Who all are required to file return of income under newly inserted 7th Proviso to Section 139(1) of IT Act, 1961.
7th Proviso to section 139 has been inserted with effect from 01/04/2020 to provide for furnishing of income tax return by a person who is otherwise not required to furnish a income tax return under section 139(1) of IT Act, 1961, if such person during the previous year:-
Conditions of ITR as per 7th Proviso of Section 139(1)
Under any of the exceptional cases as given below, an assessee who is specified in clause (b) of Section 139(1), should mandatorily submit his/her income tax return to the IT Department. These assesses are otherwise excluded from filing their income tax return in specified deadline:
1. Deposit of INR 1 crore or more in Current Account:
- The proviso applies only deposit balance Current Account(s),
- the deposit one or more current account, will be considered for a previous year.
- It will not apply the deposit savings account balance of an assessee.
- Aggregate of all deposit the Current Account balances available in the financial institutes (including co-operative banks) in assessee’s name is taken together to compare with the applicable threshold figure.
- All types of transfer mode are covered, that it, cash/cheque/online mode.
2. Expenditure of more than INR 2 lakh for travel to foreign country:
- Here, assessee’s expenses for travelling to foreign country includes expenses (in any possible denomination of currency) for self/any other person spent in a FY.
- The trip can be for business/leisure.
- The condition applies only if expenditure for Travelto a foreign country exceeds INR 200000.
- The proviso applies non-residents also,
3. Expenditure of more than INR 1 lakh on Electricity Bill:
- Here, assessee’s electrical connection can be of any type, commercial or domestic. Also, if there are multiple electrical connection in assessee’s name, aggregate of all the charges will be taken altogether to compare with the applicable threshold figure. The said expenses ignores the charges of getting electrical connection and deposit money for getting such connection.
- Other Prescribed Conditions:
Here, CBDT is empowered to include other conditions/high-transactions under 7th proviso of 139(1) as required.
Who is Eligible to File ITR as per 7th Proviso of Section 139(1)?
- Individuals or member of HUFs or Association of Persons (AOP) or Body of Individuals (BOI) as mentioned in clause (b) of 139(1). These assessees include those whose income is less than the tax exempted threshold amount but made high-value transactions as mentioned above.
- Company or Firm are excluded from this condition
Relevant documents should be available with the assessee to furnish details of their income and expenses as per 7th Proviso of Section 139(1) while filing ITR-1. ITR-1 to ITR-5 forms of AY 2020-21 contain new fields in Part A of General Information on 7th proviso of Section 139(1).
Note: CBDT notified on ITR forms in a much early date on January 3, 2020 where assessees to file ITR under 7th proviso of Section 139(1) are disallowed from filing ITR-1, but later lifted the restriction a week later on January 9, 2020. So, such assessees (coming under 7th proviso of Section 139(1)) are to file ITR-1 compulsorily to declare their income and expenses.
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