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									Income Tax Returns
  An Overview of the Process
    of e-Filing of Returns

  Presented by CA B. K. VATSARAJ

  – The process of electronically filing Income tax returns
    through the internet is known as e-Filing.

  – The returns are not to be accompanied with any form of the
    documents including statutory form or report of audit (other
    than report u/s 92E) which is otherwise required to be
    furnished before the due date or along with the return for
    making any claims.

                            CA B. K. VATSARAJ
E-filing - Mandatory

 – It is mandatory for all corporate assessees and partnership
   firms who are liable for audit u/s 44AB of the Income Tax
   Act to submit the Income tax returns electronically for A.Y.
   2007-08 & onwards.

 – Rule 12 of the Income-tax Rules, 1962, which prescribes the
   forms for filing of Return of Income had been amended vide
   Notification S.O. No.762(E) dated 14th May, 2007 and new
   forms of the Returns of Income had been notified.

 – The new forms accordingly became applicable w.e.f. A.Y.

                           CA B. K. VATSARAJ
E-filing – Not Mandatory
  – An Individual or HUF or a partnership firm not having Tax
    Audit can furnish return of income in paper form or can file in
    electronic form with digital signature or in electronic format
    without digital signature and subsequently submit the
    verification (acknowledgement) in paper form with physical

  – The proviso (b) to Rule 12(3) of the Income Tax Rules, 1962,
    specifically provides that the persons required to furnish return
    in ITR-7 shall furnish the return in the manner specified in
    clause (i).
    Clause (i) of Rule 12(3) specifies that the return of income is to
    be furnished in the paper form.
                             CA B. K. VATSARAJ
– The ITR-7 is applicable to entities that are required to furnish their
  return of income u/s. 139 (4A) or (4B) or (4C) or (4D).

– Trusts/section 25 companies claiming exemption under section 10
  or 11 have to file return in paper form with all annexure.

– For Agent of non-residents, within the meaning of section 160 of
  the Act, it has been clarified by CBDT in circular no. 8 dated 22nd
  September, 2008, that it will not be mandatory to electronically
  furnish the returns of non-residents for A.Y. 2008-09.
  Drawing the same analogy from the circular issued for A.Y. 2008-
  09, the agents can file paper returns for their non-resident principal
  for A.Y. 2010-11.

                              CA B. K. VATSARAJ
Enclosures with the Return of Income;

It is reiterated by CBDT in its Circular no. 3 of 2009 that return of income
furnished in prescribed forms (except ITR 7) shall not be accompanied by any
attachments. Documents like TDS certificates/tax paid challans/ profits and loss
account/balance sheet etc. shall be produced before the Assessing Officer
whenever he calls for the same.
Tax Audit Report, is to be obtained before the due date of filing of the return.
The same is not required to be attached with the return of income.
Transfer pricing report should not be attached with the return of income, but the
same should be filed separately before the due date of filing the return of
As provided in section 184 of the Act, In case of first return of a partnership firm
or in case of change in the constitution of the partnership firm, certified copy of
the partnership Deed is required to furnished alongwith the return of income so
to get assessed as a partnership firm. Since no enclosures are to be furnished
with the return, certified copy of the Deed should be furnished separately with
the Assessing officer.
                                     CA B. K. VATSARAJ
Scheme of new ITR Forms
Selection of the Forms of Income depends on (a) the status of the
assessee and also (b) the nature of income of the assessee.

- Forms to be used by different types of assessees:

Saral II (ITR-1):   For Individuals having Income from Salary / Pension
                    / Income from One House Property (excluding loss
                    brought forward from previous years) / Income from
                    Other Sources (Excluding Winning from Lottery and
                    Income from Race Horses)

ITR-2:              For Individuals and HUFs not having Income from
                    Business or Profession

                               CA B. K. VATSARAJ
ITR-3:   For Individuals/HUFs being partners in firms and
         not carrying out business or profession under any

ITR-4:   For individuals & HUFs having income from a
         proprietary business or profession

ITR-5:   For firms, AOPs and BOIs

ITR-6:   For Companies other than companies claiming
         exemption under section 11

ITR-7:   For persons including companies required to
         furnish return under section 139(4A) or section
         139(4B) or section 139(4C) or section 139(4D)
                     CA B. K. VATSARAJ
     Comparison of Saral II (ITR-1) vis-à-vis erstwhile ITR-1
S.  Applicability to Assessment year                    A.Y. 2007-08 to A.Y. 2010-11
No.                                                     A.Y. 2009-10

      Nature of Income/Loss covered                     Erstwhile Form Newly substituted
                                                        ITR-1          Form Saral-II (ITR-1)
1.    Income from salary pension                             YES                YES

2.    Exempt income like dividend, L.T.C.G. (STT             NO                 YES
3.    Income from House property (individual having          NO                 YES
      one property)
4.    Income from other sources (excl. winning from          NO                 YES
      lotttery & income from race horses.
5.    Income under the head capital gain (not exempt)        NO                  NO

6.    Income from House property (individual having          NO                 YES
      two or more properties)
7.    Loss from House property (one house) during the        NO                 YES
      year & no b/fd. loss from previous year
8.    Loss from income from other sources                    NO                 YES
Due dates of filing the return of income

The due dates by which the return of income should be filed are as under:

 Sr. No.                           Person                              Due date

    1.     Companies                                                30th September
    2.     A person other than company whose accounts are 30th September
           required to be audited under this Act or under any other
    3.     A working partner of the firm whose accounts are 30th September
           required to be audited under this Act or under any other
    4.     In case of any other assessee                            31st July

                                     CA B. K. VATSARAJ

   There are three ways to file returns electronically

   Option 1: Use digital signature in which case no paper
   return is required to be submitted

   Option 2: File without digital signature in which case
   ITR – V form is to filed with the department. This is a
   single page receipt cum verification form.

   Option 3: File through an e-return intermediary who
   would do e-filing and also assist the assessee to file the
   ITR Form

                          CA B. K. VATSARAJ

Step 1: Procedure to be followed before going for e-filing:

Log on to the website to
download the ITR forms applicable.

These will be available in excel format.

A check should be kept for downloading the latest version of
these forms

                           CA B. K. VATSARAJ
Step 2: Procedure to be followed before filling up the

Before filling up the form it is important to have with you all
the mandatory details required to be filled up.

For that it is advisable to keep a checklist with you along
with your audit program while on audit.

It is important to have the signed audit report & financial
statements in front of you while filing up the forms.

                            CA B. K. VATSARAJ
A specimen of the checklist is given below:

•   General Details :

   Full and Correct Name of the assessee

   Correct PAN

   Full address with city, state and pin-code

   Date of formation / Birth

   Residential status

   Nature of business

   Bank A/c. No. & MICR code

                                   CA B. K. VATSARAJ
 In case of firms, following details in respect of all the

  1. Name,

  2. Address (with city, state & pin-code),

  3. Percentage of share and

  4. PAN

                         CA B. K. VATSARAJ
Step 3 : Procedure to be followed for filling up the

Whenever the ITR forms in excel format are accessed,
one needs to ‘Enable macros’

Enabling Macros in Excel 2003:
1. On the Tools menu, point to Macros >> Security.
2. Now select Security Level as low or medium and press OK.
3. Restart your Excel Utility, and if asked whether you want to
   Enable Macros, select YES.

                           CA B. K. VATSARAJ
Enabling Macros in Excel 2007:

1. Click the Microsoft Office button and then click Excel Options.

2. Click Trust Center, Click Trust Center Settings, and then click
   Macro Settings.

3. Click the option ‘Enable Macros’.

4. Restart your Excel Utility.

                            CA B. K. VATSARAJ
Fill up the entire form by picking up all items from the audit report/financial
statements & placing them under their appropriate heads.

General Points to remember while filling up the forms:

   • Name of the assessee should be written as per PAN Card

   • PAN should be of 10 digits
   • Status of assessee should be properly selected

   • Date of birth/formation should as per PAN Card

   • Section under which return is filed should be correctly mentioned

   • Correct Ward No. should be mentioned

   • Information about the auditor should be correct i.e. name of the signing
      auditor, membership no., name and PAN of auditor (proprietary/firm

                                    CA B. K. VATSARAJ
Special attention to be given, while providing following information in
the ITR form:-

1) Information of certain transactions as reported through Annual Information
    Return (AIR).
   Information of following transactions is to be furnished:
   a) Cash deposits aggregating to Rs.10 lakh or more in a year in any savings
   b) Payment against bills raised in respect of credit card aggregating to Rs.2
      Lakh or more in a year (if you have more than one credit card, total
      payment for both more than Rs.2 Lakh but each card less than Rs.2 Lakh,
      then information not required to be furnished.
   c) Payment more than Rs.2 Lakh for purchase of units of mutual fund
      (payment to each mutual fund more than Rs.2 Lakh – information to be

                                   CA B. K. VATSARAJ
   d) Payment more than Rs.5 Lakh for purchase of bonds or debentures
      issued by a company or institution or RBI Limit of Rs.5 Lakh is qua
   e) Payment more than Rs.1 Lakh for acquiring shares issued by a
      Company. This refers to initial allotment/right issue by a Company, and
      does not refer to shares purchased in the secondary market.
   f)   Purchase/Sale of immovable property more than Rs.30 Lakh.

Mutual funds/Banks/Sub-registrar of assurances etc. are required to file Annual
information return giving details of above transactions. Hence, cases are also
selected for scrutiny based thereon.
Hence, correct details of the above transactions are to be filled up in the return

                                  CA B. K. VATSARAJ
2) If refund is to be received by way ECS – MICR code of Bank is to be

3) Details of brought forward losses i.e. head of loss, year of loss, date of
   filing a return in that relevant year, setting off such loss during the year
   under various head and carrying forward of balance unabsorbed loss are
   to be furnished in the return.

4) Name/PAN/relationship of person whose income is clubbed is to be
   furnished along with nature and amount of income clubbed.

5) Nature and amount of exempt income earned.

6) Details of income taxable at special rate e.g.:
      •Long Term Capital Gain taxable @20%.
      •Short Term Capital Gain taxable @15%., etc.

                                 CA B. K. VATSARAJ
7) In ITR-3 – Details of Name and PAN of the firm, in which he is a partner,
   capital balance as on last day, % share of profit, amount of profit share,
   salary, bonus, and interest received from firm and expenses incurred are
   to be provided.
   If the partner earns any other income like Directors Sitting Fee which is
   taxed under the head “Profits and Gains of Business”, there is no column
   provided in ITR-3 to write this amount and you are forced to reflect that
   amount under the head other sources.

7) In ITR-4 – complete details of all items of Profit and Loss, Balance
   Sheet and Clauses of Tax Audit Report are to be furnished.

9) In ITR 5 and ITR 6 – Complete details of items of Profit and Loss
   Account, Balance Sheet and Tax Audit information is to be provided.

10) In ITR 7 – inter alia, Details of Trustees, 12A registration, Section under
    which exemption is claimed.
                                 CA B. K. VATSARAJ
Step 4 : Validation of the file

Click on the ‘Validate all sheets & generate XML file’ tab to
validate the data entered into.

An XML file will be created and saved at the opted destination.

If there are any errors in filling up the form, then the error will be
traced and displayed on the screen. These errors should be rectified
and once again validation should be done before generating the XML

If these errors are not rectified then validation will not be possible.

Note: Filling up the ITR Forms and generating XML file can be done
offline itself.
                                CA B. K. VATSARAJ
Part 2:

Procedure to be followed after filling up the form and
after generating XML file:

Obtain a photocopy of the assessee’s PAN Card for correct details
of name & date of birth / formation, which are required for creating
login user ID.

Log on to the website

Click on the ‘e-file your returns’ tab.

                              CA B. K. VATSARAJ
The procedure for e-filing of returns will be displayed which is
as follows:

  1) Select appropriate type of Return form.

  2) Download Return Preparation Software for selected Return
     Form. (Excel File)

  3) Fill your return offline and generate a XML file.

     (The above 3 steps have been explained earlier)

                             CA B. K. VATSARAJ
4) Register and create a user id/password:

a) Click on the ‘REGISTER’ option, which appears on the right
   hand side of the web page.

   Here the PAN, First Name, Middle Name & Surname and Date of
   Birth/Incorporation of the assessee are to be entered.

   Then click on the ‘Register’ tab.

                             CA B. K. VATSARAJ
b) Then create User ID/Password. The PAN of the assessee should
   be used as user id & password may be anything

   It is mandatory to fill up the options - Password, Confirm
   Password, Phone No.& Email address.

                            CA B. K. VATSARAJ
5) Login with the user id & password created.
Once logged in it would display “Logged in as _________(NAME)”.

Click on the relevant form on the left panel and select “SUBMIT
RETURN” option.

For making use of digital signature, one needs to download a
software named Java Runtime Environment 6 (JRE 6Beta).

                            CA B. K. VATSARAJ
Click on “BROWSE” to select the XML File from the destination where it was
saved after generating.
Then click on “UPLOAD” button.
7) If your upload is successful, then the acknowledgement of return
   would be displayed.

    Save the acknowledgement at required destination.

    Click on “PRINT” to generate printout of the same.

8) In case the return is digitally signed; then on generation of
   "Acknowledgement" the Return Filing process gets completed.

                              CA B. K. VATSARAJ
Any return which is digitally signed by the assessee and filed
with an E-Return Intermediary (ERI), who, in turn, submits the
return to the Income Tax Department under his digital
signature, will also be deemed to have been filed under a digital
signature of the assessee and no Form ITR-V is required to be

Until now, the digital signature was just to be attached to the
xml file prior to uploading the return.
Now, the digital signature either in form of USB token or PFX
file has to be registered on the income tax portal before the
same can be attached to xml file for uploading.

                           CA B. K. VATSARAJ
9) Incase the return is not digitally signed, on successful uploading
   of e-Return; the ITR-V Form would be generated.

    This is an acknowledgement cum verification form.

    This form has to be verified and signed & should be submitted
    with centralized processing unit at Bengaluru.

    This completes the Return filing process for non-digitally signed

                               CA B. K. VATSARAJ
Dos and Dont's for printing and submitting of ITR-Vs
              to ITD-CPC Bengaluru

1.Please use Ink Jet /Laser printer to print the ITR-V

2.The ITR-V Form should be printed only in black ink.

3.Do not use any other ink option to print ITR V.

4.Use of Dot Matrix printer should be avoided.

5.Ensure that print out is clear and not light print/faded
                         CA B. K. VATSARAJ
Dos and Dont's for printing and submitting of ITR-Vs
              to ITD-CPC Bengaluru
 6. Please do not print any water marks on ITR-V. The
    only permissible watermark is that of "Income tax
    Department" which is printed automatically on each

 7. The document that is mailed to CPC should be signed
    in original.

 8. Photocopy of signatures will not be accepted.

 9. The signatures or any handwritten text should not be
    written on Bar code.
                       CA B. K. VATSARAJ
Dos and Dont's for printing and submitting of ITR-Vs
              to ITD-CPC Bengaluru

 10. Bar code and numbers below barcode should be
     clearly visible.

 11. Only A4 size white paper should be used.

 12. Avoid typing anything at the back of the paper.

 13. Perforated paper or any other size paper should be

 14. Do not use stapler on ITR V acknowledgement.

                        CA B. K. VATSARAJ
Dos and Dont's for printing and submitting of ITR-Vs
              to ITD-CPC Bengaluru
15. In case you are submitting original and revised returns, do
    not print them back to back. Use two separate papers for
    printing ITR-Vs separately.

16. Please do not submit any annexures, covering letter, pre
    stamped envelopes etc. along with ITR-V.

17. The ITR-V form is required to be sent to Post Bag No.1,
    Electronic City Post Office, Bengaluru, Karnataka-560100,
    by ordinary post.

18. ITR-Vs that do not conform to the above specifications may
    get rejected or acknowledgement of receipt may get delayed.
                          CA B. K. VATSARAJ
          e-Filing Process – At a glance
1   Select appropriate type of Return Form

2   Download Return Preparation Software for selected Return

3   Fill your return offline and generate a XML file.

4   Register and create a user id/password

5   Login and click on relevant form on left panel and select
    "Submit Return“

6   Browse to select XML file and click on "Upload" button
                             CA B. K. VATSARAJ
         e-Filing Process – At a glance
7   On successful upload acknowledgement details would be
    Click on "Print" to generate printout of acknowledgement/
    ITR-V Form.

8   In case the return is digitally signed, on generation of
    "Acknowledgement" the Return Filing process gets completed.
    You may take a printout of the Acknowledgement for your

                           CA B. K. VATSARAJ
         e-Filing Process – At a glance
In case the return is not digitally signed, on successful uploading of
e-Return, the ITR-V Form would be generated which needs to be
printed by the tax payers.

This is an acknowledgement cum verification form.
The tax payer has to fill-up the verification part and verify the

A duly verified ITR-V form should be mailed to
“Income Tax Department – CPC, Post Bag No - 1, Electronic
City Post Office, Bengaluru - 560100, Karnataka, ”
BY ORDINARY POST ONLY ” within 30 days after the date of
transmitting the data electronically.

                            CA B. K. VATSARAJ
          e-Filing Process – At a glance
9    ITR-V sent by Speedpost, Registered Post or Courier will
     not be accepted.
     No Form ITR-V shall be received in any other office of the Income-tax
     Department or in any other manner.

     In case, Form ITR-V, is furnished after the above mentioned period, it
     will be deemed that the return in respect of which the Form ITR-V has
     been filed was never furnished and it shall be incumbent on the assessee
     to electronically re-transmit the data and follow it up by submitting the
     new Form ITR-V within thirty days.

     This completes the Return filing process for non-digitally signed Returns.

10   For any assistance in filing the ITR-V please contact the Public Relations
     Officer of the local Income Tax Office.

                                CA B. K. VATSARAJ
       Relevant Notifications, Circulars &
•   CIRCULAR NO. 03 / 2009, DATED 21-5-2009
•   CIRCULAR NO. 8/2008, DATED 22-9-2008
•   CIRCULAR NO. 6/2008, DATED 18-7-2008
•   CIRCULAR NO. 5 / 2007, DATED 26-7-2007
•   CIRCULAR NO. 3/2007, DATED 25-5-2007
•   CIRCULAR NO. 9/2006, DATED 10-10-2006
•   NOTIFICATION NO. 75/2009, DATED 30-9-2009
•   NOTIFICATION NO. 70/2009, DATED 22-9-2009
•   NOTIFICATION NO. 210/2007, DATED 27-7-2007
                      CA B. K. VATSARAJ


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