Finance (No. 2) Act, 2019 had inserted a new seventh proviso to section 139(1) of the Income Tax Act, 1961 (‘the IT Act’) w.e.f. 01-04-2020 for mandatory filing of ITR for those people who have certain prescribed transactions even though that person is otherwise not required to file a return of income due to the fact that total income is below the minimum liable to tax.
Section 139(1) of the IT Act prescribes the requirements to furnish the return of income.
As per Section 139 (1) of the IT Act “every person –
if his total income during the previous year exceeded the maximum limit not chargeable to incometax. shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.”
The seventh proviso which was inserted w.e.f. 01-04-2020 to Section 139(1) of the IT Act reads as under -
“Provided also that a person referred to in clause (b), who is not required to furnish a return under this sub-section, and who during the previous year -
will be required to file the return in prescribed manner. A new column for same was inserted in Income tax return as Part A-General Information asking “Are you filing return of income under Seventh proviso to section 139(1) but otherwise not required to furnish return of income?” for filing an Income tax return (‘ITR’) from Assessment Year 2020-21 (Financial Year 2019-20).
In addition to the above points, and as per the new notification issued in April 2022 a return also needs to be filed under seventh proviso if –
All the above provisos are applicable w.e.f. 01/04/2022 i.e. for returns to be filed for AY2022-23 and onwards.
The CBDT is empowered to prescribe other conditions or high-value transactions under the above mentioned seventh proviso. It is not necessary that all the conditions have to be fulfilled. Fulfilling any one of the above-mentioned conditions is sufficient to mandate filing a return of income.
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