The Income Tax Department of India has classified the income of an Indian citizen into five broad categories based on income sources. These five categories are mainly salary, house property, business, capital gains, and other sources. Every person whose income falls within tax bracket is supposed to pay an income tax to the government and file their tax returns within a fixed deadline. The section is divided into several categories to deal with different types of returns, and every Indian citizen is advised to follow these guidelines.
Section 139 of the Income Tax Act of 1961 has several subsections defining norms and regulations as per different cases and circumstances. Keep reading this guide to learn more about Section 139.
Section 139 (1)of the Income Tax Act acts as a framework that allows taxpayers to file late returns, in case they miss the prescribed deadline. There are various sub-sections under section 139(1) of the income tax act. The section 139(1) of the income tax act offers means to rectify the non-submission of Income Tax Returns within the timeline.
Section 139(1) of the Income Tax Act deals with the mandatory return policies while filing the Income Tax Return. The following entities are to file their tax return:
Voluntary Returns: If someone files an income tax return even though their income falls below the mandatory filing threshold, that return is considered voluntary. These voluntary returns are still valid for tax purposes.
Section 139(3) deals with filing income tax returns in the case of a loss. It is usually quite useful to file for the return in the case of losses, as the loss is allowed to be carried forward, reducing the tax liability in subsequent years. The following are specifically defined cases-
It is advisable for a taxpayer (whether an individual or any other entity) to furnish the tax return before the due date as per Section 139(1) of the Income Tax Act. However, if the return file is still delayed, there is still the possibility of filing the belated return for prior years until the expiry date of the current applicable year of assessment or before the financial year is concluded. Nonetheless, if the taxpayer fails yet again, a penalty of 5,000 rupees is charged under Section 271F of the IT Act, 1961. The penalty can be escaped if the income did not require the mandatory filing as defined under Section 139(1) of the income tax act and the return was filed after the due date.
If a person who has furnished a return under section 139(1) or section 139(4) discovers any omission or error, they may submit a revised return before the end of the relevant assessment year or before the assessment is completed, whichever is earlier. The revised return will replace the original return from the date the original return was filed. A loss return filed belatedly under section 139(4) can be revised under section 139(5), but the loss cannot be carried forward since the original return was filed late.
You must file an income tax return if you receive any of the following income and the total amount (before considering exemptions under sections 11 and 12) exceeds the tax-free limit:
The return of income must be furnished in Form No. ITR-7 and verified in the prescribed manner containing all the necessary particulars. This return must be submitted by the representative assessee within the time prescribed under section 139(1) of the income tax act electronically, either under digital signature or otherwise.
The chief executive officer (regardless of whether they are referred to as Secretary or by any other title) of every political party must file a return of income for the previous year if the total income, computed under this Act without considering the provisions of section 13A, exceeds the maximum amount not chargeable to income tax. The return should be submitted in the prescribed form, verified in the prescribed manner, and include all required details. All the provisions of this Act will apply to this return as if it were required to be filed under sub-section (1).
As per Section 10 of the Income Tax Act of 1961, there are certain institutions that can claim certain benefits, and for the tax return of these institutions- Section 139(4C) and Section 139(4D) are to be referred to.
Section 139(4C) includes those institutions for which it is necessary to file a tax return if the maximum allowable limit is beyond the maximum cap of tax exemption, which shall exclude other exemption benefits enjoyed by the institution.
These institutions are mainly the following groups and agencies-
Section 139(4D) of the Income Tax Act pertains to universities, colleges, and other institutions that are not required to file tax returns of income and loss under any other provision in this section. Specifically, it applies to institutions referred to in Section 35(1)(ii) and Section 35(1)(iii). If an institution falls under this category, it must furnish its return of income or loss every previous year, similar to other taxpayers. However, if their income is unconditionally exempt under various clauses of Section 10, they may use the relevant ITR form for filing their return.
A tax return can be deemed to be defective under Section 139(9) if documents are missing. The taxpayer shall make the judgment of a defective return, and the taxpayer shall be duly notified via a simple letter. A time slot of fifteen days shall be given to rectify the problem and produce the missing documents. The period might also be extended upon the request of the taxpayer providing valid reasons. Thereby, one must note the following list of documents for your file to avoid being deemed defective.
If the assessing officer deems a return to be defectcove, he/she can send a defective return notice to the taxpayer. The taxpayer will have to respond to it within 15 days. Here’s what you need to do -
If the defective return is not rectified within 15 days or the extension is not allowed, your return is considered to be invalid. This can lead to consequences like penalty, interest, non carry forward of losses, and forfeiture of specific exemptions.
Different individuals attain their income through different methods, and therefore, Section 139 has prescribed due dates for the specific demand of filing income tax returns. The dates are as follows-
The Income Tax Department has released form ITR 7 for all the individuals, institutions, and entities that are required to file their returns under the first four parts of Section 139(4a), 139(4b), 139(4c), 139(4d). The taxpayers are suggested to match their tax figures of paid and deducted amounts with Form 26AS or the Tax Credit Statement.
The following methods can be employed to file the Form ITR-7 with the IT Department-
Section 4E of 139 is for furnishing returns for the income of other business trusts that are not provided to submit their profit and loss accounts.
Section 139 of the Income-tax Act has undergone recent amendments, which are as follows:
Error Code 14 - ITR section 139(1) is considered defective if the assessee fills in a negative amount in the gross profits or net profits section
Error Code 8 - When the assessee files ITR-4S, even if the total presumptive income u/s 44AD is lesser than 8% of Gross turnover.
Error Code 31 - When the taxpayer has income from the head profits and gains from business/profession but does not file a profit and loss statement.
Error Code 38 - When tax is determined as payable in the ITR section 139(1) but not paid.
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The government collects taxes through three different means:
It is the constitutional obligation of every individual earning to compute his income and pay all the taxes correctly and on time to avoid any legal action.
All the books of account and related documents should be kept at the principal place of business, which means that generally where the business or profession is generally carried on. All the necessary documents shall be preserved for at least six years from the end of the relevant Assessment year, i.e., for a total of seven financial years from the end of the relevant year. When the assessment has been reopened, all the books of account and other documents that were kept and maintained at the time of reopening of the assessment should continue to be so kept and maintained till the assessment which has been reopened gets completed.
Under the Income-tax Law, the word income has a very broad and inclusive meaning. In the case of a salaried person, all that is received from an employer in cash, kind, or as a facility is considered as income. For a businessman, his net profit will constitute his income. Income may also flow from investments in the form of Interest, Dividends, Commission, etc. Further, income may be earned on account of the sale of capital assets like buildings, gold, etc.
Income shall be computed as per the relevant provision of the Income-tax Act, 1961, which lays down detailed conditions for the computation of income chargeable to tax under various heads of income.
Under the Income-tax Act, every person has the responsibility to correctly compute and pay his due taxes. Where the Department finds that there has been an understatement of income and resultant tax due, it takes measures to compute the actual tax amount that ought to have been paid. This demand raised on the person is called Tax on regular assessment. The tax on regular assessment-400 has to be paid within 30 days of receipt of the notice of demand.
The revenue functions of the Government of India are managed by the Ministry of Finance. The Finance Ministry has entrusted the task of administration of direct taxes like Income-tax, Wealth tax, etc, to the Central Board of Direct Taxes (CBDT). The CBDT is a part of the Department of Revenue in the Ministry of Finance.
CBDT provides essential inputs for policy framing and planning of direct taxes and also administers the direct tax laws through the Income-tax Department. Thus, Income-tax Law is administered by the Income-tax Department under the control and supervision of the CBDT.
Completion of assessment means assessment proceedings of the assessee are completed and closed.
There are various forms, Like ITR 1/2/3/4/5.
Forms are easily available on the Income Tax site.
Yes, ITR1 and ITR4 can be filed manually. It is specially done for senior citizens.
Taxpayers may get a notice from the Income Tax Department for not filing Income Tax Returns.
