section 234F, losses cannot be carried forward and set off in subsequent years (except for losses from house property), and deductions/exemptions disallowed under certain sections.

Q5. Can a belated return be revised?

A5. Yes, a belated return can be revised, but only from FY 2016-17 onwards.

Q6. What is a revised return?

A6. A revised return is a return filed to correct mistakes or omissions in the original return.

Q7. Can a revised return be filed for a belated return?

A7. Yes, a revised return can be filed even for a belated return.

Q8. What is the last date for filing a revised return?

A8. The last date for filing a revised return is December 31 of the relevant assessment year or before the completion of assessment.

Q9. How many times can a revised tax return be filed?

A9. There is no limit to the number of times a revised tax return can be filed.