So, Basically this Notes is CBCS Pattern but very helpful for FYUGP NEP B.Com 3rd Sem examination because syllabus is same as previous syllabus so read this E-Filling Complete notes top to bottom.
E-FILLING OF RETURNS
UNIT 1
CONCEPTUAL FRAMEWORK
Related :
E-FILLING OF RETURNS QUESTION ANSWERS
Q. Explain the concept of e-filing of Return.
Ans: In this technology driven age, every sector in the Indian economy is partly or completely
affected by Internet. Income tax department of India is not an exception to it and is committed provide world class service to taxpayers in the Country, making tax compliance easy and convenient for them. One of the initiatives of the Income tax department was the beginning of electronic filing of income tax returns. E-file is an electronic filing system that allows individuals and businesses to file their income tax return over internet. According to directorate of Income Tax-The procedure of electronically filing income tax returns through the internet is known as filing. The developing world of electronic filing has certainly evolved during the past few years. E-filing is typically available to taxpayers 24/7.Unlike mailing paper returns, e-filing allows tax agencies to immediately issue a refund, and inform taxpayers that the forms were properly completed and that taxes have been received. When taxpayers file tax returns online, they are immediately notified about errors or missing data.
Income Tax Department of India launched the Electronic tax filing system in September 2004, initially on a voluntary usage basis for all categories of income tax assesses. But from July 2006 it was mandatory for all corporate firms to e-file their Income Tax returns. Filing of Income Tax return is a legal obligation of every person whose total Income for the previous year has exceeded the maximum amounts that is not chargeable for the Income Tax under the provisions of the Income Tax Act, 1961. Income Tax department has introduced a convenient way to file these returns online using internet. It is mandatory for the companies and firms requiring statutory audit under section 44AB to submit the income tax returns electronically. The general aim of e-filing is to replace cumbersome manual, bureaucratic service systems with collaborative, efficient, process-driven and secure online delivery.
Q.What are the main objectives of e-filing of ITR?
Ans: The following are the main objectives of e-filing of ITR :
1.To make it possible for the taxpayer, tax deductor, tax professional other agencies directly or through authorized intermediaries to submit their return and other form and/"or avail other service electronically in an accurate, comprehensive and expeditious manner from anywhere at any time in a simple and easy to use manner.
2. To provide a technologically sophisticated and anauthenticated solution to meet the taxpayers' expectations of confidentiality and security.
3. To automate end to end process for return preparation, payments, assessment and refund crediting.
4. To reduce taxpayers' compliance burden by providing an improved, efficient and high quality internet based solution.
Q. Discuss some situation where it is mandatory to file ITR online.
Ans:
A. In case of an Individual/HUF
a) where books of accounts are required to be audited under section 44AB shall furnish the return of income electronically under digital signature.
b)where (a) is not applicable and
i. The return is furnished in ITR-3 or in ITR-4; or
ii. A resident assesse having any assets (including financial interest in any entity) located outside India or signing authority in any account located outside India shall furnish the return of income electronically with or without digital signature or by using electronic verification code.
iii.Taxpayers claiming relief under section 90,90A, or 91 shall furnish the return of income electronically with or without digital signature or by using electronic verification code.
IV. A taxpayer who is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C) (vii), 10A, 10AA, 12A(1)(b), 44AB,44DA, 50B, 80-1A, 80-IB,80-IC, 80-ID, 80JJAA,80LA.92E, 115JB, or 115VW shall furnish the report electronically on or before the date of filing the return.
V. Total income exceeds 5 lakh rupees or any refund is claimed other than super senior citizen furnishing ITR1 OR ITR 2.
c) In case covered by (a) above the return is required to be e-file under digital signature.
d) In cases covered by (b) above, the return is required to be e-filed using any one of the three manner namely i) Digital Signature Certificate (DSC) or ii) Electronic Verification Code (EVC) or iii) Verification of the return in Form ITR V.
B. In all cases of company the return is required to be E-filed under Digital Signature.
C In case of a person required to file ITR-7:
a) For a political party the return is required to be E-filed under Digital Signature..
b)In any other case of ITR-7, the return is required to be e-filed using any one of the three manner namely i) Digital Signature Certificate (DSC) or ii) Electronic Verification Code (EVC) or iii) ITR V.
In case of a Firm or Limited Liability Partnership or any person (other than a person mentioned in A,B&C above) who are required to file return in Form ITR-5
a) Where accounts are required to be audited under section 44AB, the return is required to be E-filed under digital signature.
b) In any other case of ITR-7, the return is required to be e-filed using any one of the three manner namely i) DSC or ii) EVC or iii) ITR V
E. A company and an assessee being individual or HUF who is liable to audit u/s 44AB are required to furnish form BB (Return Of Net Wealth) electronically using DSC.
F. Information to be furnished for payments, chargeable to tax, to a non-resident not being a company, or to a foreign company in Form ISCA.
G. Appeal to the commissioner in Form 35.
Q. Differentiate between e-filing and Manual filing of Return.
Ans : .............
Q. Write a short note on:
a) digital Signature
b) Security as a disadvantage of a e-filling.
c) Form 26AS
a)Digital Signature Certificate
A digital signature is an electronic form of a signature that can be used to authenticate the signatory of a document. It is used to sign the documents digitally and to authenticate the electronic documents. A digital signature certificate (DSC) is the electronic format of physical or paper certificate that serves as a proof of identity of an individual. These certificates can be issued only through licensed Certifying Authorities (CA) approved by the Controller of Certifying Authorities (CCA).
In other words, Digital Signature Certificate (DSC) are the digital equivalent (that is electronic format) of physical or paper certificate like driving license, passport, etc. It serves as a proof of identity of an individual for a certain purpose; for example, a driving license identifies someone who can legally drive in a particular country. Likewise, a digital signature certificate can be presented electronically to prove one's identity, to access information or services on the internet or to sign certain documents digitally.
Classes of Digital Signature Certificate: Digital Signature Certificates are available in three different classes- class 1, class 1 and class 3. While applying for the certificate, the individual or company must purposely select the class. These are discussed below:
Class 1: This is used by individuals/private subscribers and offer lowest level of assurance. It only verifies the name and email address of individuals.
Class 2: This is needed by companies and other entities. It can be used for filing tax returns. A class 2 digital signature certificate verifies the identity of a person against a pre verified, trusted data base. Class 2 DSCs are required for digitally signing the E-filed ITR.
Class 3: This is needed for individuals or entities to participate in E-auction/E-tenders. Various Government entities like the Railways, banks, Road transport authorities, power board etc. require class 3 DSC to participate in e-auction. It is the highest and most secure form of a digital signature certificate. To obtain this, the applicant must present himself or herself in front of a registration authority.
b) Security as a disadvantage of a e-filling : .....
c) Form 26AS: .........
Q. What are the benefits of e-filing?
Ans: E-filing is more popular and preferred mode in comparison to manual filing due to its numerous benefits over the later. Here are some of the important benefits of filing income tax returns through online mode:
Fast Processing: The acceptance of ITR submission is fast and the refunds are processed faster by the Income Tax Department for the electronically filed ITRs.
More Accurate: E-filing software with built-in validations and electronic connectivity to Income Tax Department is faultless and help minimize errors. Paper based filing with self-calculations can be prone to mistake. Also, when any paper based form is transferred to electronic system, there is always a likelihood of human error in data entry. Obligate / Bound:
No Time & Place Constraint: Assesse can file the return at any time and at any place. E-filing is available 24 hours a day and 7 days a week, so taxpayer may file their returns at their own convenience. 24×7
Accessibility: Most of the paid E-filing software store data in a secure way and allow taxpayer to access it whenever he/she is ready to file subsequent returns.
Proof of filing: Once the income tax return is filed, the acknowledgement of same is generated on real time basis which can be access at anytime from income tax portal.
Electronic Payment: The convenience of e-filing has also led to the convenience of easy and prompt payment and refund. E-filers have the option of linking their respective bank account with their ITR profile. This ensures direct deposit for a refund and direct debit for tax payments.
Q. What are the limitation or disadvantage of e-filing of Return.
Ans: While there are innumerable benefits to electronic filing, it also comes with certain limitations, such as -
(a) Security: Concern of security is more in case of electronic filing of tax returns than in any other types of services as tax software programs are comparatively less secure. The process of ITR filing involves the storage of highly sensitive data electronically. These can be misused by individual with malicious intent and leads to identity threat, like contact information or social security number which are easily traceable from the return.
(b) Technological limitations: Though many tax return preparation software are available in the market which claims the process of e-filing is easy using their software but they are not available free of cost. All the person who are looking to save the money, would not like to use the above software or try to find range of software which are less costly, requires efforts and consume time and energy.
(c) Complex procedure: If assesse is filing easier form with less data E-filing is simple. With increase in data and more add on information in form complications increases, as e-filing has its own limitations. Sometimes the horizon of knowledge of person filing the return is more as compared to tax software, hence preferred to file the paper based return ismore easier.
(d) Margin of error: In case of filing the complex tax returns assesse depends on available tax software, which may behave weird when elaborate return is to be filed. Many times taxpayers discover deductions and other issues which were not there when filing the return manually. Minimum knowledge of computer is required: Person who wants to file the return electronically should have minimum knowledge of how to use computer or internet in order to do E-filing which might be difficult for the senior citizens as they are less familiar with the technology.
Q.What are the type of e-filing?
Ans : The Income Tax Department has started an independent portal for e-filing tax returns. As per the procedure, Returns can be e-filed either with or without a digital signature. There are three ways to file income tax returns:
i) E-filing with digital signature: This option requires one to use a digital signature to sign the E-file. It is the most time savings method as it ensures assesse doesn't have to visit any department office.
ii) E-filing without digital signature: If assesse doesn't have a digital signature, he has to print out the single page receipt cum verification form, called as ITR V, after completing the E-filing process. The form ITR-V has to send to the CPC Center either through ordinary or speed post, within 120 days of uploading the electronically filed return.
iii) E-return intermediaries: these are authorized individual who can file income tax returns on behalf of taxpayers.
Q. What is the procedure for registration of taxpayer on e-filing website?
Ans :
Procedure of E-filing of ITR :
- Visit to E-filing website of the Income Tax Department. (https:// incometaxindiaefiling.gov.in)
- Click on the tab 'register yourself on the home page. Registration page will get open.
- Select user type (such as firm, company, individual etc.) and click on the button "continue".
- Enter your basic details and click on the button "continue".
1. Basic details to be entered: PAN (this will act as your user id for e-filing website)
2. Name (Surname, middle name and first name or organization name in case of Non individuals).
3. Date of birth, date of incorporation.
4. Residential status (whether you are resident or non resident) After submission of basic details, "Registration Form" will open. Enter all the details required in the form.
Mandatory details to be entered
1. Password (This will be the password you need to access the website in future.) and confirm the password in the next tab.
2. Contact detail.
3. E-Mail id.
4. Current address
5. Captcha
After submission of above information, OTP will be sent both in the E-mail id and the mobile number uploaded (both the OTPs will be different). Both the OTPs are required to be entered in the respective field. When both the OTPs are successfully submitted, registration will be successful.
Q. Explain the process for e-filing of ITR.
Ans : Process of E-filing of ITR :
There are two main ways of e-filing of ITR:
(A) Using webpage of Income Tax Department; and
(B) Using ITR preparation software of private vendors
These are explained below:
(A) Using webpage of Income Tax Department:
Following are the main steps to be followed for E-filing of ITR using the webpage of Income Tax Department.
Step1:
Creation of User ID and password
For E-filing of Income Tax Return an assessee has to get himself registered on the official website of the Income tax department.
Procedure of E-filing of ITR :
- Visit to E-filing website of the Income Tax Department. (https:// incometaxindiaefiling.gov.in)
- Click on the tab 'register yourself on the home page. Registration page will get open.
- Select user type (such as firm, company, individual etc.) and click on the button "continue".
- Enter your basic details and click on the button "continue".
1. Basic details to be entered: PAN (this will act as your user id for e-filing website)
2. Name (Surname, middle name and first name or organization name in case of Non individuals).
3. Date of birth, date of incorporation.
4. Residential status (whether you are resident or non resident) After submission of basic details, "Registration Form" will open. Enter all the details required in the form.
Mandatory details to be entered
1. Password (This will be the password you need to access the website in future.) and confirm the password in the next tab.
2. Contact detail.
3. E-Mail id.
4. Current address
5. Captcha
After submission of above information, OTP will be sent both in the E-mail id and the mobile number uploaded (both the OTPs will be different). Both the OTPs are required to be entered in the respective field. When both the OTPs are successfully submitted, registration will be successful.
Step2: Use of Income Tax Return Preparation Utility:
- Go to the income tax portal.
- Select E-filing A.Y. 2021-2022"
- Select the type of assessee who is going to file the income tax return and click on the assessee icon so selected.
- Thereafter select and d@wnload the appropriate utility as per the ITR form the assessee.
Step3: Selection of appropriate ITR Form: There are different types of forms for filing return of income, as prescribed by the Income Tax Department under Rule 12 of the Income Tax Rules 1962, for different categories of assessees earning different types of incomes. Assessees are liable to submit their return of income using a specific prescribed limit.
Step 4: Enabling Macros in excel worksheet and filing of excel utility:
The purpose of enabling the macros is to activate the buttons on the right hand side of the excel utility.
Following steps are to be followed for enabling macros in the excel utility:
i) Go to the office button- click on 'Excel Option'..
ii) Click on 'popular' option and then click on 'show developer tab in the ribbon".
iii) Then 'Developer' option will appear in the tool bar option.
iv) Click 'Macro Security' option. Then click 'Macro Setting' to enable all macros.
After enabling the macros, the option of excel utility will start working.
Step 5: Importing of Data in Form 26AS:
To import Form 26AS'
- Go to 'Online' menu->Form 26AS Import' -> 'Online'
- After login, in 26AS import page against Assessment Year', change the selected listitem & then again select required Assessment year-> enter the verification code as shown in the Captcha image-> click 'Import'.
Step 6: Validation of Files:
After filing the appropriate income tax return, click on the "Validate' button, shown on each and every sheet of income tax return. This helps in identifying the error in the sheet, if any. If there is no error in the sheet then the window appears as 'sheet is OK.
Step 7: Generation of XML File:
After all required schedules are filed and validated, click on 'Generate XML' which will
recheck all sheets and show a final validation sheet. After generation of XML, it has to be saved. For saving the 'XML file, assessee has to click on the 'save XML' button.
Step 8: Uploading the Income Tax Return:
Following procedure is to be followed for uploading validated XML file generated with Income Tax Department.
I. Login to the Income tax Department website with User id and password already created.
II. Click on 'submit return' and select the Assessment Year for which return is to be filed.
III. Select the relevant ITR form.
IV. Select the option of filing the ITR Form with or without digital signature.
V.Click on 'Choose file for providing the path of validated XML file.
VI. If the return is filed without digital signature press 'upload' button. vii. If the return is filed with digital signature, assessee is required to update signature with the department and sign it before uploading.
Step 9: Downloading Acknowledgement Receipt
After successful uploading of Income Tax Returns, an acknowledgement receipt called ITR-V will be generated.
Step 10: Action after Downloading Acknowledgement Receipt:
If the return is filed with digital signature, then it is not required to send the ITR-V to the Income Tax Department. But if the return is E-filed without digital signature then it is required to be e-verified and sent to CPC, Bengaluru.
Q. Who has the authority to sing and verify the ITR. Discuss briefly.
Ans : Section 140 of Income Tax Act, 1961 prescribes who can sign an Income Tax Return for each type of taxpayer attempting to file his return. This has been discussed below:
1. Verification of return Under Section 139 in case of 'individual':
i. It can be verified by the individual himself;or
ii. Where individual is not present in India for any reasons, then duly authorised by him on his behalf, or
iii. by some other person Where individual is not mentally fit to verify the return by himself, then by his guardian or any other person competent to act on his behalf, or
iv. Where individual is unable to verify his return for any other reasons, then by other person who is authorised by indiviual to verify on his behalf.
ii. In the following cases; return can be verified by any other adult member of the family:
Verification of return Under Section 139 in case of 'Hindu Undivided L In case HUF, the return can be verified only by Karta. Family'
a. Where the Karta is not present in India; or
b. Where the Karta is not mentally fit to verify the return.
3. Verification of return Under Section 139 in case of 'Company':
I. It is verified by the Managing Director; or
II. In case where the Managing Director is not able to verify the return due to some unavoidable reasons, or where there is no Managing Director in the company, then by any other director assigned; or
III. In case where company is going to liquidate, then return is verified by the liquidator assigned.
IV. In case of a company whose management has been taken over by the Central Government, then return is verified by the Principal Officer assigned.
However, if the company is non-resident in India, the return may be verified by a person who holds a valied power of attorney from non-resident company to do so.
4. Verification of return Under Section 139 in case of a 'Firm':
I. It is verified by the Managing Partner of the firm; or
II. In case where the Managing Partner is not able to verify due to some unavoidable reasons, or where there is no Managing Partner in the firm, then any other partner
assigned, not being a minor.
5. Verification of return Under Section 139 in case of 'Limited Liability Partnership' (LLP)
i. It is verified by the Managing Designated Partner of the LLP; or
ii. In case where the Designated Partner is not able to verify due to some unavoidable reasons, or where there is no Designated Partner in the LLP, then any other partner assigned.
6.Verification of return Under Section 139 in case of 'Local Authority'
In case of Local Authority, the return is verified by Principal Officer assigned.
7. Verification of return Under Section 139 in case of Political Party':
In case of Political Party return is verified by the Chief Executive Officer of the party.
8. Verification of return Under Section 139 in case of Any Other Association':
In case 'Any other Association' the return can be verified by the principal officer assignedor any member of such association.
9. Verification of return Under Section 139 in case of 'Any Other Person'
I. In case of Any Other Person, the return can be verified by that particular person; or
II. In case where that other person is unable to verify the return due to some unavoidable reasons, the return can be verified by any other person who is authorised to verify.
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