Section 139 (1) of Income Tax Act Seventh Proviso: Applicability, Due Dates & Return Filing


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Updated on Aug 24, 2023

Taxpayers should know more about Section 139(1) of the Income tax act since it is the section under which they have to file their returns if they have missed filing within the due date.

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Section 139(1) Seventh Proviso of Income Tax Act – An Overview

Filing income tax returns is mandatory if your annual income surpasses Rs. 2.5 lakh as per the prevailing tax rules. Section 139(1) is a vital component of the ITR. People missing out on their due date for filing returns have to use this section for filing their ITRs. Here are some of the main provisions covered under the Income Tax Act’s Section 139(1):

    • Compulsory and voluntary income tax returns.
    • ITRs filed by charitable and religious organizations.
    • ITRs filed in case of any losses.
    • Revised ITR filing.
    • ITR filing of political parties and entities seeking exemptions under Section 10.
    • ITR filing by investment funds, business trusts and defective IT returns.

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Section 139(1) of Income Tax Act Due Date

Those who do not require auditing or assessing of their books of accounts should file ITRs by the 31st of July for each assessment year. This category includes the following types of filers:

  • Consultants.
  • Salaried professionals or employees.
  • Freelancers.
  • Self-employed or professional individuals.

Those having their books of accounts audited should file by 30th September each year. This category includes companies, self-employed individuals or professionals, working partners at firms/companies, and consultants. If you fall in this category, make sure that you keep the last date in mind and abide by all the provisions of the same.

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Section 139(1) of Income Tax Act – Mandatory Returns

The section covers both voluntary and mandatory IT returns. The following categories are required to file compulsory ITRs:

  • Private, public, domestic or foreign firms/companies situated in the country or doing business here.
  • Any person with total income surpassing the maximum limit for exemptions.
  • All firms including Unlimited Liability Partnerships and also Limited Liability Partnerships or LLPs.
  • Any Indian resident with assets situated outside India including financial shareholding of any foreign company.
  • Any Indian resident with the signing authority for any account outside India.
  • Any association of persons or AOPs, BOIs or bodies of individuals, and HUFs or Hindu Undivided Families.

As per the Section 139(1) of Income Tax Act, individuals or companies are not compulsorily required to file returns under the voluntary returns plan. Even if they file returns voluntarily, they will be taken as valid ITRs.

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Seventh Proviso of ITR Section 139(1) 

The Indian Government has integrated new guidelines for tax return filing under this section. This was the seventh proviso to section 139(1) and was implemented on 1st April, 2020.

Certain categories of entities or people will have to file ITRs even while falling in the threshold for exemption, in case they undertake transactions of higher values. Now that you know what is 139(1) in income tax returns, you should read on for information on a few more aspects.

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Key Changes in ITR forms for the Assessment Year

ITR 1 to ITR 7 are the new forms of ITR which were introduced with added schedules and columns. The new format makes it easy to fill up the necessary details while filing ITR. These new amendments are significant to the revised Income Tax Act:

  • Modifications in ITR-V (Form of Acknowledgment) for the 2020-21 Taxation Year

Both the unverified and verified forms have been changed by the Department of Income Tax. All the essential details (e-filing data) about the taxpayer can be seen in the new form of ITR V. It will not have any details of deductions, total income, taxes, etc. Once the form has been verified, the person who was assessed may download the final ITR-V.

  • Rule 12 in connection with ITR-1 and ITR-4 or Sahaj and Sugam respectively have been modified via Notification No. 31/2020 for 2020-21 AY

Under this rule, the joint owners of residential property can file ITR-1 and 4 in case they can show a return of income or ROI under the 7th proviso to section 139(1).

Those required to file ITRs under the Section 139(1) Seventh Proviso

  • BOIs
  • HUFs
  • AOPs
  • Individuals
  • Artificial juridical persons

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What transactions come under the Section 139(1) Seventh Proviso? 

There are many types of transactions which have coverage under this Act. They include:

  • Total foreign travel expenditure surpasses Rs. 2 lakh.
  • Total current account deposits surpass Rs. 1 crore in either one or multiple accounts.
  • Payment of electricity bills surpassing Rs. 1 lakh. However, this is only applicable for the taxpayer himself or herself and not if he or she is paying bills for others in the family.
  • Other transactions of higher values as per the guidelines of the CBDT (Central Board of Direct Taxes).

Hence, the provisions of this Section 139(1) are different from Section 139 (9) of Income Tax Act.

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What are the High-Value Transactions Covered under the 7th Proviso to Section 139 (1) of the Income Tax Act, 1961?

It is compulsory for an individual to furnish income tax returns if the person has not undertaken any of the below-mentioned high-value transactions during a financial year –

1. If the collective deposits in his/her current account (accounts) exceed INR 1 crore

So, in case the aggregate amount placed into the current account(s) upheld by a person with any co-operative societies and bank(s) is equal to or more than INR 1 crore, the person has to furnish an income tax return under the 7th Proviso to Section 139 (1). The deposits can be of any mode like cheque, cash, online transfer, and so on

2. If the collective expenditures on travel abroad exceed INR 2 lakhs

If a person has incurred an expenditure that comes to an aggregate of INR 2 lakhs and beyond on travel done across borders to a foreign land, he/she is required to file the income tax return under 7th Proviso to 139 (1) Section of IT Act, 1961. In this case, the travel expenses incurred on travel abroad can be for your own self or for another person.

3. If the collective expenditure towards electricity consumption exceeds INR 1 lakh

If a person has incurred costs that aggregate INR 1 lakh or beyond towards paying electricity bills, he/she has to file an income tax return under the 7th Proviso to Section 139 (1). However, this condition is fulfilled only if it covers the consumption costs of electricity as consumed by the person concerned.

Income Tax Act’s 7th Proviso to Section 139 (1) applies to other high-value transactions as well that are prescribed by the Central Board of Direct Taxes.

ITR Filing Procedure under Section 139(1)

  • In the ITR form, under Part A-General Information, there is a column containing this question- Are you filing a return of income under the seventh proviso to Section 139(1) but otherwise not required to furnish return of income?
  • You can either click yes or no, depending on what is applicable to you.

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ITR filing sometimes seems difficult although it gets smoother with practice and experience. Make sure that you consult a professional if you are still grappling with the system. File IT returns on time, especially if you carry out high-value transactions in spite of not falling in the tax-exempt category. Remember that it is easier to trace these transactions in these cases and hence you should not delay the inevitable! This guide will give you all the information you require about Section 139(1) of the Income Tax Act.

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FAQs on Section 139(1) of the Income Tax Act - Applicability, Due Dates & Return Filing

What is section 139 in income tax?

Section 139 of the Income Tax Act 1961 features the conditions related to late filing of various income tax returns. It also features the guidelines to file delayed returns. This section has several sub-sections.

What is the time limit and conditions for submitting a belated return?

You can file belated returns before the end of a financial year. Alternatively, you can file it before the completion of the assessment as well. (whichever is earlier). So, generally the belated ITRs are filed after the deadline, which is up to 31 March of the financial year.

What happens if you file an income tax return after the due date u/s 139 (1)?

Under section 139 (1), if you file an income tax return after the due date i.e. July 31st, then you have to file it along with additional interest and late fees and submit it within the extended deadline of March 31.

What is the penalty for filing a belated return?

According to the new changed rules stated under section 234F of the Income Tax Act, you are likely to pay a maximum penalty of Rs. 5,000 if you file for belated returns.

What is the penalty for non filing of income tax return?

The penalty for non-filing of income tax return levied on an individual could be the penalty interest at the rate of 1% per month on the outstanding tax.

How do I respond to a non-filing of income tax return notice?

Non-filing of ITR may attract penalties and severe consequences. You can respond to a non-filing of income tax return notice online by visiting the portal. Here you can view the notice and reply to it in the 'View and Submit Compliance’ section.

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Mar 08, 2022
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