Contours to income tax return forms - Article by V. K. Subramani in Business Advisor dated June 25, 2014

1. Volume VII Part 6 June 25, 2014 17 Business Advisor
Contours to income tax return forms
V. K. Subramani
A taxpayer in order to communicate his income
chargeable to tax under the Income-tax Act, 1961, has to
file a return of income - a formatted presentation of facts
and figures. From the assessment year 2007-08, the
Government has been notifying the return form for every
year and for every type of taxpayer. A serious practitioner
may even miss out the changes due to frequent
amendments made in the Income-tax Rules, 1962, being
the delegated legislation with the CBDT who prescribe or
notify the changes from time to time.
This write up discusses the various return forms and their applicability to
various taxpayers.
Forms Applicability
ITR-1 Known as Sahaj is applicable for persons having income under
the head (i) ‗salaries‘, income in the nature of family pension
(section 57(iia));
(ii) taxpayers having income from house property but not having
more than one house and not having any brought forward loss
under the head; and
(iii) assessees having income under the head ‗income from other
sources‘, except winning from lottery or income from race horses
and who do not have any loss under the head.
However, ITR 1 is not applicable in the case of resident other
than not ordinarily resident (i) who has assets (including
financial interest in any entity) located outside India or signing
authority in any account located outside India; (ii) who has
claimed relief of tax under section 90 or 90A or deduction under
section 91; or (iii) who has income not chargeable to tax
exceeding Rs 5000 (example those who have agricultural income
exceeding Rs 5000).
ITR-2 In the case of individuals and HUFs whose total income does not
include any income chargeable to tax under the head ‗profits and

2. Volume VII Part 6 June 25, 2014 18 Business Advisor
gains of business or profession‘ could file the return of income in
this form.
ITR-3 It is applicable to individuals or HUFs being partner in a firm
having income chargeable under the head ‗profits and gains of
business or profession‘ and does not include any income except
the income by way of interest, salary, bonus, commission or
remuneration received from such firm.
ITR-
4S
It is applicable to individual or HUF deriving business income
which is computed in accordance with presumptive provisions
referred to in section 44AD and section 44AA of the Act for
computation of business income.
However, ITR 4S is not applicable in the case of a resident other
than not ordinarily resident (i) who has assets (including
financial interest in any entity) located outside India or signing
authority in any account located outside India; (ii) who has
claimed relief of tax under section 90 or 90A or deduction under
section 91; or (iii) has income not chargeable to tax exceeding Rs
5000 (example those who have agricultural income exceeding Rs
5000).
ITR-4 In the case of individual and HUF not covered in the preceding
categories who are deriving income from business or profession
could file the return in Form No.4.
ITR-5 In the case of a person not being an individual or HUF or
company or non-profit entity is to file return in this form. In
other words it is applicable for partnership firms, association of
persons and body of individuals.
ITR-6 This form is applicable for companies other than those
companies which could use form ITR-7.

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ITR-7 It is applicable for persons including companies whether or not
registered under section 25 of the Companies Act, required to file
return under section 139(4A), 4(B), 4(C) and 4(D). It is applicable
to charitable and religious trusts which are assessed in the
status of AOP Trust. Also for companies whether or not
registered under section 25 of the Companies Act, 1956.
Annexure-less returns
All the returns specified above are annexure-less returns. In other words,
the return is not to be accompanied by a statement showing computation of
tax payable or proof of tax paid, claim of TDS or TCS or payment of advance
tax or self-assessment tax or the report of audit under the various
provisions of the Act.
E-filing of audit report and tax returns
The following assessees have to furnish the audit report electronically:
Section Subject
10(23C)(iv) Any fund or institution established for charitable purposes
approved by prescribed authority having regard to the
objects of the fund or institution and its importance
throughout India or throughout any State or States. Audit
report is to be furnished in Form No.10BB.
10(23C)(v) Any trust or institution wholly for religious purposes or
wholly for public religious and charitable purposes
approved by the prescribed authority having regard to the
manner in which the affairs of the trust or institution are
administered and supervised for ensuring that the income
accruing thereto is properly applied for the objects thereof.
Audit report is to be furnished in Form No.10BB.
10(23C)(vi) Any university or other educational institution existing
solely for educational purposes and not for purposes of
profit and other than those mentioned in section

4. Volume VII Part 6 June 25, 2014 20 Business Advisor
10(23C)(iiiab) (funded by Government) or section
10(23C)(iiiad) (having aggregate annual receipt below Rs
100 lakh) and which is approved by the prescribed
authority. Audit report is to be furnished in Form
No.10BB.
10(23C)(via) Any hospital or other institution for the reception and
treatment of persons suffering from illness or mental
defectiveness or for the reception and treatment of persons
during convalescence or of persons requiring medical
attention or rehabilitation, existing solely for philanthropic
purposes and not for purposes for profit other than those
mentioned in section 10(23C)(iiiac) i.e. institutions wholly
or substantially financed by the Government and section
10(23C)(iiiae) i.e. hospital or institution having aggregate
annual receipt below Rs 100 lakh. Audit report is to be
furnished in Form No.10BB.
10AA Newly established units in Special Economic Zone (SEZ)
enjoying tax holiday - Form No.56F or section 10CCB as
the case may be.
11(2)(a) Charitable or religious trust accumulating or setting apart
income for application in subsequent years - Form No.10
for giving notice of accumulation of income.
12A(1)(b) Charitable trust or institution registered under section
12AA - Form No.10B to be filed.
44AB Persons having income from business or profession and
the aggregate annual turnover/ gross receipts exceeding
the prescribed limit - Form No.3CA or 3CB along with
Form No.3CD.

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44DA Non-residents having income by way of royalty - Report of
audit is to be furnished in Form No.3CE.
50B Slump sale of undertaking and computing capital gain
thereon - Audit report to be furnished in Form No.3CEA.
80-IA,80-IB
& 80-IC
Persons having undertaking eligible for deduction under
section 80-IA(4), eligible business under section 80-IB and
section 80-IC - Audit report in Form No.10CCB.
80-ID Profits and gains from business of hotels and convention
centres in specified areas - Audit report in Form
No.10CCBBA.
80-JJAA In respect of employment of new workmen. Audit report in
Form No.10DA.
80-LA In respect of income of offshore banking units and
international financial services centre - Audit report in
Form No.10CCF.
92 E In respect of international transactions or specified
domestic transactions - Audit report in Form No.3CEB.
115 JB In respect of book profit tax for companies - Audit report of
accountant in Form No.29B.
115 VW Indian companies opting for tonnage tax scheme - Audit
report in Form No.66.

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All the above audit reports/ reports have to be filed electronically. This is
mandatory.
Mode of filing return of income
 Except a company or a person required to furnish the return in Form
No. ITR 7, if the total income exceeds Rs 5 lakh, the return of income
has to be furnished electronically with or without a digital signature.
Therefore, persons with income below Rs 5 lakh could file return of
income in paper form if other conditions are not attracted.
 In the case of individual or HUF being a resident (other than not-
ordinarily resident) having assets (including financial interest in any
entity) located outside India are required to furnish ITR-2, ITR-3 or
ITR-4 as the case may be, have to furnish the return electronically
with or without digital signature.
 A firm required to furnish in Form No. ITR 5 or an individual or HUF
who is required to furnish the return in Form No. ITR 4 and to whom
the provisions of section 44AB are applicable has to furnish return
of income in electronic mode with digital signature.
 Persons claiming relief under section 90 or section 90A or deduction
under section 91 (not being a company or an individual or HUF or
firm governed by section 44AB) have to furnish the return
electronically with or without digital signature.

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 Partnership firms and AOPs who are required to file return in ITR-5 to
whom provisions of section44AB are not applicable have to file the
return electronically with or without digital signature.
 A company required to furnish return in ITR-6 has to furnish the
return mandatorily with digital signature.
 Assessees who are required to furnish return in ITR-7 under section
139(4B)[applicable for political parties] have to file the return
electronically with digital signature and in the case of others, it has to
be filed electronically with or without digital signature.
 Where any report of audit is furnished electronically, the return of
income must be filed electronically either with or without digital
signature.
 Where the return is filed with digital signature the ITR-V generated
upon filing the return is not to be sent to CPC, Bengaluru. Where it is
filed without digital signature the ITR-V must be sent to CPC,
Bengaluru within 120 days of uploading the return electronically.
Conclusion
Filing of return with or without digital signature is optional for small and
marginal tax payers. It should be noted that where an audit report is filed
under the law, the return filing is by electronic mode on mandatory basis.
In fact, charitable trusts and institutions have been mandated to file return
of income on electronic mode vide (Seventh Amendment) Income-tax Rules,
2013 dated 11.06.2013 w.e.f. 01.04.2013.
This has not been adequately publicised and many such institutions have
filed paper returns for the assessment year 2013-14.
A benevolent circular to entitle them to file electronic return or for
regularising the paper return which is already available on record may
reduce litigation in the days to come.
(V. K. Subramani is Chartered Accountant, Erode)
Filing of return with or without digital signature is optional
for small and marginal tax payers. It should be noted that
where an audit report is filed under the law, the return filing
is by electronic mode on mandatory basis.