Issues -while filing return of Individuals

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The law relating to the filing of income tax return of individual assessee is well enumerated under section 139 of the Income Tax Act. The following points under the income tax law are relevant while file the return of income of individual assessee:

  1. Due date: The income tax return must be filed before the 31st July in case the individual assessee is not subject to tax audit or he is not a partner in the firm which is subject to audit.
  2. Financial Year/ Assessment Year: The return of income is filed on yearly basis for the income earned in the previous year. For example, the income tax return for the previous year 2016-17 must be filed before 31st July 2017.For the previous year 2016-17 Assessment year will be 2018-19.
  3. In case return of income is not filed on or before a due date the following consequences shall follow;

The assessee would be liable for payment of late filing fees/ penalty etc. 

The assessee would lose a right to file the revised return as the belated return cannot be  revised.

Assessee might be liable for best judgement assessment u/s 144.

Assessee may receive a notice from jurisdictional AO to file the return of income.

Assessee would be liable for interest under section 234A/234B/234C.

Individual assessee are not filing the return of income due to following reasons sometimes

Ignorance about law

Reluctance to file

No fear of consequences

Under a misconception that there is no liability to file.

No matter what the reasons are, consequences will be same in any case as mentioned above in point C.


Apart from avoiding the consequences as enumerated in the point no C above one should file the ITR well in time as it might be required for other purposes also ;

  1. At the time of immigration/ visa application etc.
  2. For getting a  certification of net worth.
  3. For applying a loans / credit cards etc
  4. For making application under various housing schemes of the housing boards.

For better understanding let’s discuss some problems and question which arises in the mind of an individual more particularly salary paid employee while filing a return of income




Question: When an individual assesses aged below 60 years becomes liable to file return of income?

Answer : As per section 139 of the income tax Act an individual is liable to file income tax return if his income in the previous year exceeds the maximum amount not chargeable to tax. For instance, for the financial year 2016-17 an individual assesse of a age less than 60 will be liable to file return of income if his income exceeds 250000.

Question: Ramesh is drawing an income from the salary he lives in a owned house. The same was acquired from a loan taken from bank for which he paid a interest of 150000. Ramesh had a taxable salary income of 6 lacs p.a. He because of ignorance has not intimated the employer about the interest on home loan details. Employer had deducted TDS on a salary without considering the interest on home loan? What is a remedy available to Ramesh?

Answer: Ramesh while filing a return of income under section 139 can mention the details in the return as loss under the head house property and set-off the same with the salary income. Thus, the salary income would be reduced to the extent of 150000. Ramesh would compute tax on the income of 450000 and claim a refund of TDS excess deducted by the employer.

Question : Ramesh drawing income under the head salary forget to give the details of investment in tax fixed deposits and NSC to the employer? What is the remedy?

Answer: Ramesh while filing a return of income under section 139 can mention the details of deduction under chapter VI – A and can claim the refund of tax which was deducted by the employer.

Question: The total income of Ram aged 30 years who is resident in India during the fiscal year 2016-17 was INR 400000. He deposited INR 150000 Into the PPF account maintained with ICICI bank and purchased a medical claim policy by paying premium of INR 10000. Ram, felt he is not liable to file return of income as the income is below the maximum amount not chargeable to tax i.e. 2,40,000 (400,000-1,50,000-10,000).

Answer: Ram is liable to file return of income for the fiscal year 2016-17 in accordance with the provisions of section 139 of the Income Tax Act. While calculating the maximum amount not chargeable to tax under section 139 for ascertaining whether a person is liable to file return of income or not no effect shall be given to the deductions under chapter VI-A. Hence the deduction shall be added back to the taxable income to find out the liability to file the return of income.

In this case, even though taxable income of Ram is below basic exemption limit hence he is liable as after adding back the deduction for med claim and PPF the income is above the basic exemption limit of 250000. Hence Ram is liable for filing the return of income.


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