Mandatory furnishing of return of income by certain persons

Currently, a person other than a company or a firm is required to furnish the return of income only if his total income exceeds the maximum amount not chargeable to tax, subject to certain exceptions. Therefore, a person entering into certain high value transactions is not necessarily required to furnish his return of income.  In order to ensure that persons who enter into certain high value transactions do furnish their return of income, it is proposed to amend section 139 of the Act so as to provide that a person shall be mandatorily required to file his return of income, if during the previous year, he-

(i) has deposited an amount  or aggregate of the amounts exceeding one crore rupees in one or more current account maintained with a banking company or a co-operative bank;  or

(ii) has incurred expenditure of an amount or aggregate of the amounts exceeding two lakh rupees for himself or any other person for travel to a foreign country; or

(iii) has incurred expenditure of an amount or aggregate of the amounts exceeding one lakh rupees towards consumption

of electricity; or

(iv) fulfils such other prescribed conditions, as may be prescribed.

Further, currently, a person claiming rollover benefit of exemption from capital gains tax on investment in specified assets like house, bonds etc., is not required to furnish a return of income, if after claim of such rollover benefits, his total income is not more than the maximum amount not chargeable to tax . In order to make furnishing of return compulsory for such persons, it is proposed to amend the sixth proviso to section 139 of the Act to provide that a person who is claiming such rollover benefits on investment in a house or a bond or other assets, under sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA and 54GB of the Act, shall necessarily be required to furnish a return, if before claim of the rollover benefits, his total income is more than the maximum amount not chargeable to tax.

These amendments will take effect from 1st April, 2020 and will, accordingly apply in relation to assessment year 2020-2021 and subsequent assessment years.

[Clause 39]

 

 

 

Mandatory return filing for high-value transactions expands to include transaction and rollover-based filing triggers. Amendments mandate filing of income tax returns by individuals who, during the previous year, undertake specified high-value transactions-including large current account deposits, significant foreign travel expenditure, or substantial electricity consumption-or meet other prescribed conditions; and require persons claiming capital gains rollover exemptions on reinvestment in specified assets to file returns when their pre-rollover total income exceeded the basic exemption limit, even if post-claim income is below that limit.