Confused about filing I-T returns? Here's all you need to know about it

An individual is required to file a tax return when his total income exceeds the basic exemption limit of Rs 2.5 lakh, say experts

My grandfather gifted me two rooms on one floor of her bungalow in Chembur on May 1, 2018. The circle rate is Rs 85 lakh each. Do I need to mention it while filing returns?

An individual is required to report her assets and liabilities in the tax return form, if her income exceeds Rs 50 lakh for the relevant year. Accordingly, if your income exceeds this amount, you will need to report the cost of these two rooms in the Assets and Liabilities (AL) schedule of the applicable tax return form as you are now the owner of these rooms. The instructions for the return form also clarify that the cost of the asset to be reported under A&L schedule can be the cost to the previous owner, or circle rate, in case cost to the previous owner is not ascertainable. 

Please do refer to the instructions to the relevant forms for FY 2019-20, whenever these forms are notified so that you take note of any changes or additional details which you may need to disclose in this regard. 

I have been working for 19 years. I have three mobile wallets, like Paytm. I have money in them. I forgot to mention that in my returns. What do I do now?

An individual is required to report his assets and liabilities in the tax return form, in case his income exceeds Rs 50 lakh for the relevant year. Accordingly, if your income exceeds that amount, only then do you need to disclose the balance in your mobile wallets. The question arises whether the balance in these wallets should be regarded as Cash. If it is not Cash, can it be regarded as bank deposit, as the requirement is to show the balances with the bank? Well, there is no clear-cut clarification contained in the instructions to the tax return form. But for better disclosure, one may show these balances under bank deposits. You have the option to file a revised tax return for FY 2018-19 until March 31, 2020.

I have not filed returns for the last three years. What could my penalty be? I was working on a start-up during this period, but it failed.

From an individual tax compliance perspective, the first step is to determine whether you were required to file a return of income at all. An individual is required to file a tax return when his total income exceeds the basic exemption limit of Rs 2.5 lakh.  

Non-filing of return of income can lead to levy of penalty if tax is payable. In extreme cases, the tax authorities may even invoke prosecution provisions under Section 276CC of the Income Tax Act, 1961, subject to the satisfaction of conditions contained therein. 

A fee is mandatorily levied if you do not file your return of income within the due date for FY 2018-19 and onwards. You would need to pay fees under Section 234F of the Act of Rs 10,000 if you now file the return for the tax year 2018-19 before March 31, 2020 (Rs 1,000 if your income does not exceed Rs 5 lakh).

You will not be able to file a belated return for any of the previous years now considering those returns are time-barred. However, you should immediately file a belated return for FY 2018-19, if you had a filing obligation. If you miss the March 31, 2020 deadline for filing your return for FY 2018-19, you will not be able to file the return at all.

Further, if any taxes are payable, it should be paid before filing the return. Interest will also be levied on this amount. Since you have already missed the filing deadline, you will not be able to carry forward any loss (except house property loss), if any, incurred during the year. If there is a tax refund in your return, the income tax department will not pay you any interest from April 1, 2019, till the time you did not file the return.

The writer is partner and leader, personal tax, PwC India. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in