Certain High value transactions required the filing of income tax return compulsory

 

Here in this blog, we will be discussing about latest amendment in Seventh Proviso to Section 139(1) of Income Tax Act.

In following certain scenarios, it is now mandatory to file income tax return even if your taxable income is below basic exemption limit (threshold limit) as per latest amendments in Income Tax Act.

Before we go further, first we will understand what is Basic exemption limit in income tax. Basic exemption limit is the maximum amount not chargeble to tax. Some time, it is also called as threshold limit.

Even though the person is otherwise not required to file a return of income because his total income is below the basic exemption limit. However, if he is undertaking certain high-value transactions, he required to file income tax return compulsory.

Currently, Company and Firm are compulsory required to file income tax return every year.

A person other than a company or a firm is required to furnish the return of income only if their total income exceeds basic exemption limit. 

Therefore, before F.Y. 2019-20, if person's total income is below basic exemption limit, he is not necessarily required to furnish his return of income even though he entered into certain high-value transactions.  

In order to ensure that persons who enter into certain high-value transactions do furnish their return of income, section 139 of the Income Tax Act, 1961 is amended so as to provide that a person shall be mandatorily required to file his return of income, if, during the previous year, such a person undertakes certain high-value transactions.

Those certain high-value transactions are as follows:

If a person -

1. deposited more than Rs. 1 crore in a current account in a year

• Deposit has included all kind of transaction either in cash or cheque or online fund transfer. 
• Saving account outside the purview of this provision. 
• The aggregate deposits in all the current accounts maintained in all of the banks including for determining the threshold of Rs. 1 crore.

2. who have expended more than Rs. 2 lakh on foreign travel  

• Expenditure exceeding more than 2 lakh incurred by a person for a foreign travel for himself or for any other person.

3. expended more than Rs. 1 lakh on electricity consumption in a year   conditions, 

• The expenditure on the consumption of electricity is only covered under this provision.

If any one of the condition is fulfilled, person is required to file income tax return compulsory.

It is proposed to make return filing compulsory for persons, who have enter into high value transactions.

Note:

It is also proposed to provide that a person whose income becomes lower than basic exemption limit due to claim of rollover benefit of capital gains shall also be required to furnish the return. 

Disclaimer: 

The above article is meant for informational purpose only and does not purport to be advice or opinion, legal or otherwise, whatsoever. While due care has been taken during the compilation of this article to ensure that the information is accurate to the best of our knowledge and belief, the contents of such article do not substitute for professional advice that may be required. The individual expressly disclaims all and any liability to any person who has read this document or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this article.