/ INCOME TAX

All about Section 139 of Income Tax Act 1961,

All about Section 139 of Income Tax Act 1961

All about Section 139 of Income Tax Act 1961

Section 139 of Income Tax Act 1961:

  • According to the rules and regulations of our constitution, everyone in India who works and earns a substantial income is required to pay income tax. Knowledge of the various aspects of Income Tax is also essential. As a result, educating oneself on this subject should be regarded as important.

Introduction:

  • The Income Tax Department of India has divided an Indian citizen’s income into five major categories based on the sources of income. Salary, residential property, business, capital gains, and other sources are the key components of these five categories. Every individual with a source of income is required to pay income tax to the government. Everyone is required to file their tax returns by a specific deadline. Every Indian citizen is encouraged to follow these recommendations, which are grouped into many categories to deal with various forms of returns.
  • Several subsections of Section 139 of the Income Tax Act of 1961 define rules and regulations for various scenarios and circumstances. The following section will go into greater detail about them.

Section 139(1) – Mandatory and Voluntary Returns- Normal Income Tax Returns:

Section 139(1) addresses the mandatory return policies that must be followed when filing the Income Tax Return. The entities listed below must file their tax returns.

  • Anyone whose total income exceeds the exemption level is required to file an income tax return by the specified deadline.
  • Any private, public, domestic, or foreign entity based in India or conducting business there.
  • Firms, such as LLPs (Limited Liability Partnerships) or ULPs (Unlimited Liability Partnerships) (Unlimited Liability Partnership).
  • Residents with assets located outside of India, or any entity with authority over an account located outside of India.
  • If their income exceeds the prescribed exception limit, every HUF (Hindu Undivided Family), AOP (Association of Persons), and BOI (Body of Individuals) must file an Income Tax Return.
  • Voluntary Tax Returns are those in which individuals or entities are not required to file a return.
  • Certain classes of people who meet a certain condition are exempt from filing a tax return under Section 139(1c). When sessions are held immediately following the notification, the issued notice should be placed before each House of Parliament for 30 days. The notification will only be effective if both Houses agree.

Section 139(3) – Filing Income Tax Return in case of Loss

In the event of a loss, you must file an income tax return.

Section 139(3) of the Income tax Act governs the filing of income tax returns in the event of a loss. When there are losses, it is normally beneficial to file a return because the loss can be carried over, lowering the tax bill in subsequent years. The following are cases that have been specifically specified.

  • If the loss occurred in the prior fiscal year, an Individual Taxpayer is not required to file a tax return. In the case of a loss in a company or organization, however, a tax return for a loss is required.
  • If a company’s loss comes under the heading of “Profits and Gains of Business and Profession” or “Capital Gains,” filing a tax return is required if the company wants to carry forward the loss and offset it with future income. Only if the tax return is filed by the due date is this option available.
  • Other losses filed under Section 142(1), with the exception of “House and Property,” cannot be carried forward, leaving out the unabsorbed depreciation value.
  • Alternatively, if a loss is offset against income in another category for the same year, offset is allowed even if the return is filed after the due date.
  • Losses from previous years can be carried forward if the return is filed by the due dates after the losses have been assessed.

 Section 139(4) – Late Income Tax Return- Belated Income Tax Return

  • It is recommended that a taxpayer, whether an individual or a business, file their tax return by the due date specified in Section 139(1) of the act.
  • If the return file is still late, there is still the option of filing a belated return for prior years until the expiry date of the current applicable year of assessment or before the fiscal year is completed. Nonetheless, if the taxpayer fails again, a 5,000 rupee penalty is imposed under Section 271F of the IT Act, 1961. If the income did not necessitate mandatory filing as defined in Section 139(1) and the return was filed after the due date, the penalty can be avoided.

Section 139(5) – Revised Return- Income Tax Return Revised:

  • It is possible that the Income Tax Return was filed on time, but errors occurred. Section 139 allows the taxpayer to correct any errors in the file for revising the income tax return (5).
  • It can be filed at any point during the relevant assessment year or before the evaluation is completed, whichever comes fIncome tax Dept. t. There is no limit to how often you can revise your tax return file as long as you stay inside the deadline. Revising can be done in the same form or by submitting a different return form. Once the new return is filed, the original return will be considered withdrawn.
  • It should be noted that Section 139(5) applies only to “omissions and incorrect statements,” not “concealment or false statements.” As a result, only unintentional errors can be corrected; otherwise, the penalty is imposed.

Section 139(4a) – ITR of Charitable and Religious Trusts

Charitable Trusts:

  • Some individuals get their money from property that is legally obligated to be used for religious or charitable purposes, either entirely or partially. It can also be voluntary contribution income, as defined in subsection 2(24). (iia).
  • If the gross total income exceeds the maximum allowable amount that is not taxable under income tax, the tax return must be filed under Section 139(4A) in both cases.

Section 139(4b) – Political Party to Furnish the ITR’s –Political Parties:

  • Section 139(4B) requires political parties to file an income tax return if their total income is made up primarily of voluntary contributions from the general public–exceeds the maximum allowable tax-free threshold The Chief Executive Officer or Secretary is in charge of filing the tax return by the due date.

Section 139(4c) & Section 139(4d) – ITR’s of entities claiming Exemption U/s 10

Exemption U/s 10 with relation to ITR:

  • There are certain institutions that can claim certain benefits under Section 10 of the Income Tax Act of 1961, and for their tax returns, Section 139(4C) and Section 139(4D) must be used.
  • Section 139(4C) includes institutions for which a tax return is required if the maximum allowable limit exceeds the maximum cap of tax exemption, which shall exclude other exemption benefits enjoyed by the institution.

These institutions are primarily the following organizations and agencies.

  • Associations engaged in scientific research
  • Institutions or associations under Section 10(23A)
  • News agencies
  • Institutions under Section 10(23B)
  • Educational and Medical Institutions, Universities and Hospitals

Return file is not applicable to all colleges, universities, and institutions under Section 139(4D), and they are not required to file tax returns of income and loss under any specific provision in this section. Sections 31(1)(ii) and 35(1)(iii) of the IT Act are covered by this section.

Section 139(9) – Defective Returns- Defective Income Tax Returns

If documents are missing, a tax return may be deemed defective under Section 139(9). A defective return must be determined by the taxpayer, and the taxpayer must be notified in writing. A fifteen-day window will be set aside to resolve the issue and produce the missing documents. The period may also be extended at the taxpayer’s request if valid reasons are provided. As a result, you must keep the following documents in mind for your file to avoid being deemed defective.

  • A statement displaying the amount of taxes owed.
  • Filed a tax return in the proper format.
  • Proofs of all tax-paying claims.
  • A report is provided prior to filing the return. This auditing report is required under Section 44AB.
  • Copies of the audit report, balance sheet, and auditor’s profit and loss accounts in the event that the tax payer’s account is audited.
  • In the case of a cost audit, the relevant report.
  • If the taxpayer does not keep an accounting book, a statement indicating gross receipts, turnover amount, bank balance, stocks, cash, debtors or creditors information, expenses and net profit, etc. is required.
  • If the taxpayer keeps a book of accounts, these mandatory copies are required.
  • All profit and loss accounts, manufacturing accounts, trading accounts, balance sheet, and income and expense accounts.
  • In the case of partnership firms, personal accounts of partners
  • All members must produce their personal accounts for AOP/BOI.
  • Personal account of the proprietor

Deadlines for Income tax return U/s 139

Due to the fact that various people earn money in different ways, Section 139 has established due dates for the specific necessity of filing income tax reports. The following are the dates:

  • July 31st- Several people and entities do not require an audit report to validate their accounts. Every assessment year, these individuals and entities must file their income tax returns by July 31. A paid employee, a self-employed or professional, a freelancer, or a consultant are examples of these entities.
  • September 30th- Various other entities are required to have their accounting books audited, and they have until September 30th to file their tax returns. This category includes a business entity and a working partner employed by a firm or consultant who has an audit performed on their accounting books.

Form ITR 7 Related to Section 139

For all people and companies required to file a return under the income tax Dept. t four portions of Section 139, the Income Tax Department has produced form ITR-7. It is recommended that taxpayers use Form 26AS or the Tax Credit Statement to match their tax numbers of paid and deducted amounts.

To file the Form ITR-7 with the IT Department, use one of the procedures listed below:

  • Paper form
  • E-Form using a digital signature
  • Data delivery through electronic means, followed by submission and verification of the Form ITR-V return.
  • Sub -Section 4E of the 139 provides for the filing of a return for the income of other business trusts that are not required to provide profit and loss statements.

e verification

Conclusion:

  • Certain amendments to Section 139 of the Income Tax Act have been made in recent years. These mostly consist of adjustments to clauses and statements to facilitate information exchange.
  • There are various provisions to conveniently review defective forms for various taxpayers and also for revision of scope. The due date and the extension provided should be aware, if applicable.
  • The special provisions must also be noted in their separate categories and all documents must be produced for the acceptance of the form.
  • This essential task has now been made easier and convenient by the latest online portals so that someone can check their entire accounts at once and perform the tax payment duties quite easily.

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