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December 29, 2020

IT Dept introduces ‘Jhatpat processing’ feature for seamless ITR filing

by CA Shivam Jaiswal in Income Tax

IT Dept introduces ‘Jhatpat processing’ feature for seamless ITR filing

The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. The lockdown though necessary has led to a disastrous impact on the economy. With an ever-increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However, the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

The Government of India announced a variety of measures to tackle the situation, from food security and extra funds for healthcare and for the states, to sector related incentives and tax deadline extensions. With the ongoing COVID -19 pandemic a lot of income tax due dates were extended. One of these extension benefits were also provided to the due date of filing income tax returns.

An income tax return (ITR) is basically a document that is filed as per the provisions of the Income Tax Act, reporting one’s income, profits and losses and other deductions as well as details about tax refund or tax liability. The original due date for submitting ITR for assessment year 2020-2021 relevant to financial year 1st April 2019 to 31st March 2020 was 31st July 2020. However, the same was extended due to pandemic COVID-19. The deadline to file ITR by individual taxpayers for FY 2019-20 ends on December 31, 2020, while the same for taxpayers whose accounts require to be audited is January 31, 2021.

To provide more benefits to taxpayers, just a few Days before the last date for filing ITR, the Income Tax department launched a new initiative to make the experience better for taxpayers. It launched the ‘Jhatpat processing’ feature for seamless ITR filing process with the tagline of “FILE KARO JHAT SE PROCESSING HOGI PAT SE”

For what ITR forms was ‘Jhatpat processing’ feature introduced?

The feature was announced for ITR-1 and ITR-4 forms. Taxpayers can access the same for I-T returns for financial year 2019-20 or AY 2020-21 by visiting the e-filing website- incometaxindiaefiling.gov.in.

The ITR-1 Form, also called Sahaj, is the Income Tax Return Form for salaried individuals (i.e., salary/pension/family pension and interest income).

ITR -1 should be filed for an assessment year when Total Income of an Individual includes:

  • Income from Salary/Pension
  • Income from One House Property (excluding cases where loss is brought forward from previous years)
  • Income from Other Sources (excluding winning from Lottery and Income from Race Horses)

In case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income too is limited to the above specifications.

The ITR-4 Form is the Income Tax Return form for those taxpayers, who have opted for the presumptive income scheme as per Section 44AD, Section 44ADA and Section 44AE of the Income Tax Act. However, if the turnover of the business mentioned above exceeds Rs 2 crores, the taxpayer will have to file ITR-3.

ITR 4 is to be filed by the individuals/HUF/ partnership firm whose total income of AY 2020-21 includes:

  • Business income under section 44AD or 44AE
  • Income from profession calculated under section 44ADA
  • Salary/pension having income up to Rs 50 lakh
  • Income from One House Property having income up to Rs 50 lakh (excluding the brought forward loss or loss to be carried forward cases under this head)
  • Income from Other Sources having income up to Rs 50 lakh (Excluding winning from lottery and income from horse races).

Freelancers engaged in the above profession can also opt for this scheme if their gross receipts do not exceed Rs 50 lakhs.

Who will be eligible to avail the benefit of the ‘Jhatpat processing’ feature?

According to the tax department, the feature will only be applicable to taxpayers whose ITRs are verified and bank accounts are pre-validated. Individuals must note that there should not be any arrears or income discrepancy and there should be no mismatch in TDS or challan.

In simple words, this feature can be accessed only by those assessee’s who fulfil the following criterions laid down by the Income Tax department:

  • ITR is verified
  • Bank account is pre-validated
  • No arrears
  • No income discrepancy
  • No TDS or challan mismatch

Is there any penalty if one files their income tax returns after the due date?

If a taxpayer fails to the file the income tax return within the prescribed time limit, he would be liable to pay late fees for such default as per provisions of section 234F of the Income Tax Act.

Section 234F gets attracted if the following conditions are satisfied:

  • The assessee is mandatorily required to file the income tax return as per the provision of section 139; and
  • The assessee has either not filed or has delayed in the filing of the said income tax return.

What are the Late Fees and Penalty under Section 243F?

  • The income tax department notified the taxpayers for late filing of tax returns for A.Y. 2020-21, along with a penalty of Rs 5000 (on filing the return after the due date but on or before 31st December) and Rs 10,000 (on the filing of return after 31st December to 31st March).
  • The taxpayer has to file the late filing of tax returns for A.Y. 2020-21 before 31st March anyhow.
  • Penalty is applicable even if the taxpayer files the returns before 31st March while there is no option to file the returns after 31st March 2021.
  • However, if taxpayer’s total income does not exceed Rs 5 lakh, then the maximum penalty levied for delay will not exceed Rs 1000.

The Finance Ministry reported that 7.10 lakh IT returns were filed till 5 pm of 28th December, 2020. It put the cumulative figure till that hour at 4.23 crore for assessment year 2020-21. Taxpayers can also file their ITR online through e-filing, for which the Income Tax department has established an independent portal.

Taxpayers are urged to file their ITR’s before the said due date. In doing so, one can avoid late fees of Rs 10,000 and the chances of having ‘best judgement assessment’ conducted on their income.

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