The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

Updated ITR Filing 2022: The IRS recently released a new form for the filing of Updated Income Tax Returns.

Updated ITR Submitting 2022:
The Internal Revenue Service recently released a new form for filing Updated Income Tax Returns. Budget 2022 featured a new idea of updated returns. It gives taxpayers two years from the end of the relevant assessment year to alter their ITRs. The new feature is meant to assist taxpayers who frequently make mistakes or omissions while filing ITRs.

The following are ten things you should know about the ITR filing update:

1. On the Updated ITR form, taxpayers must state the reason for filing as well as the amount of income that will be taxed in the updated return.

2. Taxpayers are not obligated to break down the income reported on their ITR (Updated).

3. Taxpayers can now file their amended income tax returns for fiscal years 2019-20 and 2020-21 using the new form ITR-U.

4. A digital signature or an electronic verification code is required for some taxpayers to file the Updated ITR electronically. The taxpayer must file the applicable assessment year’s ITR Forms and submit them with the new ITR-U.

5. Within two years of the end of the relevant assessment year, the ITR-U must be filed. Taxpayers must also explain reasons for revising their ITR in order to do so. There are a variety of reasons for submitting ITR-U, including a previous return that was not filed, income that was not declared correctly, incorrect income heads chosen, and the reduction of a carried forward loss, among others.

6. If an updated ITR is filed within a year (12 months) of the end of the relevant assessment year, a taxpayer must pay an extra 25% tax and interest owed.

7. If an amended ITR is filed after a year (12 months) but before 24 months from the end of the relevant assessment year, the taxpayer must pay an additional 50% tax and interest due.

8. If the person fails to pay the additional taxes, the return will be declared void.

Also Read: DELAY IN TAX AUDIT DUE TO ONGOING ASSESSMENT IN SOME OTHER ACT. PENALTY U/S 271B TO BE DELETED


9. If the entire tax owed is to be lowered and losses are to be offset against income, for refund, or for an increase in refund amount, you cannot file ITR-U.

10. For each Financial Year, a taxpayer can only file an Updated ITR once. As a result, it should be done with caution.

Special provision for the full value of consideration in certain cases.

Special provision for the full value of consideration in certain cases.

S-50C of IT Act, 1961

Consideration received from the transfer of a capital asset, being land or building or both

At a Value less than SDV – STAMP DUTY VALUE(for the purpose of payment of stamp duty in respect of such transfer)

The STAMP DUTY VALUE (SDV) shall be deemed to be the FVC (full value of the consideration) received or accruing as a result of such transfer.

What date shall be adopted for Computing Full Value Consideration (FVC)?

Where the date of the agreement for fixing the amount of consideration
And
the date of registration for the transfer of the capital asset is not the same,

the value adopted by the stamp valuation authority on the date of agreement may be taken.

Provided that the amount of consideration, or a part thereof, has been received by way of:

  • 1. A/c payee cheque or
  • 2. A/c payee bank draft or
  • 3. Electronic clearing system through a bank account or
  • 4. Through such other electronic mode as may be prescribed,

on or before the date of the agreement for transfer.

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Relaxation:-

Where SDV <= 110% of Consideration (as a result of the transfer),

Actual Consideration so received shall be deemed to be the FVC

What Happens If the Seller Does Not Accept the Value Adopted by SVA?

There is a possibility that the value adopted by Stamp Valuation Authority (SVA) may not be depicting the FMV at all times or the seller himself may not be satisfied with the value adopted by Stamp Valuation Authority (SVA) based on factors known to him.

Though stamp duty is generally borne by the purchaser, the purchaser may not be very concerned with the value adopted by SVA as it will be its cost of purchase.

S-194-O Payment of certain sums by the e-commerce operator to participant 

However, it makes a huge difference to the seller as it impacts his income tax which can be substantial based on the value.

 

As it is a matter of income tax for the seller, he is allowed to question the value adopted by SVA and claim the value is more than FMV under Section 50C before the income-tax authority unless such value is already questioned before any other authority or court.

In such cases, the income tax officer is required to make a reference to the valuation officer and market value will be determined by such a valuation officer.

The valuation officer, while determining market value, has to call for records/ documents from the taxpayer if required and give the taxpayer an opportunity of being heard and passing an order in writing, stating his valuation. Any value determined by the valuation officer can also be questioned before higher authorities.

Roc Annual Compliances

Roc Annual Compliances

All about ROC Annual Return & Forms MGT-7, MGT-8 and AOC-4
Annual Return

Annual returns must be filed with the Ministry of Corporate Affairs (MCA) / Registrar of Companies (ROC) by every company incorporated under the Companies Act 1956 / 2013. Every registered company, whether or not it does business, is required to file these annual reports.

Every company registered under the Companies Act, whether it is a small, one-person business, a private limited company, or a public limited company, is required to file Annual Returns with the Registrar of Companies once a year to keep themselves informed about the company’s operations and management. The essential information about the company, its shareholders, directors, and so on as of the last day of the financial year, March 31st, is contained in the Annual Return.

Section 92 of the Companies Act, 2013 and Rule 11 of the Companies (Management and Administration) Rules, 2014 govern annual returns. Compliance with the Companies Act 1956 / 2013 is required for companies registered in India.

The corporation must comply with the Annual Return compliance requirement regardless of its entire turnover or capital size. On a day-by-day basis, late or non-filing of the ROC Annual Return attracts high interest, penalties, and a late charge.

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Annual Return – Overview
Annual Return (Form MGT-7)

Annual Return under the Companies Act is a yearly Return containing the general particulars of the company at the end of the financial year, such as details of its registered office, business activities, particulars of its holding, subsidiary companies, shares, debentures and other securities and shareholding pattern, members and debenture-holders, promoters, directors, key managerial personnel, and changes therein, members and debenture-holders, promoters, directors, key managerial personnel, meetings of members, and compliances, disclosures etc.

What is the purpose of the MGT-7 e-Form?

Every corporation must prepare an MGT-7 form giving the details as of the end of the fiscal year. These specifics include the following:-

  • The registered office, primary business activities, and information about the company’s holding, subsidiary, and affiliate firms;
  • The company’s shares, debentures, other securities, and shareholding pattern;
  • The company’s indebtedness;
    Members and debenture holders, as well as any changes that have occurred since the preceding financial year’s end;
  • The promoters, directors, and key managerial people, as well as any changes to them since the previous financial year’s end;
  • Meetings of members or a class of members, the Board of Directors, and its different committees, as well as attendance information;
  • Penalty or punishment imposed on the company, its directors or officers, including details of compounding of offences and appeals made against such penalty or punishment;
  • Remuneration of directors and key managerial personnel;
  • Penalty or punishment imposed on the company, its directors or officers, including details of compounding of offences and appeals made against such penalty or punishment;
  • The matters relevant to certification of compliances and disclosures as may be necessary;
  • Its Shareholding Pattern; and
  • Any other matters as may be required in the form.
  • What are the required attachments to submit this form?
  • This e-form can be completed by uploading scanned copies of documents to the attachments section. This is the last section of the form.
  • List of shareholders, debenture holders, approval
  • letter for AGM extension, copy of MGT-8, and
  • optional attachment(s), if any, are all mandatory attachments.
MGT – 7A: An Abbreviated Annual Return

By revising the requirements of the Companies (Management and Administration) Rules, 2014, the Central Government has prescribed a shortened form of annual return for “and Small Company,” which will take effect on March 5, 2021. This form is for OPC and small enterprises’ Annual Returns for the fiscal years 2020-21 and onwards.

One Person Company (OPC): According to Section 2(62) of the Companies Act, 2013, a “One Person Company” is a corporation with only one member.

Small Company: A Public Company is not regarded a ‘Small Company’ under Section 2(85) of the Companies Act 2013.

A corporation that is not a public company is deemed a ‘Small Company’ if it meets both of the following criteria:

(a) The company’s paid-up share capital does not exceed Rs. 2 crores or such greater amount as may be prescribed, but not more than Rs. 10 crores;

(b) Turnover for the immediately preceding financial year, as determined by the P&L Account, does not exceed Rs. 20 crores or such greater amount as may be prescribed, but not more than Rs. 100 crores.

Haven’t received an Income tax refund yet? Follow these Steps

Form MGT-8: Certificate from a Practicing Company Secretary

According to the Companies Act 2013, Section 92(2) read with Rule 11(2) of the Companies (Management and Administration) Rules, 2014, Form MGT-8 is a certification granted on a company’s annual report by a practising company secretary. A listed business or a firm with a paid-up share capital of 10 crore rupees or a turnover of 50 crore rupees or more must attach MGT 8, which must be validated by a Company Secretary in Practice (PCS) and given in stipulated Form No. MGT-8. If MGT 8 is released after October 1, 2020, a practising Company Secretary must generate a UDIN (PCS).

Timeline for Filing a Company’s Annual Return

1. Annual Return (MGT-7A) Due Date: Although the OPC is not required to convene an annual meeting, the due date for filing Form MGT 7A is 60 days after the end of the financial year. From FY 2020-21 onwards, One Person Companies (OPCs) and Small Businesses must file an annual return in Form MGT-7A.

2. Except for One Person Companies (OPCs) and Small Businesses, Form MGT-7A is required for all Annual Returns. Within 60 days of the conclusion of the AGM, the same must be lodged with the Registrar of Companies (including event date).

ANNUAL RETURN FILING PROCEDURE IN GENERAL

1. Prepare the Annual General Meeting Notice, Agenda, Notes to the Agenda, and other materials (AGM)

2. Organize a Board of Directors meeting and pass the required resolutions.
3. Appoint an auditor to do due diligence on the financial statements and prepare them in accordance with Schedule III of the Companies Act, 2013.

Extended due dates of Income Tax Return and Tax Audit

4. According to the Companies Act of 2013, the Board Report, Annual Return, and other essential documents should be prepared by the Director of the company.

5. Another Board Meeting should be held to approve the company’s draught financial statements, Board Report, and Annual Return, which must all be prepared and reviewed by the company’s directors.

6. Organize an annual general meeting (AGM). Only until the company’s financial statements are accepted by the shareholders at the Annual General Meeting are they considered final.

7. Gather all relevant documentation for filing annual returns.