Taxmann's FAQ's on ITR Forms

Taxmann Review Bulletin
A quick review of important Taxes & Laws updates reported on Taxmann.com
September 2020
FAQs on Income-tax Returns for
Assessment Year 2020-21

Hand
Sanitization
Mandatory
Masks Gloves
Temperature
Checks
Use of
Aarogya Setu App
Sanitizing Wipes with Books
Taxmann Books Orders Follow All
SAFETY GUIDELINES

FAQs on Income-tax Returns for Assessment Year 2020-21
Applicable ITR Forms 01
Reporting in Schedules 07
Filing of Returns 13
Aadhaar-PAN linking 19
Presumptive Taxation 21
Capital Gains 23
Tax payment, TDS, TCS and refund 27
Deductions Rebate 33
Set-off of losses 35
Income taxable in the hands of other person 37
CONTENTS

Q1. Which form should a taxpayer fill up to file his income-tax return for the assessment
year 2020-21?
Applicable ITR Forms
Nature of income ITR 1* ITR 2 ITR 3 ITR 4*
Salary Income
Income from salary/pension (for ordinarily resident person) ✓ ✓ ✓ ✓
Income from salary/pension ✓ ✓
(for not ordinarily resident and non-resident person)
Any individual who is a Director in any company ✓ ✓
Income from House Property
Income or loss from one house property (excluding brought ✓ ✓ ✓ ✓
forward losses and losses to be carried forward)
Individual has brought forward loss or losses to be carried ✓ ✓
forward under the head House Property
Income from Business or Profession
Income from business or profession ✓
Income from presumptive business or profession covered ✓
under section 44AD, 44ADA and 44AE
(for a person resident in India)
Income from presumptive business or profession covered ✓
under section 44AD, 44ADA and 44AE
Interest, salary, bonus, commission or share of profit received ✓
by a partner from a partnership firm
Capital Gains
ITaxpayer has held unlisted equity shares at any time during ✓ ✓
the previous year
Capital gains/loss on the sale of investments/property ✓ ✓

Taxmann Review Bulletin | September 2020 02
Income from Other Sources
Family Pension (for ordinarily resident person) ✓ ✓ ✓ ✓
Family Pension ✓ ✓
Income from other sources (other than income chargeable to ✓ ✓ ✓ ✓
tax at special rates including winnings from lottery and
race-horses or losses under this head)
Income from other sources (including income chargeable to ✓ ✓
tax at special rates including winnings from lottery and
race-horses or losses under this head)
Dividend income exceeding Rs. 10 lakhs taxable ✓ ✓
under Section 115BBDA
Unexplained income (i.e., cash credit, unexplained investment, etc.) ✓ ✓
taxable at 60% under Section 115BBE
Person claiming deduction under Section 57 from income taxable ✓ ✓
under the head ‘Other Sources’
(other than deduction allowed from the family pension)
Deductions
Person claiming deduction under Section 80QQB or 80RRB in ✓ ✓
respect of royalty from patent or books
Person claiming deduction under section 10AA or ✓ ✓
Part-C of Chapter VI-A
Total Income
Agricultural income exceeding Rs. 5,000 ✓ ✓
Total income exceeding Rs. 50 lakhs ✓ ✓
Assessee has any brought forward losses or losses to be ✓ ✓
carried forward under any head of income
Computation of Tax liability
If an individual is taxable in respect of an income but TDS in ✓ ✓
respect of such income has been deducted in the hands of any
other person (i.e., clubbing of income, Portuguese Civil Code, etc.) ✓ ✓
Claiming relief of tax under sections 90, 90A or 91
Others
Assessee has: ✓ ✓
Income from foreign sources
Foreign Assets including financial interest in any foreign entity
Signing authority in any account outside India
Income has to be apportioned in accordance with Section 5A ✓ ✓
* ITR-1 can be filed by an Individual only who is ordinarily resident in India. ITR-4 can be filed only by an Individual or HUF who is
ordinarily resident in India and by a firm (other than LLP) resident in India.

Other Assessees
Status of Assessee ITR 4 ITR 5 ITR 6 ITR 7
Firm (excluding LLPs) opting for presumptive taxation scheme ✓
of section 44AD, 44ADA or 44AE
Firm (including LLPs) ✓
Association of Persons (AOPs) ✓
Body of Individuals (BOI) ✓
Local Authority ✓
Artificial Juridical Person ✓
Companies other than companies claiming exemption ✓
under Section 11
Persons including companies required to furnish return under: ✓
Section 139(4A);
Section 139(4B);
Section 139(4C);
Section 139(4D);
Business Trust ✓
Investment Fund as referred to in Section 115UB ✓
ITR-1 (Sahaj)
Who can file return in Return in Form ITR 1 can be filed by an Ordinary Resident Individual
ITR 1 (Sahaj)? (not HUF) if his total income includes:
1. Salary or pension
2. Income or loss from one house property (excluding brought
3. Family pension
4. Income from other sources (other than income chargeable to
tax at special rates)
If the income of another person (spouse, minor child, etc.) has to be
clubbed with the income of the assessee, return in ITR 1 can be filed
only when such income falls in any of the above categories. However,
if tax has been deducted in the name of such other person and
assessee wishes to claim its credit, then he cannot file return in ITR 1.
Who can't file return Return in ITR 1 cannot be filed by an individual:
in ITR 1? 1. Who is a Non-resident or Not Ordinarily Resident
2. Who is a Director of a company
3. Whose total income exceeds Rs. 50 lakhs
4. Who has income from more than 1 house property
5. Who has held unlisted equity shares at any time during
the previous year
6. Who claims a deduction under Section 80QQB or Section 80RRB
in respect of royalty from patents or books
7. Who claims a deduction under Section 10AA or Part-C of
Chapter VI-A

8. Who has brought forward loss or losses to be carried forward
under any head
9. Who wants to claim relief under Section 90 or 91
10. Who has any assets (including Financial Interest in an entity)
located outside India.
11. Who has signing authority in any account outside India
12. Who has any income to be apportioned in accordance with
provisions of Section 5A
13. Who has any of the following income:
a) Income from Business or Profession
b) Capital Gains
c) Income taxable under the head ‘Other sources’ which is
taxable at special rate
d) Dividend income exceeding Rs. 10 lakhs taxable
e) Unexplained income (i.e., cash credit, unexplained investment,
etc.) taxable at 60% under Section 115BBE
f) Agricultural Income exceeding Rs. 5,000
g) Person claiming deduction under Section 57 from income
taxable under the head ‘Other Sources’(other than deduction
allowed from family pension)
h) Income from any source outside India
ITR-2
Who can file return in Return in ITR 2 can be filed by an individual and an HUF, whether
ITR 2? resident or non-resident, in respect of following incomes:
2. Income or loss from one or more house properties
3. Income or loss under the head ‘Capital Gains’
4. Income under the head ‘Other sources’
(including income chargeable at special rates)
If income of another person (spouse, minor child, etc.) is to be
clubbed with the income of taxpayer, return in ITR-2 can be filed only
when such income falls in any of the above categories.
Who can't file return in Return in ITR 2 cannot be filed by an individual or HUF if he/it has
ITR 2? income chargeable to tax under the head 'Profit or gains from
business or profession' or he wants to claim deduction
under Section 10AA or Part-C of Chapter VI-A.
ITR-3
Who can file return in Income-tax return can be filed in ITR 3 by an Individual or an HUF if
ITR 3 he/it has income from business or profession.
Who can't file return in Return in ITR 3 cannot be filed by any person other than an
ITR 3? individual oran HUF.
ITR-4 (Sugam)
Who can file return in Return in ITR 4 (Sugam) can be filed by an Ordinary Resident
ITR 4 (Sugam)? Individual or HUF or Firm (other than a LLP) if his/its total income
includes:
1. Presumptive Income computed as per provisions of Sections
44AD, Section 44ADA or Section 44AE
3. Income or loss from one house property (excluding brought
4. Family pension

5. Income from other sources (other than income chargeable to tax
at special rates)
If income of another person (spouse, minor child, etc.) is to be
clubbed with the income of assessee, return in ITR 4 can be filed only
when income of such person falls in any of the above categories.
However, if tax has been deducted in the name of such other person
and assessee wants to claim its credit, then he cannot file return in
ITR-4.
Who can't file return in Return in ITR 4 (Sugam) cannot be filed by an assessee:
ITR 4 (Sugam)? 1. Who is a Non-resident or Not Ordinarily Resident
2. Who is a Director of a company
3. Whose total income exceeds Rs. 50 lakhs
4. Who has income from more than 1 House Property
5. Who has held unlisted equity shares at any time during the
previous year
6. Who claims deduction under section 80QQB or 80RRB in respect
of royalty from patent or books
7. Who claims deduction under section 10AA or Part-C of
Chapter VI-A
8. Who has brought forward loss or losses to be carried forward
under any head
9. Who wants to claim relief under Sections 90 or 91
10. Who has any assets (including Financial Interest in an entity)
located outside India.
11. Who has signing authority in any account outside India
12. Who has any income to be apportioned in accordance with
provisions of Section 5A
13. Who has any of the following income:
a) Income from Business or Profession
b) Capital Gains or Loss
c) Income taxable under the head ‘Other sources’ which is
taxable at a special rate
d) Dividend income exceeding Rs. 10 lakhs taxable
e) Unexplained income (i.e., cash credit, unexplained investment,
etc.) taxable at 60% under Section 115BBE
f) Agricultural Income exceeding Rs. 5,000
g) Person claiming deduction under Section 57 from income
taxable under the head ‘Other Sources’ (other than deduction
allowed from the family pension)
h) Income from any source outside India
i) Income from speculative business and other special incomes.
j) Income from agency business or commission or brokerage
If assessee is eligible for presumptive tax scheme of section 44AD or
Section 44AE, or section 44ADA but he does not opt for the same,
then he shall maintain books of account and get them audited. Thus,
the assessee has to file ITR-3 instead of ITR-4 in such a case.

Q2. What should be the 'relevant accounting period’ for reporting of foreign assets in
Schedule FA?
Reporting in Schedule FA (Foreign Assets) is mandatory for a taxpayer who is a resident in India
and holds any asset outside India or have signing authority in any account located outside India or
have income from any source outside India. It is not required to be filed by a taxpayer who is a Non-
resident (NR) or a Not ordinarily Resident (NOR).
Schedule FA requires reporting of assets held outside India. Such reporting is required only if those
assets are held at any time during the relevant accounting period. Reporting is required even if the
asset is held for a single day during the relevant accounting period.
The term Accounting period is not defined under the Income-tax Act, 1961. However, CBDT's
instructions provide the meaning of the term accounting period for the Assessment Year 2019-
20. These instructions can be used mutatis-mutandis for the assessment year 2020-21. Thus, the
relevant accounting period for the assessment year 2020-21 shall be as follows:
Accounting Period Applicable to a foreign jurisdiction where
01-01-2019 to 31-12-2019 Calendar year is adopted as the basis for closing of
accounts and tax filings
01-04-2019 to 31-03-2020 Financial year is adopted as the basis for closing of
accounts and tax filings
The period of 12 months ending Any other period of 12 months is adopted as basis for
any day succeeding April 1, 2019 closing of accounts and tax filings
Thus, if a taxpayer has held the foreign assets in the relevant accounting period as applicable to the
foreign jurisdiction, reporting of such assets is mandatory in the ITR forms.
Example, Mr A, an Indian Resident, has acquired a flat in the USA in May 2019 and sold the same in
October 2019. The USA follows calendar year for accounting and tax filings. Hence, the period of 01-01-
2019 to 31-12-2019 is the accounting period for the Assessment Year 2020-21. Thus, Mr A is required to
report details of such flat in Schedule FA for the ITR applicable for Assessment Year 2020-21.
Q3. How to do reporting in Schedule FA if a transaction falls outside the accounting
period but within the previous year?
The CBDT has clarified1
that a taxpayer shall be required to report foreign assets only if such assets
1. Circular no. 21/2019, dated 27-8-2019
Reporting in Schedules

have been held at any time during the previous year (in India) as also during the 'relevant accounting
period' (in the foreign tax jurisdiction).
Q4. I have paid taxes in Foreign Country while doing project work for 3 months. How
can I claim credit of those taxes in ITR?
If an assessee has paid tax in any foreign country or specified territory outside India, he shall be
allowed a credit for the same, by way of deduction or otherwise. The credit shall be allowed in the
year in which assessee offered such income to tax or assessed to tax in India. Rule 128 of Income-tax
Rules 1962 lays down broad principles and conditions for computation and claim of foreign taxes
paid in overseas countries by the resident taxpayers.
A statement of foreign income offered to tax and the foreign tax deducted or paid on such income
is required to be submitted in Form No. 67 and the certificate or statement specifying the nature of
income and foreign tax deducted or paid are required to be furnished on or before the due date for
filing of ITR.
The Form is required to be furnished electronically through the e-filing portal of the Income-tax
department. Further, the details of tax relief claimed for taxes paid outside India is required to be
reported in ‘Schedule TR’ of ITR form.
Q5. How to opt for lower tax regime under section 115BAA 115BAB while filing ITR?
The Taxation Laws (Amendment) Act, 2019 inserted two new sections - Section 115BAA and Section
115BAB under the Income Tax Act. Section 115BAA provides for a reduced tax rate of 22% in case of
a domestic company whose total income is computed without providing for specified exemption,
deduction or incentive available under the Act. Section 115BAB provides for a reduced tax rate of 15%
in case of those domestic manufacturing companies which have been incorporated on or after 01-
10-2019 and whose total income is computed without providing for specified exemption, deduction
or incentive available under the Act.
If a company wants to opt for lower tax regime under section 115BAA or 115BAB, it has to make an
application to exercise the option by filing Form No. 10-IC or Form No. 10-ID respectively. The option
to avail of the lower tax regime under Section 115BAA or 115BAB must be exercised on or before the
due date of furnishing return of income under Section 139(1).
The option in Form No. 10-IC or 10-ID shall be furnished electronically either under digital signature or
electronic verification code. This option, once exercised for any previous year, cannot be subsequently
withdrawn for the same or any other previous year.
The department has enabled e-filing of these forms. They can be accessed from ‘efile Income Tax
forms’.
Company opting for lower tax regime is required to furnish detail of same under ‘Part-A’ of ITR forms
as well.

Q6. In case unlisted equity shares have been held during the year by way of gift, will,
amalgamation etc. How to report the cost of acquisition and sale consideration
in ITR?
To keep a check on the issue of shares by a closely held companies and investment made therein by
shareholders, a new table has been inserted in ITR forms (ITR-2, ITR-3 ITR-5] to seek the following
details in respect of unlisted equity shares held at any time during the previous year by an assessee:
a) Name of the company;
b) PAN of the company;
c) No. and cost of acquisition of shares held at the beginning of the year;
d) No. of shares, face value, issue price (or purchase price) and date of purchase of shares
acquired during the year;
e) No. and sale consideration of shares transferred during the year; and
f) No. and cost of acquisition of shares held at the end of the previous year.
In case the ‘cost of acquisition’ or ‘sale consideration’ of unlisted shares is not ascertainable because
those shares were held by way of gift, will, amalgamation, etc. then assessee may enter zero or the
appropriate value in respective fields.
The details furnished in this table are required only for the purpose of reporting and not relevant for
the purpose of computation of total income or tax liability2
.
Q7. Whether a farmer producer company is required to furnish details of shareholding
in the Schedule SH-1 of ITR-6?
The Schedule SH-1 of ITR-6 is applicable only in case of an unlisted company. It seeks shareholding
details such as details of shareholding at the end of the previous year, details of equity share
application money pending allotment and details of a person who was a shareholder at any time
during the previous year.
As per the provisions of the section 581C of the Companies Act, 1956, a producer company is always
deemed as a private limited company. Thus, it may be liable to provide details shareholding details
in the SH-1 schedule.
However, the CBDT has clarified3
that a farmer producer company as defined in section 581A of
Companies Act, 1956 is not required to furnish details of shareholding in the Schedule SH-1 of ITR-6.
However, it is mandatory to tick the option “Yes” in the “Part-A General” of the ITR-6 against the item
“whether the company is a Producer Company as defined in section 581A of Companies Act, 1956?”
Q8. Whether details of Foreign Assets to be reported in Schedule AL if they have been
duly reported in Schedule FA?
Schedule AL in Income-tax returns requires individuals/HUFs to declare the value of assets and
liabilities if their total income exceeds Rs. 50 lakhs. Further, Schedule FA requires reporting of assets
held outside India. Reporting in Schedule FA is mandatory for a taxpayer who is a resident in India.
It is not required to be filed by a taxpayer who is a Non-resident (NR) or a Not ordinarily Resident
(NOR). Though both the schedules require reporting yet they serve different purpose. Schedule FA
seeks details of foreign assets and income from any source outside India. An assessee has to enter
details of foreign assets if they were held even for a single day during the relevant accounting period.
On the other hand, Schedule AL seeks details of assets and liabilities which assessee holds at the end
of the previous year. Therefore, details of foreign assets to be reported in schedule AL if the same is
held by the assessee at the end of the previous year.

Q9. What will be my residential status if I couldn’t travel back to my country due to
Covid-19 or vice-versa?
Section 6 of the Income-tax Act provides the manner of determination of the residential status of an
assessee. Residential status of an individual is determined based on the period for which he has been
in India during a previous year or years preceding the previous years.
Due to the declaration of the lockdown and suspension of international flights owing to the outbreak
of COVID-19, the travellers who could not travel back to the resident country had to prolong their
stay in India. Concerns have been raised to the CBDT to exclude the period of forceful stay in India
while determining the residential status in India as per section 6.
To avoid genuine hardship, the CBDT has clarified4
that while determining the residential status of
an individual during the previous year 2019-20, the following period shall be excluded:
Q10. I have donated Rs. 2 lakhs to PM CARES Fund in April 2020. Can I claim deduction
under section 80G for the Financial Year 2019-20?
A person is eligible to claim deduction under section 80G in the financial year in which payment is
made to prescribed funds, institutions or associations, etc. Thus, Rs. 2 lakhs donated to PM CARES
Fund is eligible for deduction in the Financial Year 2020-21.
However, the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020,
promulgated by the President of India on 31-03-2020, has extended the time-limit till 30-06-2020
to make investments, deposits, payments, etc. for the financial year 2019-20 for claiming deduction
under Chapter VI-A, section 10AA and till 30-09-20205
for exemptions under sections 54 to 54GB.
Accordingly, a new Schedule DI has been inserted in the ITR forms to allow taxpayers to avail the
deduction for the investments/deposits made during the extended period.
'Schedule DI' is bifurcated into the following three parts:
a) Part A seeks details of the investment, deposit, or payments made to claim deduction
under Chapter VI-A;
b) Part B seeks detail of eligible amount of deduction available under section 10AA; and
c) Part C seeks details of payment, acquisition, purchase or construction made to claim deduction
under Sections 54 to 54GB.
Q11. Whether individuals are required to mention details of assets and liabilities in ITR
1 (Sahaj)?
Individuals/HUFs are required to furnish details of assets and liabilities at year-end only when their
taxable income exceeds Rs. 50 lakhs. The Schedule AL wherein the details of assets and liabilities are
to be furnished is available only in ITR-2 and ITR-3. Thus, the individual or a HUF who has to report
4. Circular No. 11, dated 8-5-2020
5. The date was further extended by the Notification No. 35/2020, dated 24-06-2020
Category of Individuals who have come to India on a Period of stay in India not
visit on or before 22-03-2020. to be considered
Who were unable to leave India on or before 31-03-2020 22-03-2020 To 31-03- 2020
Who has been quarantined in India on or after 01-03-2020 Beginning of his quarantine
and has departed on an evacuation flight on or period to his date of departure
before 31-03-2020 or has been unable to leave India on or 31-03-2020
or before 31-03-2020 (as the case may be)
Who has departed on an evacuation flight on or 22-03-2020 to his date of
before 31-03-2020 departure

the details of assets and liabilities has to opt for filing of return in ITR 2 or ITR 3 on criteria given in
FAQ No. 1.
Q12. My income is Rs 60 lakhs. Which details about assets and liabilities do I need to
mention in income-tax return?
Schedule AL requires individuals/HUFs to declare the value of assets and liabilities if their total
income exceeds Rs. 50 lakhs. If a taxpayer is required to provide information in this Schedule, he shall
provide the details of cost of immovable property, jewellery, vehicles, shares, bank and cash balance,
etc., at the year-end. Further, the taxpayer is also required to disclose the address of the immovable
property and description of movable assets.
If a taxpayer has acquired assets by way of gift, will or any other mode specified under section 49(1)
of the Income-tax Act, 1961, the asset shall be reported at the cost at which the previous owner has
acquired it as increased by the cost of improvement incurred by such previous owner or by the
taxpayer, as the case may be. If the cost of acquisition of the previous owner can’t be determined,
the value may be estimated at the circle rate or market value of assets, as the case may be.

Q13. How can I log in at https://incometaxindiaefiling.gov.in through Net Banking
facility?
E-filing portal of the Income-tax department has provided a facility to login without creating an
account on the portal. A taxpayer can use the Net Banking facility to log in at e-Filing Portal. This
option is provided at the bottom of the login page.
Filing of Returns
This facility shall be useful for the users who have forgotten their passwords and are unable to reset it.
Q14. Who are required to file return of income electronically?
For the Assessment Year 2020-21, every taxpayer has to file Income-tax return electronically except
a super senior citizen (whose age is 80 years or above during the previous year 2019-20) who
furnishes the return either in ITR-1 or ITR-4.
The various options for filing of a return have been enumerated below.

Q15. What are the modes for filing of return of income?
Return of income can be filed in paper mode or e-filing mode. If the return of income is filed through
electronic mode, then the assessee has the following three options:
(a) E-filing using a Digital Signature (DSC);
(b) E-filing without a Digital Signature; or
(c) E-filing under Electronic Verification Code (EVC).
If the return of income is filed using a DSC or under EVC, then there is no requirement of sending the
signed copy, ITR-V (i.e., acknowledgement of return filed electronically) to Bangalore CPC. However,
if the return is filed without using DSC or without EVC, the assessee shall send the signed copy of
ITR V on the following address within 120 days of uploading the return either by ordinary post or by
speed post only:
Income Tax Department - CPC, Post Bag No.-1, Electronic City Post Office, Bangalore -560100,
Karnataka
Q16. When is it mandatory to file the return of income for an individual or HUF?
Income exceeding the threshold limit
If the income of an individual or HUF (resident or non-resident), before claiming the following
deductions or exemptions, exceeds the maximum exemption limit then him/it must file the return of
income:
(a) Exemption under Section 10(38)6
;
(b) Deduction under Section 10A,10B,10BA;
(c) Exemption under section 54, 54B, 54D, 54EC, 54F, 54G, 54GA or 54GB7
; and
(d) Deduction under Section 80C to 80U.
Assets outside India
An Individual, being a resident and ordinary resident in India, shall file his return of Income, even if his
income does not exceed the maximum exemption limit, if he:
(a) Holds, as a beneficial owner or otherwise, any asset (including any financial interest in any
entity) located outside India;
(b) Has signing authority in any account located outside India; and
(c) Is a beneficiary of any asset (including any financial interest in any entity) located outside India.
Seventh Proviso to Section 139(1)
6. Exemption under Section 10(38) has been withdrawn with effect from Assessment Year 2019-20 vide Finance Act, 2018
7. Inserted by Section 39 of the Finance Act (No. 2), 2019, with effect from Assessment Year 2020-21.
Particulars E-Filing E-Filing E-Filing Paper
with DSC without DSC with EVC Filing
Individual whose age is 80 years or above ✓ ✓ ✓ ✓
Individual or HUF who is subject to ✓
tax audit under Section 44AB
Company ✓
Political Parties ✓
Any person filing return in ITR-5 ✓
(if tax audit is mandatory)
Any other assessee ✓ ✓ ✓ ✓

Filing of return of income is mandatory irrespective of the amount of gross total income if assessee’s
case is covered by the seventh proviso to Section 139(1). This provision requires every person, who
is otherwise not required to file the return due to the reason that his income does not the maximum
exemption limit, to file the return of income if during the previous year he has:
(a) deposited more than Rs. 1 crore in one or more current account maintained with a bank or a
co-operative bank;
(b) incurred more than Rs. 2 lakh for himself or any other person for travel to a foreign country; or
(c) incurred more than Rs. 1 lakh towards payment of electricity bill.
Q17. When is it mandatory for a non-resident to file a return of income?
If a non-resident person has income, which is taxable in India, the filing of Income-tax return shall
be done in accordance with provisions applicable in case of the corresponding resident assessee.
However, if a firm is deemed as a fiscally transparent entity in accordance with the provisions of
DTAA signed between India and a foreign country (in which such firm is a resident), the return shall
be filed in accordance with the status of the partner in that firm.
However, a non-resident assessee shall not be required to file the return of income in respect of
prescribed income taxable in India if taxes have been withheld by the payer from the payment of
such income.
Q18. How to furnish Taxpayer Identification Number (TIN) in residential status column
if same wasn’t allotted in the resident country?
W.e.f. the Assessment Year 2019-20, besides specifying the residential status, the assessee is required
to provide additional information about his residential status, that is, no. of days of stay in India, the
jurisdiction of his residence and tax identification number in case he is a non-resident.
Taxpayer Identification Number (TIN) is given in some countries as an identification number which
is used for tax compliances and to assess the taxpayer by the revenue tax authorities under those
countries.
The CBDT has clarified8
that where TIN has not been allotted to non-resident person by his resident
country, the non-resident can mention his passport number in place of TIN.
Q19. I am a housewife. During the year I have earned long term capital gain of Rs. 30
lakhs. I have invested this capital gains in a new house and claimed exemption
under Section 54. Now, my total taxable income is nil. Do I need to furnish ITR?
Yes, filing of Income-tax return is mandatory as total income before claiming capital gain exemption
under Sections 54, 54B, 54EC, 54F, 54G, 54GA and 54GB, exceeds the maximum amount not
chargeable to tax.
The Finance (No. 2) Act, 2019 has amended Section 139 w.e.f. the Assessment Year 2020-21 to make
the filing of return mandatory even in cases where total income of assessee exceeds the maximum
exemption limit before claiming capital gain exemption.
Q20. Is there any restriction on the number of returns that can be filed using the same
email-ID or same mobile number?
Only 10 returns can be filed using the same email-id or same mobile number. This is to ensure
that family members and related business concerns (not exceeding 10 separate users) not having
personal email or mobile number can be covered under a common email or mobile number, but
taxpayers should have their unique email ID and Mobile number registered with the Department.
8. Circular No. 18/2019, dated 8-8-2019

Q21. Whether a taxpayer having a property in joint name cannot file a return of income
in ITR-1 ITR-4?
In January 2020 the CBDT has notified9
the amendment to Rule 12 and new ITR Forms (ITR 1 and ITR
4) for the assessment year 2020-21. The amended Rule 12 provided that ITR-1 cannot be used by a
person falling under the two categories, namely, First, who owns a house property in joint-ownership
and second, who has entered into specified transactions mentioned in the seventh proviso to section
139(1), that is, payment of electricity bill in excess of Rs. 1 lakh, a deposit of more than Rs. 1 crore in
one or more current accounts, etc. However, a person falling under the second category is allowed
to furnish a return in ITR-4. Later, the CBDT had amended10
Rule 12 again to maintain the status quo
and allows an Individual/HUF, owning a property in joint-ownership or covered under the seventh
proviso, to file return in ITR-1 or ITR-4 if they fulfil other conditions.
Thus, a person owning a property in joint-ownership can file return in ITR-1 or ITR-4 if he fulfils other
conditions.
Q22. Is it necessary to furnish the passport number in ITR forms?
In the ITR Form 1 and 4 (for Assessment Year 2020-21) notified2 by the CBDT in January 2020, it was
made mandatory to furnish the passport number by the resident persons having an Indian passport.
A new disclosure was added to Part A-General Information where a taxpayer was required to disclose
whether he has a valid Indian passport. If yes, he will have to provide the passport number.
However, when the CBDT notified3 all the ITR forms applicable for Assessment Year 2020-21 which
replaced the two previously notified forms, there was no requirement to furnish the details of passport
number. Hence, it is not necessary to furnish the passport number in the ITR forms for Assessment
Year 2020-21.
Q23. I am a non-resident person. How can I register on the e-filing portal without an
Indian Mobile number?
An Indian mobile number and a valid email-id are mandatory to create an account on the e-filing
portal of the Income-tax Dept. E-filing portal requires a new user to verify his mobile number and
email-id by submitting the One-time Password (OPT) sent on such mobile number and email ID.
Therefore, you cannot register on the e-filing portal if you don’t have an Indian mobile number.
Q24. What are the due dates for filing of Income-tax returns for the previous year 2019-
20 (Assessment Year 2020-21)?
The due date for filing of original return of income has been extended to 30-11-2020 for all category
of taxpayers vide the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020
read with Notification No.35 /2020, dated 24-06-2020. The due date for filing of belated and revised
return shall be 31-03-2021.
Q25. I have filed my return where income has been computed as per the mercantile
method of accounting. Now, I want to file a revised return with income computed
as per the cash method of accounting. Can I do so?
After the filing of return, if assessee discovers any omission or wrong statement and he finds it
necessary to correct it, he can file a revised return. However, this option to file the revised return
is not available if the reason for the same is other than omission or wrong statement. ‘Change in
method of accounting’ cannot be treated as an omission or wrong statement. Thus, the method of
accounting cannot be changed by the filing of revised return.
9. Notification no. GSR 9(E), dated 3-1-2020
10. Notification No. GSR. 338(E), Dated 29-5-2020

Q26. I have filed ITR-1 disclosing only salary income. Subsequently, I have found that I
forgot to disclose the lottery income. Can I change the ITR Form from ITR-1 to ITR-
2 while filing the revised return?
Yes, you can file the revised return in a different form. Income-tax Act does not prohibit the filing of
revised return in a new form.
Q27. I identified an error in the processed return and filed a rectification request under
section 154. After a few days, I found another error but e-filing portal isn’t allowing
me to raise rectification request for the second time. What can I do?
You cannot submit a rectification request if your previous request hasn’t been processed by the
Income-tax Dept. You have to wait for the processing of previous rectification request before filing
a new request.
Q28. Is the verification of original return mandatory to file a revised return?
No, it is not mandatory to verify the original return first before the filing of revised return. There is no
need to verify original return in case revised return is filed and verified. CPC shall process only the
revised return and no action shall be taken against the original return.
Q29. I haven’t verified ITRs for previous years and same have been treated as invalid.
What should I do now?
After filing of Income-tax return, its verification by the authorized person is a mandatory step to
complete the process of return filing. If a return is not verified, it shall be treated as an invalid return.
The taxpayer is required to verify ITR within the time limit of 120 days from date of its uploading at
the e-filing portal.
The CBDT has provided11
one-time relaxation for verification of ITRs for AY 2015-16 to 2019-20. Hence
the taxpayers who have filed the ITR within the time allowed under section 139 of the Income-tax Act
and which have remained incomplete due to non-submission of ITR-V for verification, they can verify
such returns either by sending a duly signed physical copy of ITR-V to CPC, Bengaluru through speed
post or EVC/OTP modes by 30-9-2020. However, this relaxation is not available where the Income-
tax Dept. has already taken recourse to any other measure as specified in the Income-tax Act for
ensuring filing of a tax return by the taxpayer concerned after declaring the return as Non-est.
Q30. How to change the details of bank account furnished in return?
If you want to change any detail furnished in the ITR, you can do so by filing a revised return. As an
alternative way, the e-filing portal allows a taxpayer to change the following personal details in the
return without the filing of revised return:
(a) Address (c) email Id
(b) Mobile number (d) Bank account details
However, any change in personal details can be made before processing of return by CPC. To change
personal details, you have to raise a new request from the ‘Service Request’ page at the e-filing portal.
Q31. Is it mandatory to furnish ITR if a financial transaction entered into by a person is
reported in Statement of Financial Transaction (SFT)?
Filing of return of Income is governed by section 139 only. A person isn't required to file a return of
income if his case does not fall under any of the criteria mentioned in section 139. There is no such
requirement that furnishing of return is mandatory in case a person has entered into a financial
transaction that has been reported in SFT.
11. Circular no 13/2020, Dated 13-07-2020

Details Source
PAN, Name and Date of Birth PAN database
Address, Aadhaar Number, Mobile Number, and Email-ID E-filing Profile
Tax Payment, TDS and TCS details Form 26AS
Salary, allowances, deductions and relief under Section 89 Form 24Q
Type and income from house property Last year ITR and Form 26AS
Interest income from a term deposit Form 26AS
Bank Accounts Last year ITR and e-filing profile
Verification Logged in PAN
Q32. My return became invalid as I failed to respond to notice issued for a defective
return. Is there any option to correct that invalid return?
In case a return has been declared as invalid, it shall be deemed as if no return has been filed by the
taxpayer. In such a case, a new return can be furnished if the time limit for furnishing the original/
belated return has not yet expired. If the time limit for furnishing the return has expired, then you
cannot file the return for such assessment year. In that situation, the Assessing Officer can proceed
to make the best judgment assessment under Section 144. Alternatively, you may approach the
CBDT for condonation of delay in filing of return.
Q33. I am getting pre-filled information in respect of my income and deductions, etc.,
while filing Income-tax return in ITR-1. How tax department is pre-filling such
details and what is the source of that information?
To simplify the Income-tax return filing process and to cross-check the information filled therein by a
taxpayer with information reported under TDS return (i.e., Form 24Q or Form 26Q) or tax pass-book
(i.e., Form 26AS), the tax department has started the process of auto-populating certain information
in ITR forms.
Currently, the pre-filled information is available only in respect of those persons who are filing return
in ITR 1 or ITR 4. If a person chooses to file the said returns online through e-filing website then all
information shall be automatically pre-filled in the relevant ITR Form. However, if a person chooses to
file the return through Java utility of the department then he can download the pre-filled XML from
the e-filing website and import it in java utility.
The department is using the following sources of information for pre-filled ITR forms:

Q34. How to link Aadhaar number with PAN?
The PAN can be linked with Aadhaar from the e-filing portal, by sending an SMS or by filing a
physical form along with minimal fee with the designated PAN centre. Copies of PAN card, Aadhaar
card are to be furnished.
A taxpayer cannot link his Aadhaar number with PAN if his phone number is not updated in the
Aadhaar database. In this case, the taxpayer is required to visit the Aadhaar Facilitating Center to
update his phone number.
Q35. How can I link my Aadhaar number with PAN if there is a mismatch in my name or
date of birth appearing in Aadhaar card and PAN?
If there is any mismatch in the name or date of birth in the records of Aadhaar and PAN, the taxpayer
has to rectify either of the documents, PAN or Aadhaar card, to link the two records.
Q36. Whether my PAN will be treated as invalid if I do not link my Aadhaar number with
PAN?
As per proviso to Section 139AA(2), in case assessee fails to intimate the Aadhaar Number, the
PAN allotted to the person shall be made inoperative. Rule 114AAA of the Income-tax Rules further
provides that if PAN of a person becomes inoperative, it shall be deemed that such person has not
furnished, intimated or quoted PAN in accordance with the provisions of the Act. Thus, he shall be
liable for all the consequences for not furnishing, intimating or quoting PAN.
Q37. What is the last date to link Aadhaar number with PAN?
The Govt. has notified12
March 31, 2021 as the last date for linking of Aadhaar with PAN.
Q38. I cannot get my Aadhaar number by the end of the due date of filing of Income-tax
Return. How can I file ITR?
It is mandatory for every person, who is eligible to obtain Aadhaar number, to quote the Aadhaar
number in Income-tax return form. Where the person does not possess the Aadhaar number, the
Enrolment ID shall be quoted in the Income-tax return. Following assessees have been exempted
from the requirement of quoting Aadhaar number or Enrolment ID:
12. Notification S.O. 4708(E), Dated 30-12-2019
Aadhaar-PAN Linking

1. An Individual residing in States of Assam, Jammu and Kashmir and Meghalaya;
2. A non-resident individual (as per the Income-tax Act);
3. An Individual whose age is 80 years or above at any time during the previous year; and
4. An Individual who is not a citizen of India.
Thus, in case an assessee doesn’t possess Aadhaar card, he should apply for it and quote its enrolment
ID while furnishing his return of Income.
Q39. Is it mandatory to furnish Aadhaar number while filing ITR of an HUF?
Furnishing of Aadhaar number in ITR is mandatory only in case of individuals. Thus, a HUF is not
required to mention Aadhaar number at the time of filing of ITR.

Q40. What is the rate of deemed profits in case of presumptive taxation under Section
44AD?
As per the provisions of Section 44AD the rate of deemed profit would be at 8% of total turnover
or gross receipts during the previous year 2018-19. However, the rate of presumptive income would
be at 6% in the case of digital receipts. The benefit of reduced rate of 6% will be available only if
the proceeds of credit sales are received on or before the due date of filing of return under Section
139(1).
Q41. I have opted for the presumptive taxation scheme under section 44AD. Can I claim
deduction under Section 80GG for the rent paid for let out house property?
Section 44AD of the Income-tax Act, 1961 doesn’t restrict assessee from claiming deduction available
under chapter-VIA. Hence, you can claim a deduction for rent paid for your residence under section
80GG subject to the fulfilment of certain conditions prescribed under the said section.
Q42. I have opted for the presumptive taxation scheme under section 44AD. During
the year, I have made cash payment against business expenditure in excess of Rs.
10,000. Whether such expense shall be disallowed as per the provisions of section
40A(3)?
Section 44AD overrides provisions of section 28 to 43C. Thus, any deduction allowable under these
provisions shall be deemed to have been fully allowed to the assessee and further deduction or
disallowance under those sections shall not be permissible. Since Section 40A(3) falls in the category
of overriding sections, no disallowance can be made if any cash expenditure has been incurred by
the assessee in excess of Rs. 10,000.
Presumptive Taxation

#TaxmannCares
INTRODUCING
VIRTUAL BOOKS
Now Read Taxmann’s Most Trusted Books with Power of
Taxmann.com Search Engine
(AN E-BOOK INITIATIVE)
Gives you an alternative to read the book in HTML or E-book format
Search anything in the entire book in just one click
Automatically pickup from where you left
Create multiple bookmarks to access them from one window
Option to switch to Dark/Night Reading Mode
Virtual Books comes without any expiry
HOW TO BUY?
Step 2: Select a
title and click
‘Buy Now’
Step 3: Apply Promo Code
‘TAXMANNCARES’
to get 15% discount
Step 4: Complete the
buying process and get
instant access to the
virtual book
Step 1: Go to
virtualbooks.taxmann.com
OR
Purchase from your vendor and access the Virtual Book using the Unique Key provided.
KNOW MORE

Q43. I have earned profit from the sale of listed shares which were kept for more than 12
months. Whether it will be treated as capital gain or business profit?
Vide Circular No. 6/2016, dated 29-2-2016, the CBDT has instructed the Assessing Officers to
consider the following while deciding whether surplus generated from the sale of listed shares or
other securities is taxable as capital gains or business income:
1. Where the assessee himself, irrespective of the period of holding of listed shares and securities,
opts to treat them as stock-in-trade, the income arising from the transfer of such shares/
securities would be treated as its business income.
2. In respect of listed shares and securities held for more than 12 months immediately preceding
the date of its transfer, if the assessee desires to treat the income arising from the transfer
thereof as capital gains, the same shall not be put to dispute by the Assessing Officer.
However, this stand, once taken by the assessee in a particular Assessment Year, shall remain
applicable in subsequent Assessment Years also and the taxpayer shall not be allowed to
adopt a different/contrary stand in this regard in subsequent years.
The above principles have been formulated by the CBDT with the sole objective of reducing litigation
and maintaining consistency in approach on the issue of treatment of income derived from the
transfer of shares and securities. All the relevant provisions of the Act shall continue to apply on the
transactions involving the transfer of shares and securities.
The CBDT13
has decided that the income arising from the transfer of unlisted shares would be
considered under the head ‘Capital gains’, irrespective of the period of holding, to avoid disputes/
litigation and to maintain uniform approach.
Q44. I have earned a profit of Rs. 2 lakhs from the sale of long-term listed equity shares
in June 2019. Is this gain exempt from tax? Whether I have to report this gain in ITR
form?
The Finance Act, 2018 introduced a new Section 112A to withdraw Section 10(38) exemption for the
long-term capital gains arising from the transfer of listed securities, being equity shares, units of
equity-oriented funds or units of business trusts. As per section 112A, long-term capital gains arising
from the transfer of listed securities, being equity share, units of an equity-oriented fund or units of
a business trust shall be taxed at 10% in excess of Rs. 1 lakh. The new Section 112A is applicable from
Assessment Year 2019-20. Thus, you are required to report the long-term capital gain arising from
the sale of listed shares in ‘Schedule CG’ of Income-tax Form and pay tax at the rate of 10% on the
gain exceeding Rs. 1 lakh. Further, you will be required to provide the ISIN code and sale purchase
details of such shares under Schedule 112A.
13. Letter F.No.225/12/2016/ ITA.II, dated May 2, 2016
Capital Gains

Q45. I have earned a profit from intra-day trading. Is it taxable as business profit or
capital gain?
Intra-day trading is considered as speculation business and the income therefrom would either be
speculation gain or speculation loss. Income from speculation gain is taxed at the normal rates.
However, any losses arising from speculation business are to be set off only against the profit of any
other speculative business.
Q46. I have earned long-term capital gain of Rs. 10 lakhs which is taxable at 10% under
Section 112A. I have made an eligible investment of Rs. 1 lakh for Section 80C
deductions. How much tax do I need to pay on such income?
The benefit of the maximum exemption limit shall be available from long-term capital gains taxable
under Section 112A. However, the assessee cannot take the benefit of deduction available under
Chapter VI-A. The taxable income and tax liability thereon shall be calculated as under:
Q47. Mr. X has transferred equity shares of various companies after holding it for more
than 12 months. Does he need to enter the details of capital gains in respect of each
scrip in the ITR?
Instruction appended to ITR 2 and ITR 3 (for Assessment Year 2019-2014
) has provided that in case of
long-term capital gains (LTCG) arising from the sale of listed equity shares, or unit of equity oriented
fund or unit of business trust, on which STT is paid, separate computation of capital gains from each
scrip or unit should be disclosed in the Income-tax return. However, the e-filing portal on July 19,
2019 has uploaded a clarification in its ‘news and update’ column that the taxpayers have an option
to either provide the details of long-term capital gains scrip-wise or enter the aggregate value in
respective fields of Section 112A or 115AD(1)(iii) without entering the scrip wise details. Thus, it is
optional for him to enter the details of long-term capital gains scrip wise or in aggregate.
14. Instructions for filing of ITR for assessment year 2020-21 have not been issued yet.
Particulars Amount (Rs.)
Total Income 10,00,000
Less: maximum amount not chargeable to tax 2,50,000
Gross total income 7,50,000
Tax rate under Section 112A 10%
Tax payable (after cess) 78,000

Screenshot of the announcement made at e-filing website.
Q48. Whether detail of property and buyer information is required to be reported under
the Capital Gain Schedule if such property is situated outside India and sold to a
non-resident?
Schedule CG of ITR requires the assessee to furnish the details relating to the immovable property
transferred during the year. To track all the transactions related to the sale of immovable properties,
the schedule also seeks the information of the buyer, such as the name of the buyer, PAN/Aadhaar
No. of the buyer, address of the property, etc.
It is mandatory to furnish these details irrespective of fact that immovable property sold is situated in
India or outside India. However, the quoting of PAN of the buyer is mandatory only if tax is deducted
under section 194-IA or is mentioned in the documents related to the sale of the property.

Q49. Can I claim the benefit of tax deducted in advance on income which is taxable in
subsequent years?
Certain provisions of TDS (including TCS) require deduction of tax at source at the time of payment
or at the time of credit, whichever occurs earlier. Advance payments are also subjected to TDS.
Old ITR form did not have any mechanism to carry forward the excess TDS, thus, taxpayers were
required to show the entire TDS as a deduction and claim refund of excess TDS. To overcome the
issues, the Schedule of TDS/TCS in the ITR forms now provides columns to fill in the information of
tax deducted in previous years but credit for the same is claimed in the current year.
You cannot claim credit of TDS pertaining to income which is taxable in the subsequent year. Thus,
such TDS credit can be carried forward to the subsequent year and can be claimed in the year in
which income is offered to tax.
Q50. I have claimed tax refund by filing income-tax return but my refund claim failed as I
have mentioned the incorrect bank account number. How can I submit correct bank
account number to claim a tax refund?
You can submit your correct bank account number after selecting an option of refund reissue.
Procedure to apply for refund reissue is outlined hereunder:
1. Login to https://incometaxindiaefiling.gov.in
2. Go to 'My Account' and select ‘Service Request’.
3. Select Request Type as ‘New Request’ and then choose ‘Refund Reissue’
under request category.
4. Update bank account details.
5. Click on submit button.
Q51. How to proceed in case of TDS mismatch?
Where credit for TDS as claimed in the return matches with the balance appearing in the Form 26AS.
But, theAssessing Officer still raise a demand for payment of the differential amount of TDS due to
following reasons:-
1. TAN of deductor was wrongly mentioned
2. Name of deductor was not spelt out correctly
3. Tax deducted by one deductor was wrongly included in the amount of tax deducted
by another deductor
Tax payment, TDS, TCS
and refund

An assessee can file a rectification request in the following manner in case of such TDS mismatch:-
a) Login to your account in https://incometaxindiaefiling.gov.in
b) Go to e-File Rectification request
c) You need to fill up the following details:
 PAN
 Return to be rectified
 Assessment Year
 Latest Communication Reference Number issued under section 143(1)/154
(it starts with CPC/Assessment Year/)
d) Click on Validate button to go to the next step
e) On the next screen, choose 'Taxpayer is correcting data for Tax Credit Mismatch Only'
from the drop-down box of 'Rectification Request 'Type'
f) Check from the following relevant boxes for which item rectification is sought for:
 TDS on salary income details

 TDS on other than salary income details
g) Fill in all the relevant details, including details of tax deducted and reported in the return
of income filed earlier
h) Click on the button 'Submit' to submit the rectification request.
The TDS mismatch may also be due to error in TDS return filed by deductor. In such a situation you
should intimate the deductor about such an error and tell him to rectify the TDS return.
In Press Note No. 402/92/2006, dated April 17, 2014 the CBDT had noted that many taxpayers
commit mistakes while furnishing details of tax credit in the return of income. Such mistakes include:
1. Invalid/incorrect TAN of deductor
2. Furnishing same TAN for more than one deductor
3. Filing information in wrong TDS Schedules in the Return Form
4. Furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax, etc.
Consequently, the tax credit could not be allowed to the taxpayers while processing returns despite
the tax credit being available in Form 26AS statement. The CBDT, therefore, has directed the
taxpayers to verify if the demand raised on them is due to tax credit mismatch on account of such
incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for
correction of these demands. The rectification requests have to be submitted to the jurisdictional
Assessing Officer in case the return was processed by such officer, or the taxpayer is informed by
CPC, Bengaluru that such rectification is to be carried out by Jurisdictional Assessing Officer. In
all other cases of processing by CPC, Bangalore, an online rectification request can be made (as
defined above).
Q52. I have a Fixed Deposit of Rs. 150,000 in bank and my total income (including
interest income that would accrue on FD) is below the taxable limit. How to avoid
deduction of tax on interest income?
You can file a self-declaration to the bank in Form 15H if you are a senior citizen. Otherwise, you can
file self-declaration in Form 15G.

Q53. How to avoid deduction of tax, if I earn interest income of more than Rs. 40,000
from saving deposits and my total income including such interest income would be
below the taxable limit?
The tax shall be deducted from the amount of interest payable on time deposits if it exceeds Rs.
40,000. Any interest payable in respect of saving deposits shall not attract any TDS.
Q54. My Return has been processed and it shows 'Outstanding Tax Demand'. What
should I do now?
A facility has been made available to taxpayers on the E-filing website (i.e., www.incometaxindiaefiling.
gov.in) to provide online responses to such demands. The actions required to be performed by the
taxpayer are as under:
1. Login to https://incometaxindiaefiling.gov.in then go to e-file menu and click on
'Response to Outstanding Tax Demand.
2. Select one option out of the following:
a) Demand is correct
b) Demand is partially correct
c) Disagree with demand
3. If the option of Demand is correct is selected then a pop up is displayed as ‘If you confirm
that demand is correct, then you cannot subsequently disagree with the demand’. If any
refund is due to assessee then outstanding demand along with interest will be adjusted against
the refund. If no refund is due to assessee then the taxpayer has to immediately pay the
demand.
4. If an option of Demand is partially correct is selected then the taxpayer is required to enter
the Amount which is correct and Amount which is incorrect. After selecting the amount
which is incorrect taxpayer should mandatorily fill up reasons from the specified list.
5. If an option of Disagree with demand is selected then the taxpayer is required to furnish the
details of disagreement with demand along with the reasons from the specified list.
6. After the taxpayer submits the response the success screen would be displayed along with the
Transaction ID.
Q55. Income-tax department has raised a demand against Mr. A for the Assessment Year
2018-19. Mr. A didn’t pay the tax demand. He filed ITR for next assessment year
in which refund was claimed. Whether refund claimed by Mr. A can be adjusted
against his pending tax demand?
The CBDT has framed centralized scheme wherein all e-filed returns are processed by the central
processing centre (CPC), Bangalore. CBDT has empowered the CPC to adjust tax demand against
the tax refunds due to assessee. Thus, refund claimed by Mr. A can be adjusted with the demand
standing against him for the Assessment year 2018-19.
Q56. Whether I need to pay fee under Section 234F if there is a delay in filing of income-
tax return for AY 2020-21?
The Finance Act, 2017 has introduced a new section 234F to levy fees if the assessee does not
furnish the return of income on the due dates prescribed under Section 139(1). The amount of such
late filing fees shall be as follows:
1. Rs. 5,000 if the return is furnished after the due date but before December 31 of the
Assessment Year [Rs. 1,000 if total income is up to Rs. 5 lakhs].
2. Rs. 10,000, in any other case.
After introducing this new provision, the assessees shall be required to pay the late filing fees under
section 234F along with interest under section 234A, 234B and 234C before the filing of return of

income. The Income-tax Dept. shall not be required to initiate the penalty proceedings separately to
levy such fees on late filers. The details of fees levied under Section 234F shall be reported in Part B
TTI.
Q57. The due date for filing of ITR for Assessment Year 2020-21 has been extended to
November 30, 2020. Whether interest applicable under section 234A has also been
waived off?
The CBDT has extended the due date for filing of Income-tax Return for the Assessment Year 2020-
21 to 30-11-2020. However, no relief has been provided from the interest chargeable under section
234A if the tax liability of the assessee exceeds Rs. 1 lakh. Thus, if self-assessment tax liability of a
taxpayer exceeds Rs. 1 lakh, he would be liable to pay interest under section 234A from the expiry of
original due dates, i.e., 31-07-2020 or 31-10-2020. The interest under section 234A shall not be levied
if the self-assessment tax liability of taxpayer does not exceed Rs. 1 lakh and ITR if filed within the
extended due date, that is, 30-11-2020.
Q58. I am a non-resident filing Income-tax return in India. I don’t maintain any bank
account in India. Can I get my tax refund in any foreign bank account?
Up to Assessment Year 2018-19, a taxpayer was required to mention the details of his saving/current
account in ITR forms to get Income-tax refund. Thus, a non-resident, who didn’t maintain any bank
account in India, was required to open a bank account in India to get the refund. Considering the
hardships faced by the non-resident taxpayers, the Income-tax dept. has allowed giving tax refund
in the foreign bank account of non-resident taxpayers from Assessment Year 2019-20. Non-residents
are required to mention:
1. SWIFT Code of Foreign Bank Account,
2. Name of Bank, and
3. International Bank Account Number (IBAN)
Q59. I have received communication from Dept. that tax refund couldn’t be granted due
to some error in bank account details. The e-filing portal asks for furnishing of
EVC or DSC for raising refund re-issue request. Is there any alternative for getting
refund re-issue without providing EVC or DSC?
A request for re-issue of refund can be raised only if the taxpayer can generate EVC or verify the
re-issue request via DSC. There is no alternative available if he is not able to generate EVC or isn’t
having DSC.

Q60. What is Section 87A rebate and who can claim it?
An individual who is a resident of India and whose total income does not exceed Rs. 5,00,000 is
entitled to claim rebate under section 87A. Rebate under section 87A is available in the form of a
deduction from the tax liability. Rebate will be lower of 100% of income-tax liability or Rs. 12,500. In
other words, if the tax liability exceeds Rs. 12,500, rebate will be available to the extent of Rs. 12,500
only and no rebate will be available if total income (i.e., taxable income) exceeds Rs. 500,000.
Q61. I am a Govt. employee and have received arrears of salary as per recommendations
of 7th pay commission. Whether I need to file any form to claim relief under Section
89 in my Income-tax return?
If you want to claim relief under 89, it is mandatory to file Form 10E online on the e-filing website.
Taxpayers who claim relief under Section 89 without filing Form 10E, will get a notice from Income-
tax Dept. stating that “The relief under Section 89 has not been allowed in your case, as the online
form 10E has not been filed”. Thus, you are required to file Form 10E online before filing your Income-
tax return.
Q62. My employer has deducted tax without allowing relief of Section 89. Can I claim the
relief while filing the return of income?
If the employer fails to provide relief under section 89 and deducts excess tax, then you can claim
such relief in your return of income and claim refund of excess tax deducted. However, it is mandatory
to file Form 10E online on the e-filing website.
Q63. How to file Form 10E?
Form 10E can be filed online. Login to https://incometaxindiaefiling.gov.in with your User ID and
password. After you log in, click on tab e-File Income Tax Forms. On the landing page select the
following options:
Form Name: Form No. 10E – Form for relief u/s 89
Assessment Year: 2020-21
Submission Mode: Prepare and Submit Online
Deductions Rebate

Q64. I failed to submit rent receipt and proof of tax-saving investment to my employer
due to which HRA exemption and certain other deductions were not given to me.
How can I claim a refund of such excess tax paid, as the tax deducted from my
salary income is higher than my actual tax liability?
Even if exemption of House Rent Allowance under section 10(13A) and deductions under Chapter
VI-A are not considered by the employer in Form 16, yet they can be claimed in the Income-tax
return. Accordingly, the excess tax deducted by the employer can be claimed as refund.
Q65. I am a salaried class person living in a rented premises. The HRA component in my
CTC is less than the actual rent paid. Can I claim section 80GG deduction in respect
of such excess rent?
Section 80GG specifically denies the benefit of deduction to the assessee having any income falling
under section 10(13A), i.e., House Rent Allowance (HRA). Since your salary structure contains HRA
component, you are not eligible for claiming deduction under section 80GG.
Q66. How to claim the deduction of donation given to an organization registered under
section 80G?
If you have given donation to an organization registered under section 80G you can claim deduction
by filing the return of income wherein you are required to provide following details:
1. Name of donee;
2. PAN of donee;
3. Address of donee; and
4. Amount of donation.
Q67. Whether it is mandatory to furnish PAN of the landlord to employer for claiming
exemption of HRA?
If annual rent paid by the employee exceeds Rs. 100,000 per annum, it is mandatory for the employee
to report PAN of the landlord to the employer. In case, the landlord does not have a PAN, a declaration
to this effect from the landlord along with the name and address of the landlord should be filed by
the employee.

Q68. I have earned a salary income of Rs. 800,000 during the Assessment Year 2020-
21 and am also having loss of Rs. 300,000 from house property. Can I set-off loss
from house property against my salary income?
Section 71 allows set-off of losses from house property against any other income. However, w.e.f.
Assessment Year 2018-19, losses under the head ‘house property’ shall be allowed to be set-off
only to the extent of Rs. 200,000 in any assessment year. Thus, only a loss of Rs. 200,000 can be
adjusted against your salary income and loss of Rs. 100,000 shall be carried forward for set-off in
subsequent years.
Q69. I have long term capital loss of Rs. 70,000 from the sale of listed equity shares.
Whether the same can be allowed to be set off or carried forward?
Up to Assessment Year 2018-19, any long-term capital gain arising from the transfer of listed equity
shares was fully exempt from tax under section 10(38). Since the gain was exempt from tax, any loss
arising from such transfer had no treatment under the Income-tax Act. However, the Finance Act,
2018 withdrew this exemption by inserting a new Section 112A with effect from Assessment Year
2019-20. Tax is levied under this provision at the concessional rate of 10% on long-term capital gains
arising from the transfer of said securities if the long-term capital gain exceeds Rs. 1 lakh.
The new section 112A provides for taxability of long-term capital gains above Rs. 1 lakh. As gain up to
Rs. 1 lakh is not chargeable to tax, it couldn’t be called as exempt income. Therefore, any long-term
capital loss arising from the sale of listed equity shares is allowable to be set off and carried forward.
Set-off of Losses

MOBILE APP
LATEST UPDATES | RESEARCH
Get real-time updates
See summary of all stories
Choose what you want to read
according to area of practice
Access your taxmann.com
subscription through mobile

Q70. The income of Mrs A is clubbed in the hands of Mr A. Whether Mrs A is liable for
filing of ITR?
As the income of Mrs A is clubbed with the income of Mr A, same wouldn’t be included again in
the income of Mrs A. Thus, if Mrs A doesn’t have income exceeding maximum exemption limit not
chargeable to tax, she is not liable to file ITR.
Q71. My daughter is 15 years old and has earned income amounting to Rs. 10,00,000 by
participating in skill-based competition. Is she required to file ITR for the concerned
year?
Any income that accrues or is paid to minor is added to the income of parents. However, if a minor
child earns any income by application of his skill, talent or specialized knowledge and experience,
it is excluded from clubbing provision. The minor child is assessable on such income through his
guardian. You need to apply for PAN of your daughter in Form 49A on her behalf. After obtaining
PAN, you need to get yourself registered on the e-filing portal as her representative assessee and
file ITR for the concerned Assessment Year. The PAN application for a minor child shall be filed and
signed by a representative assessee on her behalf. In such cases, besides details of the minor, details
of such representative assessee shall also be furnished under PAN application Form.
Q72. My father died on August 1, 2018. I received some income in his name during the
Financial Year 2019-20. My father failed to write his will before dying and the
partition has not yet been taken place with respect to his property. In whose hands,
such income will be taxed?
In case the person has died intestate (without leaving behind a Will), the estate left by him devolves
immediately on his legal heirs according to the personal law whereby the deceased was governed. In
such a case, whatever income accrued or received by the deceased person from the date of death
till the last day of the financial year shall be considered as income of legal heir and shall be disclosed
in his personal Income-tax return.
Income taxable in the hands
of other person

Q73. Mr X died on 23rd August 2019. He had received a salary income of Rs. 12 lakhs
before dying for the period April 1, 2019 to 22nd August, 2019. After his death,
some interest income has accrued in his name amounting to Rs. 10,000. Is ITR
required to be filed for the relevant year?
Yes, filing of return is must in this case. The obligation to file ITR would be as follows:
a) Income accruing before the death of Mr X
ITR is required to be filed in the name of the deceased (Mr. X) under his PAN by his legal representative.
Thus, ITR for the salary income of Rs. 12 lakhs has to be filed by the legal representative of Mr X.
b) Income accruing after his death
Had Mr X prepared the will before his death, the executor would have been required to file ITR
before distribution and thereafter legal representatives are required to file the return in their personal
capacity.
As Mr X had not prepared his will before his death, his legal heirs are required to file ITR in their
personal capacity. Thus, Rs. 10,000 shall be added to the income of legal representative or legal
heirs, as the case may be.
Q74. Can a legal heir file the return of the deceased assessee if DSC is mandatory?
Yes, a legal heir can file the return of the deceased assessee even if DSC is mandatory. For filing such
return, the legal heir has to obtain a DSC in his capacity. The DSC of the legal heir is required to be
registered on e-filing website by sending the following details of legal heir and deceased through
e-mail to efiling.administrator@incometaxindia.gov.in along with the documentary evidence (death
certificate of the deceased assessee):
(a) PAN
(b) Legal heir name
(c) Date of Birth
(d) Father's Name
(e) Mobile Number
After receiving these details by the e-filing administrator, the Legal heir's PAN will be linked to the
deceased assessee and a confirmation email will be sent to the email id of the Legal heir. Thereafter,
Legal heir can file the return of the deceased assessee electronically.

59/32, New Rohtak Road,
New Delhi – 110005 (India)
Tel : +91-11-45562222
www.taxmann.com

Taxmann's FAQ's on ITR Forms

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Taxmann's FAQ's on ITR Forms

Similar to Taxmann's FAQ's on ITR Forms (20)

More from Taxmann

More from Taxmann (20)

Recently uploaded

Recently uploaded (20)

Taxmann's FAQ's on ITR Forms