Economy

File tax returns if you have foreign trips, steep electricity bills

PTI New Delhi | Updated on July 07, 2019 Published on July 07, 2019

Here is why even those high spenders whose taxable income is below the threshold exemption limit of Rs 5 lakh should also file their returns.

The government has made income tax return filing mandatory for high spenders even if their taxable income is below the threshold exemption limit of Rs 5 lakh.

Those mandated to file returns include people spending more than Rs 2 lakh on a foreign trip or depositing Rs 1 crore in a year in a bank account or paying electricity bill of more than Rs 1 lakh in a year.

What has been announced in the budget ?

“Currently, a person other than a company or a firm is required to furnish the return of income only if his total income exceeds the maximum amount not chargeable to tax, subject to certain exceptions. Therefore, a person entering into certain high-value transactions is not necessarily required to furnish his return of income,” the Budget documents said.

It proposed to amend section 139 of the Income Tax Act to ensure that persons who enter into certain high-value transactions have to furnish their return of income.

So, any person who has in the previous year “deposited an amount or aggregate of the amounts exceeding Rs one crore in one or more current account maintained with a banking company or a co-operative bank; or has incurred expenditure of an amount or aggregate of the amounts exceeding Rs two lakh for himself or any other person for travel to a foreign country; or has incurred expenditure of an amount or aggregate of the amounts exceeding Rs one lakh towards consumption of electricity” will have to file a tax return.

Long Term Capital Gains

Also, any person claiming the benefits of tax exemption from long term capital gains under various provisions under section 54 of the Income Tax Act will have to file a tax return.

“Further, currently, a person claiming rollover benefit of exemption from capital gains tax on investment in specified assets like house, bonds etc, is not required to furnish a return of income, if, after claim of such rollover benefits, his total income is not more than the maximum amount not chargeable to tax.

“In order to make furnishing of return compulsory for such persons, it is proposed to amend the sixth proviso to section 139 of the Act to provide that a person who is claiming such rollover benefits on investment in a house or a bond or other assets, shall necessarily be required to furnish a return, if, before claim of the rollover benefits, his total income is more than the maximum amount not chargeable to tax,” it said.

From which year is it applicable ?

These amendments will take effect from April 1, 2020, and will, accordingly apply in relation to the assessment year 2020-21 and subsequent assessment years.

Cashless transactions

To discourage cash transactions and move towards a less-cash economy, the Budget also proposed to insert a new section 194N in the Income Tax Act to provide for levy of TDS at the rate of 2 per cent on cash payments in excess of Rs 1 crore in aggregate made during the year by a banking company or cooperative bank or post office to any person from an account maintained by the recipient.

“It is proposed to exempt payment made to certain recipients, such as the Government, banking company, cooperative society engaged in carrying on the business of banking, post office, banking correspondents and white label ATM operators, who are involved in the handling of substantial amounts of cash as a part of their business operation, from the application of this provision,” the Budget documents said.

It is proposed to empower the Central government to exempt other recipients, through a notification in the official Gazette in consultation with the Reserve Bank of India.

This amendment will take effect from September 1, 2019.

Published on July 07, 2019

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.