What source of revenue tax regulations say about submitting an ITR with a brand new source of revenue tax regime
If the closing date for submitting an ITR is neglected, a person can report a past due ITR the use of most effective the previous source of revenue tax regime. The 2020 Finance Act offered a brand new source of revenue tax regime that got here into impact from fiscal yr 2020-21 (April 1, 2020). The Treasury Act obviously states that with a purpose to have the benefit of the advantages underneath the brand new regime, a person will have to report their ITR via the due date (in most cases July 31 except the federal government extends it) in keeping with phase 139(1) of the Treasury Act. source of revenue tax. , 1961 If the source of revenue tax go back is filed past due, the taxpayer will be unable to say advantages at decrease tax charges, as equipped for within the new tax regime, and the present, previous source of revenue tax charges will practice.
Because of the truth that the good thing about decrease taxes may not be to be had if a past due submitting of an ITR underneath phase 139(4) of the Act, past due submitting ITRs will run into issues if they have got calculated their tax burden underneath the brand new tax mode.
Now, such taxpayers are anticipated to settle their tax liabilities underneath the previous tax regime. This may increasingly lead to an greater tax legal responsibility and, in consequence, upper past due rates of interest on further tax bills, along with past due charges, as set out in phase 234F.
Let’s perceive upper tax liabilities with an instance.
Mr. A had a gross overall source of revenue of 18 lakhs from wages and passion source of revenue and no funding used to be made in LIC, reserve fund and medical insurance all through the yr in query. Mr. A opted for a brand new tax regime and an advance tax of Rs 2,88,600 used to be paid accordingly. Then again, Mr. A. did not report his source of revenue tax go back inside the cut-off date set via phase 139(1). The 139(4) belated declaration will now be filed underneath the previous tax regime.
Subsequently, if you wish to obtain advantages underneath the brand new tax regime, report your source of revenue tax go back on time. In a different way, you’ll now not most effective incur consequences for past due submitting of the go back, but in addition incur upper tax liabilities.
Who is needed to report an ITR?
The Source of revenue Tax Act calls for eligible taxpayers to file their source of revenue and belongings every year to the source of revenue tax division. A taxpayer is a person, synthetic criminal entity, team of people, Hindu undivided circle of relatives, affiliation of people, company, believe, corporate or society.
Accordingly, as a common rule, an ITR will have to be filed inside of a specified cut-off date, except for in sure eventualities underneath phase 139(1) of the Source of revenue Tax Act 1961. Below Segment 139(1), the next cases require the submitting of an ITR:
- Any person whose overall source of revenue exceeds the exemption threshold will have to report an source of revenue tax go back via the due date.
- Any group, together with an LLP (restricted partnership) or common partnership;
- Any resident who has an asset situated out of doors of India (which might also come with a monetary passion in any criminal entity); OR any resident conserving signatory authority for an account situated out of doors of India. This rule applies to all of the above entities. Without reference to the quantity of tax due on those earning, the tax go back will have to be finished at the licensed shape.
- If the mixed source of revenue of any HUF (Hindu Undivided Circle of relatives), AOP (affiliation of individuals) or BOI (affiliation of people) exceeds the established exemption prohibit, they will have to report an source of revenue tax go back within the prescribed structure with the specified paperwork.
(The creator is a spouse, IP Pasricha & Co. – a chartered accounting company.)