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If your taxable income exceeds Rs.5 lakhs, E-filing of your Income-tax Return shall be mandatory from A.Y. 2013-14!

         The Income-tax (IT) Department is seeking to place increasingly greater reliance on Information Technology (IT). Under its notification issued on 1st May, 2013, the Central Board of Direct Taxes (CBDT) has made it mandatory for all taxpayers with total income exceeding Rs.5 lakhs to e-file their tax returns from the current Assessment Year (AY) 2013-14.

        Today, nearly 90% of India’s personal Income-tax collection is contributed by this group with incomes above Rs.5 lakh, although they comprise just 10% in number, an estimated 35 lakhs out of the total 3.50 crore taxpayers in India. This also goes a long way in building a strong database of the income and financial information and analysis of taxpayers in the country. Infact, through the FM’s budget speech this year, we got to know for the first time that there are only 42,800 persons in the country who have admitted taxable income over Rs.1 crore. We would not have got this information, without the e-filing database of the I.T. Department.

          Starting from Companies in AY 2006-07 and Partnership Firms liable to tax audit under Section 44AB in AY 2007-08, Proprietorships of Individuals and HUFs liable to tax audit from AY 2010-11, have all been mandatorily required to file their income-tax returns electronically.

          With effect from AY 2012-13, mandatory filing of E-returns came to be extended for all Individuals and HUF taxpayers having taxable income of Rs.10 lakhs or more.

           Moreover, a resident Individual or HUF (other than not ordinarily resident in India) is now required to file E-return, if such Individual or HUF has assets (including financial interest in any entity) located outside India or has signing authority in any account located outside India. This obligation for mandatory E-filing of the Income-tax Return is required to be discharged, even where the taxpayer having such assets outside India does not have any taxable income in India. It needs to be noted that for this purpose, Non-Residents or Residents but Not Ordinarily Residents, within the meaning of Section 6 of the Income-tax Act, will not be required to declare any of their overseas assets in their Indian Tax Returns.


        Widening the scope of E-filing, the (CBDT), vide its Notification dated 1-05-2013, has announced that it shall be mandatory for every person (except Charities and Political Parties filing Returns in ITR-7), having total income exceeding Rs.5 lakhs, to E-file its Return of Income. Accordingly, not only Individual and HUF, but Partnership Firm, LLP, AOP, BOI etc. shall also be required to E-file their Income-tax Returns with effect from AY 2013-14, if their Total Income exceeds Rs.5 lakhs.

         Under the above notification, E-filing of Audit Reports under Section 44AB (Tax Audit), under Section 92-E (Transfer Pricing) and under Section 115JB (MAT Computation) have also been made mandatory with effect from AY 2013-14.

All other taxpayers have been given the option to file their tax returns, either in a paper form or electronically. The Income-tax Return forms (except ITR-7 for charities and political parties) have been designed as annexure-less so as to make them amenable for electronic filing. 

            Taxpayers are required to submit annexure-less returns, with the stipulation that all supporting documents, statements, receipts, certificates, audited reports etc., otherwise required to be furnished alongwith the return shall be produced before the Assessing Officer, only on demand. Section 139C of the Income-tax Act has made statutory provisions in this regard.

            Moreover, with effect from 1st June, 2013, enabling provisions for facilitating E-filing of Wealth-tax Returns for certain classes of taxpayers (as may be notified) have also been made under new provisions of Section 14A and 14B of the Wealth-tax Act.


            With effect from AY 2011-12, a simple 2 page I.T. Return called Sahaj came to be introduced for individual taxpayers declaring salary, pension, income from one house property and income from other sources. While tax exempt dividend or long term capital gains could be shown under this return, taxpayers earning taxable capital gains were not eligible to use Sahaj.

          As per CBDT Notification dated 1st May, 2013, it has been notified with effect from AY 2013-14 that ITR -1 (Sahaj) can also not be used where the Return reflects any loss under the head ‘Income from house property’ or ‘Income from other sources.’ Moreover, Sahaj cannot be used for filing Returns, where the taxpayer is claiming any exemption exceeding Rs.5,000 in respect of any income covered u/s. 10, 10A, 10AA etc or is claiming any double tax avoidance relief u/s. 90, 90A or 91. 

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