Understanding Sec 139(1) of Income Tax Return Filing

Section 139(1) Return of Income and Its Significance

The Income-tax Act, 1961 contains provisions for filing of return of income. Return of income is the format in which the assessee furnishes information as to his total income and tax payable. The format for filing of returns by different assessees is notified by the CBDT.

The particulars of income earned under different heads, gross total income, deductions from gross total income, total income and tax payable by the assessee are generally required to be furnished in a return of income. In short, a return of income is the declaration of income by the assessee in the prescribed format.

Compulsory Filing of Return of income

1. As per section 139(1), it is compulsory for companies and firms to file a return of income or loss for every previous year on or before the due date in the prescribed manner.

2. A return of income or loss for the previous year in the prescribed form and verified in the prescribed manner on or before the due date, has to be filed by every person, being a resident other than not ordinarily resident in India within the meaning of section 6(6), who is not required to furnish a return under section 139(1) if such person, at any time during the previous year

holds, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India or has a signing authority in any account located outside India or
is a beneficiary of any asset (including any financial interest in any entity) located outside

Requirement of filing of return of income as per the fourth and fifth proviso to section 139(1)

3. Further, every person, being an individual or a HUF or an AOP or BOI or an artificial juridical person -

whose total income or the total income of any other person in respect of which he is assessable under this Act during the previous year.
without giving effect to the exemption provisions contained in sections 54/54B/54D/ 54EC/54F/54G/54GA/54GB in respect of capital gains or deductions under Chapter VI-A exceeds the basic exemption limit.

For the A.Y. 2022-23, the basic exemption limit is ₹2,50,000 for individuals/HUFs/AOPs/BOIs and artificial juridical persons, ₹3,00,000 for resident individuals of the age of 60 years or more but less than 80 years and ₹5,00,000 for resident individuals of the age of 80 years or more at any time during the previous year.

These amounts denote the level of total income, which is arrived at after claiming exemption under sections 54/54B/54D/54EC/54F/54G/54GA/54GB in respect of capital gains and the admissible deductions under Chapter VI-A. However, the level of total income to be considered for the purpose of filing return of income is the income before claiming exemption under sections 54/54B/54D/54EC/54F/54G/54GA/54GB in respect of capital gains and the admissible deductions under Chapter VI-A.

4. In case of a person other than those mentioned in (1), (2) & (3) above, filing of return of income on or before the due date is mandatory, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeds the basic exemption.

5. All such persons mentioned in (1), (2), (3) & (4) above should, on or before the due date, furnish a return of his income or the income of such other person during the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.

6. Any person other than a company or a firm, who is not required to furnish a return under section 139(1), would have to file income-tax return in the prescribed form and manner on or before the due date if, during the previous year, such person –

has deposited an amount or aggregate of the amounts exceeding ₹ 1 crore in one or more current accounts maintained with a banking company or a co-operative bank or
has incurred expenditure of an amount or aggregate of the amounts exceeding ₹ 2 lakh for himself or any other person for travel to a foreign country or
has incurred expenditure of an amount or aggregate of the amounts exceeding ₹ 1 lakh towards consumption of electricity or
fulfils such other prescribed conditions

7. Meaning of "Due date" means

	Assessee	Due Date
(i)	Where the assessee, other than an assessee referred to in clause (ii), is a company, a person (other than a company) whose accounts are required to be audited under the Income-tax Act, 1961 or any other law in force; or a partner of a firm whose accounts are required to be audited under the Income-tax Act, 1961 or any other law for the time being in force or the spouse of such partner if the provisions of section 5A applies to such spouse.	31st October of the assessment year
(ii)	in the case of an assessee including the partners of the firm or the spouse of such partner (if the provisions of section 5A applies to such spouse), being such assessee who is required to furnish a report referred to in section 92E.	30th November of the assessment year
(iii)	in the case of any other assessee.	31st July of the assessment year

8. Apportionment of income between spouses governed by Portuguese Civil Code (Section 5A)

Where the husband and wife are governed by the system of community of property (known under the Portuguese Civil Code of 1860 as "COMMUNIAO DOS BENS") in force in the State of Goa and in the Union territories of Dadra and Nagar Haveli and Daman and Diu:

Income under the head “Salaries”- Where the husband or, as the case may be, the wife governed by the aforesaid system of community of property has any income under the head "Salaries", such income shall be included in the total income of the spouse who has actually earned it [Section 5A(2)]
Income under any head of income (other than under the head "Salaries") - The income of the husband and of the wife under any head of income shall not be assessed as that of such community of property (whether treated as an association of persons or a body of individuals), but such income of the husband and of the wife under each head of income (other than under the head "Salaries") shall be apportioned equally between the husband and the wife and the income so apportioned shall be included separately in the total income of the husband and of the wife respectively, and the remaining provisions of this Act shall apply accordingly [Section 5A(1)]

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CAANKUR KUMAR

FCA, B.COM having 10 Years of Experience the Field of Income Tax and Finance

Compulsory Filing Of Return Of Income [Section 139(1)]