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It is a period of rushing for everyone to file his or her Income Tax Return (ITR) for AY 2023-2024 (FY 2022-2023) and get the compliance done within the due date. For non-audit cases, the due date for filing an ITR is July 31, 2023.
In this edition of Taxation Times, we will answer the most common questions asked regarding the filing of an ITR.
If you are eligible to file an ITR, ensure that it is filed by the due date.
In this month’s Taxation Times, we cover:
We hope that you find this month’s edition of the Taxation Times useful. In case you have any feedback or need us to include any information to make this issue more informative, please feel free to write to us at info@uja.in.
Happy Reading!
Best Regards,
UJA Tax Team
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:
| 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.
| (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. |
Facts: The assessee company for the relevant year filed its return of income belatedly, by 36 days. Thereafter, the assessee company filed an application seeking condonation of delay before the Principal Chief Commissioner of Income Tax (PCCIT), but the PCCIT rejected the application seeking condonation filed by the assessee company.
Against the rejection of the application by the Ld. PCCIT, the assessee company filed a writ in the Hon. High Court.
Held: Central Board of Direct Taxes: Instructions to Subordinate Authorities (Condonation of Delay): Assessment Year 2020-21 The assessee filed a loss return on 23-3-2021 after a 36-day delay and sought condonation of the delay. The Principal Chief Commissioner rejected the application for condonation of delay. Whether, since the Chartered Accountant of the assessee had filed an affidavit before the Principal Chief Commissioner stating that there was a marriage of her elder sister on February 16, 2021, and she was discharging her family obligations and had taken responsibility, mentioning that there was failure on her part to file return before the due date, the case fell within the sweep of the phrase ‘genuine hardship’ used in Section 119(2)(b) and, thus, delay in filing return deserved to be condoned.
In Favour of: The Assessee.
Facts: The assessee is a private limited company incorporated in Singapore and is a part of Inter Continental Hotels (IHG). It is a tax resident of Singapore as per the provisions of Article 4 of the India-Singapore Double Taxation Avoidance Agreement (‘DTAA’ or ‘tax treaty’).
The primary business of the assessee is to franchise or licence hotels operating under different hotel brands of IHG in the Asia-Pacific region. The assessee, being the regional headquarters for the Asia Pacific region of the IHG Group, is the economic and beneficial owner of various hotel brands, including ‘InterContinental’, ‘Holiday Inn, and ‘Crowne Plaza’. The assessee was in receipt of royalty fees from various hotels within the Asia-Pacific region, including India, from the licencing of the various hotel brands.
The assessee received for the relevant year management fees from one of its group companies situated in India, and the same was not treated as Fees for Technical Services (FTS) by the assessee when it filed its return of income. During the assessment proceedings, the Ld. Assessing Officer (Ld. AO), treating the management fees as FTS, added the same to the income.
Aggrieved by the order passed by the Ld. AO, the assessee filed an appeal before CIT (A), which upheld the order of the Ld. AO.
The assessee filed an appeal before the Hon. ITAT against the appellate order passed by the Ld. CIT (A).
Held: Assessee, a Singapore-based company, entered into a management support service agreement with its Indian group company (IHG India), for providing operational, accounting, training, and recruitment services, etc. and received a certain amount of consideration. Assessing Officer added Management Services Cost (MSC) to income of assessee, treating same as FTS. Commissioner (Appeals) upheld additions of MSC as FTS under article 12(4)(a) of DTAA, treating receipts against MSC as ancillary and subsidiary to Licence Fee received from Indian Hotels, as against addition made by Assessing Officer under article 12(4)(b) of DTAA. – It was discovered that the co-ordinate bench had categorically held that the services provided by assessee did not make available any technical knowledge, skill, or know-how to the recipient, and thus the amount received by assessee could not be regarded as FTS under Article 12(4)(b). – Furthermore, in assessment years 2013-14 and 2014-15, the co-ordinate bench had also held that the amount received by assessee could not be regarded as FTS under Article 12(4)(b).
In Favour of: The Assessee
