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Income Tax Return Filing – Financial Year 2017-18 (Assessment Year 2018-19)

Are you unsure about whether you should file an income tax return in India? Read on to know more.

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Undeniably, the arrival of online or electronic income tax return filing portals (other than that of the government’s) has made the ITR filing process fairly quick and convenient in the last few years. However, many taxpayers and retirees still find the procedure daunting and tedious and can find numerous excuses to postpone this activity. Until Assessment Year 2017-18, you could get away with putting this off even after the D-day 31st July. Now, there are some legal consequences for late filing and evasion, which this article will explore. Let’s understand whether you are required to file an Income Tax Return in India for FY 2017-18
  1. Mandatory Filing
  2. Income Tax Return Filing for NRIs
  3. Why e-file income tax return
  4. Penalties for non-filing income tax return
   

File Income Tax Return

 

1. Mandatory Filing

    1. In any of the following situations (as per the Income Tax Act), it is mandatory for you to file an Income Tax Return in India.
 
    1. Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs. 2.5 lakhs in the FY 2017-18. This limit is Rs 3 lakh for senior citizens (aged above 60 but less than 80) or Rs 5 lakhs for super senior citizens (aged above 80)
 
    1. You are a company or a firm irrespective of whether you have income or loss during the financial year
 
    1. You want to claim an income tax refund
 
    1. You want to carry forward a loss under a head of income
 
    1. You have exempt long-term capital gains from – sale of equity shares in a company OR sale of unit of equity oriented mutual funds, OR sale of a unit of a business trust, of more than Rs 2.5 lakhs in a financial year. Even though these gains are exempt from tax, such persons have to mandatorily file an income tax return. [effective FY 2016-17, AY 2017-18]
 
    1. Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs)
 
    1. If you are a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs)
 
    1. You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust
 
    1. If you are a foreign company taking treaty benefit on a transaction in India
 
    1. A proof of return filing may also be required at the time of applying for a loan or a visa
   

2. Income Tax Return Filing for NRIs

NRI or not, any individual whose income exceeds Rs. 2.5 lakhs (for FY 2017-18) is required to file an income tax return in India. Please note that for an NRI, income earned or accrued in India is taxable in India.

3. Why e-file income tax return

A significantly large number of returns are e-filed and gradually the income tax department is hoping to bring all returns online. In any of the following cases, the Income Tax Department has made it mandatory to e-file your Return.

a. You want to claim an income tax refund

 

b. Your taxable income is more than Rs 5,00,000

 

c. ITR-3, 4, 5, 6, 7 have to be mandatorily e-filed

Paper returns can only be filed by those who are above 80 years of age OR by an individual or HUF whose income does not exceed Rs 5,00,000 and who has not claimed any refund in the return of income. Super senior citizen  

4. Penalties for non-filing income tax return

Under section 271F, the assessing officer may levy a penalty of Rs 5.000 when you have not filed your return. (applicable until FY 2016-17). This changed from FY 2017-18. From this year onwards, penalties for non-filing an income tax return are as follows. a. Penalty of Rs 5,000 is applicable if Return for FY 2017-18 is filed after the due date (31st August 2018) but by 31st December 2018 b. Penalty of Rs 10,000 is applicable if Return for FY 2017-18 is filed after 31st December 2018 but by 31st March 2019 Note: Penalty is limited to Rs 1,000 for those with income up to Rs 5 lakhs. These provisions are covered under a new Section 234F.

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– If you have missed the due date to file your return, you can still file it before 31 Dec 2018 by paying a fee of Rs 5,000. If you are filing after 31 December 2018, you will have to pay a fee of Rs 10,000. Also to note that the time limit for filing a return late for FY 2017-18 expires on 31 March 2019.