FOR THE KIND ATTENTION OF THE MEMBERS
Re: E-filing of Income-tax Return Forms
The Fiscal Laws Committee has recently submitted to the CBDT the
selected issues on e-filing of income-tax return forms. Further issues
would also be forwarded shortly. The CBDT has been requested to issue
appropriate clarification. The list of such issues is to be published
hereunder for the kind information of the members.
G. Ramaswamy
Chairman
Fiscal Laws Committee
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
E-filing of Income-tax return forms - Issues
1. A person is proprietor of two different proprietary concerns having different
business each having turnover more than 40 lacs and audited u/s 44AB by
different chartered accountants which data he has to fill in form no.ITR 4,
as the space provided for the profit & loss account and balance sheet is
for only one proprietary concern. It is suggested that the separate sheet
to be allowed to be inserted in the same format for the each proprietary
concern.
2. If a person wants to file the personal balance sheet where can he do so.
3. A person is having the income from futures and options with no separate
profit & loss account or balance sheet what details he has to fill up in
balance sheet and profit & loss account that is part
A-BS, part A-P & L.
4. What is to be filled in part A – QD that is the quantitative details if the
persons is under tax audit and not having quantitative details of the goods
as he is in a business which is comprising of thousands of small
commodities where none of the commodity is having a turnover of more
than 10% of the total turnover e.g. Grocery shop, Hardware & Paint
dealer, Stationery Shop, other retailers.
5. The assessee who is under presumptive taxation scheme i.e. “no
accounts case”, what he should write for sundry debtors, sundry creditors,
stock in trade, cash balance, gross profit as he may not have all these
details since he is not maintaining books of accounts.
6. In part A - P & L the purchases
are to be shown net of tax & duties the
traders generally do not have the details of tax & duties separately as they
entered only one amount in the purchase so if it is not possible to
segregate the details of the different taxes paid on the purchase, the same
can be included in the purchases as allowed in part A as allowed as per
the instructions filing out the forms in Item no. 15 part A-OI and part A-QD.
7. If a persons is receiving as a partner interest, remuneration from a firm
and is also proprietor of a concern can he show the share of interest and
remuneration received from firm in ITR 4 in schedule BP (computation of
income for Business or Profession) in item no. 23 as any other income not
included in profit and loss account or in
item no. 22 any other item or items
of addition under section 28 to 44DA.
8. If a person is leaving India for good (i.e. permanently) during the
accounting year 07-08 and his assessment is to be made for the income
of the period from 01.04.2007 to the date of his departure from India u/s
174 (i.e. for the A.Y. 08-09), which return he has to filed as form no. ITR 1
to ITR 8 have been prescribed only for assessment year 07-08.
9. How the income from house property is to be shown if the property is
partly self occupied and partly rented.
10. Income from self occupied property has loss after deduction of interest on
borrowing in which column should if be mentioned.
11. Many professionals have only one savings account and all
professional
income is also deposited in the same account. For him there may not be
any balance sheet of his business. What should he fill up in the Balance
Sheet part?
12. The profit and loss account contained in the forms require the assessee to
furnish complete details of different types of duties paid or payable in
respect of goods and services purchased. In majority of cases this may
not be practically possible.
13. In case the assessee desires to convey something by the way of separate
note which may be essential, no separate space has been provided for
that.
14. A situation where the property could be “deemed to be let out” has not
been considered.
15. The structure of the
profit and loss account is such that it suits
manufacturing or trading business only. It does not suit the service
providers like hotel, transport agents, professionals etc. It is likely that the
assessees in the service industry will have to recast or reframe its profit
and loss account. Please clarify as to how service sector requirements
could be factored in.
16. In case of refunds, the information desired is MICR, bank a/c number and
type. The assessee is not required to mention the name of the bank.
However, this may be necessary to ensure that the refund is not credited
to a wrong account due to quoting of incorrect MICR code.
17. MS- Excel format should also be provided for the convenience of the
assessees.
18. Which Form of returns would be applicable in case an assessee wants to
file return for earlier years? In such a situation can he file the return in
physical form?
19 Are the details required under Annual Information Report mandatorily to
be filled in by all assessee? What is the relevance of the same?
20 Which return form has to be used by a person who has only exempt share
income from a firm?
21. Can the stand-alone form on Fringe Benefits be used by companies and
firms as well?
22. If an individual has loss from house property, can he use ITR-1?
23. If AOP/BOI do not have taxable income, can they use ITR-8 instead of
ITR-5? What about a firm? Can they also use ITR-8 instead of ITR-5?
24. What is purpose and implication of ITR-V?
25. What form of return should be filled by a salaried class person having
housing loan also?
26. As the returns now are annexure less, it is difficult to comprehend as to
how the Assessing Officer is going to verify the veracity of various claims
made in respect of investments not reflected in Form 16.
27. Many schedules and notes to accounts form part of the financial
statements of any entity. The return forms do not provide for this
information. This deprives the Assessing Officer of the basic tool to
understand the financial statements. Many items contained in the notes to
accounts may have revenue implications. It would be difficult for the
department to pick up
important cases for scrutiny on random basis and
call for details.
28. In case filing is done online with digital signatures, no stamped
acknowledgement would be available. This would create problems for the
assessee for obtaining visa, loan etc. Is there any system to verify online
whether IT returns of a particular year has been filed?
29. As per Guidance Note on Accounting for State-level Value Added Tax
issued by the Institute of Chartered Accountants of India, assessee are
advised to disclose purchases and sales are Net of VAT. Accordingly the
books of account are maintained and (finalized) the annual accounts as
per entries and manner prescribed in the Guidance Note on VAT. As per
entries recommended in the Guidance
Note, the VAT paid on purchases
has been adjusted against VAT collected on sales and no entries relating
to VAT on purchase and sales are reflected in the profit and loss account
of the entity. Now, in the new ITR returns forms the assessees are
required to disclose the VAT received or receivable on goods sold, VAT
paid or payable on goods purchased and VAT paid or payable to
Government separately.(Refer Clause No.2c, 8f & 34c in ITR 4). When the
books of account are maintained in conformity with VAT Guidance Note, it
is difficult to capture the above information on the basis of trial balance
given by the assessee. What is the remedy available to us?
30. As per Section 50 the Income-tax Act, there is no need to disclose sale of
fixed assets made during the year
out of purchases for a period of 180days or more, or purchases for a period less than 180 days. The details
asked in the Schedule DPM are against the provisions of Section 50?.
Please clarify the same.
31. Is there any time limit for submitting Form ITR-V (ITR Verification Form),
when the return is filed electronically without digital signature, to the
Income-tax Department?
32. No enclosures are required while filing the income tax refunds. Four years
back when single page challan was introduced for payment of taxes, it
was stated that the same need not be enclosed to the return of income
and only the particulars of payment like date, challan
number, BSR code
of the Bank have to be stated. However till today the returns in cities like
Hyderabad and offices in moffussil areas /district headquarters are not
accepting returns where the challans are not enclosed. What is the
remedy?
33. The auditors’ report in the cases falling under Sec 44 AB need not be
enclosed as per the new procedure. Only the name of the auditor, PAN
and the membership number is to be quoted. There may be a chance
where this may be misused by any person without the knowledge of the
auditor himself whose name is quoted in the return form.
It is suggested that the digital signatures may be made mandatory for both
auditors and assesses in case of e-filing and compulsory enclosure of
physical audit reports in case of non–e-filing cases.
34. The minimum/exact configuration of computer required for e-filing may
please be publicized / stated.
35. No column is provided for agricultural Income in the acknowledgement
form. This may be included.
36. The Income-tax Act requires the following to be attached with return:
(a) proof for interest for housing loan
(b) certified copy of the deed in the case of new firm or in the year of
change in constitution
(c) form 30 in the case of refund But the return is annexureless; how
one can comply with the requirement under the Act?
37. Salary of partners and interest of partners is appropriation of profit and in
the return form there is no
column for the salary and interest to partners,
and such salary and interest is allowable as an expenses in income tax.
Where should they be shown?
38. How to enter the quantitative particulars of the products traded or
manufactured where there are multiple products of trade and the products
and their measure of unit cannot be related with each other. For example
- an assessee is carrying on business in petroleum products, trades in
cement products, trades in pulses, manufactures tobacco products all in
his own name, then how to provide quantitative details in the returns
format.
39. Now that the return of Income and FBT are clubbed in ITR a single challan
may serve the purpose with separate columns.
40. Area code, AO code, AO type, Range code & AO number under the
designation of the Assessing officer in ITR 4 & 5 are not available and not
known to the taxpayers. These may be publicized.
41. Acknowledgement of the ITR does not contain the particulars of the
Assessing Officer with whom it is filed. The same is important as seal to
be affixed does not contain full particulars and it is usually the Range
office.
42. Individuals/HUF who are self employed doing brokerage, commission, CA
practice, doctors, architects, beauty parlour, etc. and does not maintain
their accounts related to the business but maintains personal accounts in
the form of profit & loss and balance sheet. Please let me know:
i.
Which ITR form to be used.
ii. If ITR 4 is to be used whether the personal accounts to be treated as
accounts of proprietory business and accordingly to be loaded in the
form.
iii. If so, then where to reflect personal investments/assets like house,
shop, jewellery shown in the balance sheet of the assessee, because
the ITR form in the PART A- BS part under application of funds S. No.
2 as investment only contains details regarding Govt. and non Govt.
securities quoted and unquoted under long term investments and
equity shares, preference shares and debentures under trade
investments. There is no other column. Since these are not business
assets these cannot be included under fixed assets.
43. In case
of ITR-4 PART A BS under application of funds S. No. 3(b)
captioned as loans and advances there is no column to show loans given
to business associates or others. Please advice. Such loans are neither
Advances recoverable in cash or in kind or for value to recd nor deposits
and balance with tax authorities. Clarifications are therefore needed.
44. In case of salaries how to incorporate details of more than one employer.
45. In case of no business assessees how to incorporate the details of their
personal investments in form of jewellery, Immovable properties,
movables, loans given or taken. If these items are not incorporated in the
return form then serious problems will arise to prove whether these were
part of disclosed assets or undisclosed
assets in case of an individual or
HUF.
46. As per para 5 (iv), the bar - coded return may be furnished at the option of
the assessee. What is bar - coded return and the manner of its
filling/furnishing.
47. Within what period the verification of the return in form ITR-V is required to
be submitted. Whether above form is required to be submitted to the
jurisdictional assessing officer necessarily or it may be submitted to any
income tax office in India in view of on line net working. The date of
transmitting the data electronically or dispatch of ITR – V (by Fax/
Courier/post) or receipt of above form by income tax office shall be
considered for the purpose of considering the date of filling the return.
What are the consequence of non filing /late filing / non receipt of form ITR
– V by Income Tax Dept.
48. Whether return in paper form is necessarily to be submitted to the
jurisdictional assessing officer or it may be submitted to any income tax
office in India.
49. Whether all types of pension viz. under Superannuation scheme, Family
pension Fund, Employees pension Scheme, pension from LIC under
Jeevan Suraksha etc is to be shown under the head “Salary” or all/any of
the above is to be shown under the head “Income from other sources”.
50. What is the manner in which the note(s) required to be submitted along
with the return is to be furnished since no document is to be attached to
the return. In absence of the
said note(s), different view may be taken by
the tax department while assessing the income.
51. Whether new ITR-2 can be used at the option of the assessee for filling
return for A.Y. 2006-07 and earlier year (s) or should old form be
necessarily used for such return.
52. This query relates to ITR 5. A partnership firm engaged in retail trade
declares net profit @ 5% of gross turnover. As such it is not required to
maintain books of accounts. It pays salary and interest to its partner in
accordance with law. Consequently its net profit as well as taxable income
is reduced to nil. How can the above be filled up in ITR 5 so as to reflect
that the profit declared complies with the provisions of section 44AF and
also the
computational provisions of the I.T. Act?
53. In ITR-4, there is no separate requirement for mentioning the trade name
of the proprietary firm; disclosure of trade name is essential as most of the
proprietors carry their businesses in the proprietorships firm name only.
54. In ITR– 4 the requirement relating to statutory reserves in case of
individual or HUFs carrying on proprietorship business or profession does
not appear to be in place.
55. ITR - 4 requires the assessee to mention the amounts debited to profit and
loss account to the extent disallowable under section 40A(2)(b). Under this
section the amount is disallowed only if the payment made is excessive in
the opinion of the Assessing Officer. Now the question arises as to how
can the assessee step into the shoes of the Assessing Officer and fill this
information.
56. ITR-1 is return for individual having income from salary/pension/ family
pension and interest. Can an individual having only salary income and no
interest income use this form or has he to go for ITR-2?
57. ITR-2, 3 and 4 require detailed breakup of salary income like exempt
allowances; perquisites etc, whereas ITR –1 requires only a single figure
for salary. Is there any specific reason for such differential treatment?
58. In ITR-6 for companies the requirement of resident and not ordinarily
resident needs deletion.
59. There are no columns in the ITR forms 4 & 5 to offer the following if the
assessee wants to offer
:
(a) credits in the name of third parties-actually genuine but cannot
adduce proof.
(b) credits in capital a/c of proprietor/partners to the extent
unexplainable
(c) salary /interest from firms,if credited in capital without crediting in
profit and loss account. (It is better this is separately required in
computation of income, as salary allowed in the hands of firm, if
less than the amount paid may require adjustment in the hands of
partner).
60. E-form does not save “date of birth” of the assessee due to which it cannot
be uploaded at the e-filing portal.
61. E-form cannot be saved in PDF format.
62. Unlike the e-form 1 (for companies) for the A.Y. 2006-07, there is no
option to load the e-forms from XML file.
63. An assessee who is running four different businesses trading in jwellery,
trading in food grains, running of a hotel, and manufacturing of
components, all in proprietorship having different trade names for each
business and each business is carried out in different cities. Accounts of
each business is audited I by different auditors.
(a) How the names of all auditors can be filled up in the return?
(b) Whether sale and receipts and expenses of all different business
should be clubbed and shown in profit and loss account at one
place?
64. In part A profit and loss account item No.45 is provided for provision for
deferred tax which is applicable only to companies,
hence was not
required in form No.ITR-4 which is applicable only to individual and HUF.
65. The ITR 3 Software is not picking up the figures from CYLA Schedule nor
it is allowing manual feed.
66. The ITR 3 return preparation software has a bug as it is not taking the
figures of losses of current year to be set-off.
67. I have selected bank account type saving but when I uploading it says as
below:
Error: Please correct the following errors and upload the XML again
[FATAL_ERROR]: Invalid text ‘1’ in element” ‘Bank Account Type’.
68. In Part B TTI schedule
Item No.5 education cess on 3 + 4 is showing total of 3+4
Item No.6 gross tax liability 3+4+5
is showing 0 – ITR – 4.
Since Gross tax liability is 0, refund is the same amount which is paid in TI
– ITR 4.
69. DPM plant and machinery
Item No.16 showing negative of WDV shown in item no.1 above as well as
in DCG under item A also in negative while there should not be any figure
because I have not shown any consideration – ITR – 4.
70. DOA
Dep is not calculating automatically while it is in DPM – ITR 4.
71. OS
Item No.5
1g+2+3+4c = double of OS income because 3 = 1g+2 - ITR – 4
72. TI
While entering figure in name of branch and BSR code it shows a error
massage “Invalid Date”. – ITR – 4.
73. Validation
Date of birth in Sheet Part A General is blank while there is a date
available.
74. An assessee having income from a partnership firm by way of interest on
capital and remuneration and also running a proprietary concern. Which
ITR form is applicable? If ITR 4 is used, in which column the income from
partnership concern needs to be shown.
75. In case of a firm, it is reconstituted one – Whether the certified true copy of
the reconstituted partnership deed is to be enclosed with the return. If no
need to enclose, in what basis
the interest on capital and working partner
remuneration will be allowed.
76. In case of refund, Bank Account Number is asked, but not the name of the
bank and place of the bank
77. In cases covered under section 5A of the Income-tax Act, 1961, how to
present figures of balance sheet in the income-tax return? Whether the
consolidated balance sheet of the BOI should be shown or the balance
sheet of the individual spouses? Individual balance sheet may be difficult
since till now it was maintained jointly.
78. In ITR 4, ITR 5and ITR 6 there is place only for one auditor’s details. What
if there are joint auditors.
79. In ITR 5 in format of profit and loss A/c there is no separate row for
disclosing
remuneration or interest paid to partners.
80. In the schedule of depreciation there is no row for the undertaking
engaged in generating electricity to claim depreciation.
81. In ITR 4 , ITR 5 and ITR 6 there is no place to mention other Investments ,
other liabilities in item no 2 and 3(d) in part A-BS other than specified in
the return . It is suggested that others row be inserted or clarify where this
other investments or liabilities be mentioned.
82. In ITR 4 ,ITR 5 and ITR 6 Part A –P&L Service Tax and Vat/Sales tax are
mention at two places one in item 8 (e) ,(f) and other is item 34 (b),(c)
what is the purpose.
83. In ITR 4 Part A-OI item 8 A (f) Amount of interest etc to partner is
irrelevant as the said return
is not for the firms and therefore no question
of partner.
84. In ITR 5 Instructions for filling of forms item 16(c) (ii) it states that residual
items be filled in item 21 and 26 of schedule. It should be item 22 and item
23 of the schedule.
85. In ITR 5 Instructions for filling of forms item 16(c) (iii) it states that in case
accounts not maintained profit as per item 50d . It should be item 52d.
86. In ITR 5 Instructions for filling of forms item 16(h) (iv) it states row vii it
should be row vi.
87. In ITR 5 Instructions for filling of forms item 16(h) (v) it states row viii it
should be row vii
88. Issue relating to Annual Information Return to be given along with the new
Income `Tax Return.
A. Relating to cash deposit in Bank what to be reported
(a) If 8 Lacs deposited in bank A and Rs.8 lac deposited in bank
B
(b) If 8 lacs deposited in bank A branch X and if 8 lacs
deposited in bank A branch Y
(c) If 8 lacs deposited in bank A branch X account 1 and if 8
lacs deposited in bank A branch X account 2
(d) Mr. A,B,C have a joint account and each of them deposit Rs.
4 lacs in the bank account thus aggregating to more than 10
lacs whether to be reported if yes who should report and
what amount.
(e) The reporting has to be qua saving account or qua bank or
all the aggregate cash deposits.
B. Payments for Credit Cards what to be reported
(a) Payment for original card 1 lac 80 thousand, payment for
add on card 40 thousand.
(b) Credit card in the name of employee who uses the credit
card for the business of the company. All the payment made
by the company and debited in the company books payment
is more than 2 lacs. Here bills are in the name of employee
payment made by company who should report and what
amount.
(c) If there are more than one credit card issued by one
company whether the payment to individual credit card is to
be considered or aggregate payment for all the credit card is
to be considered.
(d) If there are more than one credit card issued by different
companies whether the payment to
individual credit card if to
be considered or aggregate payment for all the credit card is
to be considered.
(e) The reporting is to be done by the person who make the
payment or the person on whose name the bills are raised.
(f) The reporting is qua credit card or qua company issuing the
credit card.
C. Payments to Mutual Fund
(a) If fifty thousand rupees is invested in five different scheme of
the same mutual fund whether the reporting has to be made.
(b) If fifty thousand rupees is invested in five different mutual
fund whether the reporting has to be made.
(c) Mr. A,B,C have a jointly applied for the mutual fund and each
of them have contributed Rs. 1 lac each in the scheme
of
mutual fund thus aggregating to more than 2 lacs whether to
be reported if yes who should report and what amount.
(d) The reporting is to be done qua scheme or qua mutual fund
D. In relation to Bond or Debentures
(a) The bonds purchased from the secondary market
(b) Bonds received in gift.
(c) Where application for the bond is more than 5 lacs but the
allotment is less than 5 lacs.
(d) Where application for the bond is more than 5 lacs but there
is no allotment and whole money is refunded.
(e) Mr. A,B,C have a jointly applied for the bonds and each of
them have contributed Rs. 2 lac each in the bond thus
aggregating to more than 5 lacs whether to be reported if
yes who should report and what amount.
E. In relation to Shares
(a) The shares purchased from the secondary market
(b) Shares received in gift.
(c) Where application for the shares is more than 2 lacs but the
allotment is less than 2 lacs.
(d) Where application for the shares is more than 2 lacs but
there is no allotment and whole money is refunded.
(e) Where the shares are issued at premium and the value paid
for the face value is less than 2 lacs but including premium it
is more than 2 lacs.
(f) Whether the reporting is qua the face value of the shares or
qua payment made or qua total value including face value
and premium.
(g) Mr. A,B,C have a
jointly applied for the shares and each of
them have contributed Rs. 1 lac each in the shares thus
aggregating to 3 iacs i.e more than 2 lacs whether to be
reported if yes who should report and what amount.
F. In relation to Purchase of Immovable Property
(a) Flat purchase jointly in the name of Mr. A and Mrs. A both
contributing 20 lacs each total Rs. 40 lacs whether to be
reported if yes who should report and what amount.
(b) The agreement value of the flat Rs. 28 lacs and the value
taken by the registration authorities for the purpose of
payment of stamp duty is 32 lacs whether to be reported if
yes what amount.
(c) The right in Immovable property which is held jointly by five
persons and each right is purchased by a separate
agreement for Rs. 10 lacs each and thus entering five
different agreement all registered separately whether to be
reported if yes what amount.
(d) Property purchased on 28 March, 2007 and registered in
April 2007 whether to be reported as the assessee would
report in accounting year 2006-07 and registering authority is
reporting in year 2007-08.
(e) A Flat is purchase for 50 lacs from a builder in a building
under construction and a token amount paid in the year is Rs
10,000 balance is to be paid over a period of next 3 years
whether it is to be reported if yes in which year and what
amount.
(f) A part right is
purchased in a flat where the total value the
flat is 40 lacs but the part right purchase by a separate
agreement is Rs. 10 lacs whether to report if yes what
amount.
(g) Flat received in gift.
G. In relation to Sale of Immovable Property
(a) Flat sold which was jointly in the name of Mr. A and Mrs. A
both receiving 20 lacs each total Rs. 40 lacs whether to be
reported if yes who should report and what amount.
(b) The agreement value of the flat Rs. 28 lacs and the value
taken by the registration authorities for the purpose of
payment of stamp duty is 32 lacs whether to be reported if
yes what amount.
(c) The right in Immovable property which is held jointly by five
persons and each right is sold by a separate agreement for
Rs. 10 lacs each and thus entering five different agreement
all registered separately whether to be reported if yes what
amount.
(d) Property sold on 28 March, 2007 and registered in April
2007 whether to be reported as the assessee would report in
accounting year 2006-07 and registering authority is
reporting in year 2007-08.
(e) A property is sold for 50 lacs and a token amount received in
the year is Rs 10 thousand balance is to be received over a
period of next 3 years on full filing certain condition.
Whether it is to be reported if yes in which year and what
amount.
(f) A part right is sold in a flat
where the total value the flat is 40
lacs but the part right sold by a separate agreement is Rs.
10 lacs whether to report if yes what amount.
(g) Flat given in gift.
H. Investment in RBI Bonds
(a) If six applications are made during the year of Rs. 1 lacs
each whether it has to be report.
(b) Where Rs. 3 lacs are invested in bond A and Rs. 3 in bond B
both bond issued by RBI whether to be reported if yes what
amount.
(c) RBI Bond are sold by different banks from 3 banks I have
purchased the bonds of 2 lacs rupees aggregating to 6 lacs
rupess whether to be reported if yes what amount.
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