Income Tax Return Filing

by Varun Mirkhelkar

Senior Associate, Direct Tax

As you all know, income tax return (ITR) Filing season has started for ITRs’ to be filed for AY 2023-2024, i.e., FY 2022-2023.

Let us go through some important aspects of ITR through the following Questions:

Which form should a taxpayer use to file his income-tax return for the AY 2023–2024?

Nature of income	ITR 1*	ITR 2	ITR 3	ITR 4*
Salary Income
Income from salary or pension (for an ordinarily resident person)	✓	✓	✓	✓
Income from salary or pension (for not ordinarily resident and non-resident persons)		✓	✓
Any individual who is a Director in any company		✓	✓
If payment of tax in respect of ESOPs allotted by an eligible start-up has been deferred		✓	✓
Income from House Property
Income or loss from one house property (excluding brought forward losses and losses to be carried forward)	✓	✓	✓	✓
An individual has brought forward a loss or losses to be carried forward under the heading House Property.		✓	✓
Income or loss from more than one house property		✓	✓
Income from Business or Profession
Income from business or profession			✓
Income from a presumptive business or profession covered under sections 44AD, 44ADA, and 44AE (for a person resident in India)				✓
Income from a presumptive business or profession covered under Sections 44AD, 44ADA, and 44AE (for not ordinarily resident and non-resident persons)			✓
Interest, salary, bonus, commission, or share of profit received by a partner from a partnership firm			✓
Capital Gains
Taxpayer has held unlisted equity shares at any time during the previous year.		✓	✓
Capital gains or losses on the sale of investments or property		✓	✓
Income from Other Sources
Family Pension (for an ordinarily resident person)	✓	✓	✓	✓
Family Pension (for not ordinarily resident and non-resident persons)		✓	✓
Income from other sources (other than income chargeable to tax at special rates, including winnings from the lottery and race horses or losses under this head)	✓	✓	✓	✓
Income from other sources (including income chargeable to tax at special rates, including winnings from the lottery and race horses or losses under this head)		✓	✓
Total Income
Agricultural income exceeding Rs. 5,000		✓	✓
Total income exceeding Rs. 50 lakhs		✓	✓
The assessee has any brought forward losses or losses to be carried forward under any head of income.		✓	✓

* An ITR-1 can be filed by an individual 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 an LLP) resident in India.

Which ITR Form is to be used to report income from Crypto?
If you have income from transferring cryptocurrencies (Virtual Digital Assets), you should report such income in ‘Schedule VDA’ in ITR-2 or ITR-3. It is important to note that you cannot use ITR-1 or ITR-4 to report this income.

What is the time limit for sending a signed copy of ITR-V to CPC or verifying the return furnished online?
The time limit for e-verification or submission of the ITR-V is 30 days from the date of filing the return of income electronically. Earlier, the time limit was 120 days, which has been reduced to 30 days.

What are the consequences if a taxpayer fails to verify a return within 30 days?
If a person fails to verify a return of income within 30 days from the date of submission on the e-filing portal, the return will be considered invalid. The same consequences that apply to taxpayers upon non-filing a return will apply to those who do not verify the return within 30 days.

When is it mandatory for a non-resident to file a return of income?
If a non-resident person has income that is taxable in India, the filing of an income tax return shall be done in accordance with the provisions applicable in the case of the corresponding resident assessee.
Can a standard deduction of Rs. 50,000 be claimed against the salary from both employers?
If the employee has earned during the year a salary from two different employers, A Standard Deduction of Rs. 50,000 is an absolute and unconditional deduction allowed to an employee, and it does not require any supporting evidence or investment. This deduction can be claimed only once per year, regardless of the number of job changes during that period. Therefore, one cannot claim the deduction of Rs. 50,000 twice for the salary received from both employers.

Profit from intra-day trading is taxable as business profit or capital gain.
Intra-day trading is considered a speculative business, and the resultant gain or loss would be a speculative gain or loss. Speculative gain is taxed at normal rates, and speculative losses can only be set off against speculative profit.

Is a change in the ITR form permitted while filing the revised ITR?
Yes, the revised return can be in a different form. The Income Tax Act does not prohibit the filing of a revised return in a new form.

When is it mandatory to file the return of income for an individual?

Income exceeds the basic exemption limit.
If an individual has an asset located outside India,

The filing of a return of income is mandatory, irrespective of gross total income, in the following cases:

(a)	He has deposited more than Rs. 1 crore in one or more current accounts maintained with a bank or a cooperative bank;
(b)	He has incurred more than Rs. 2 lakh for himself or any other person for travel to a foreign country; or
(c)	He has incurred more than Rs. 1 lakh towards the payment of his electricity bill.
(d)	If total sales, turnover, or gross receipts of the business exceed Rs. 60 lakh during the previous year,
(e)	If total gross receipts in the profession exceed Rs. 10 lakh during the previous year,
(f)	If the total tax deducted and collected during the previous year was Rs. 25,000 or more. The threshold limit shall be Rs. 50,000 in the case of a resident individual of the age of 60 years or more; or
(g)	If the aggregate deposit in one or more savings bank accounts of the person was Rs. 50 lakh or more during the previous year.

Income Tax Return Filing

by Varun Mirkhelkar

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