A Comprehensive Guide on Section 139 of the Income Tax Act
Section 139 of the Income Tax Act consists of several provisions that guide an individual or non-individual taxpayer who fails to file the Income Tax Returns within the due date to file the same as per the instructions mentioned in sub-sections of Section 139.
Want to know more details about this Section? If yes, then keep reading!
What Are the Sub-sections of Section 139?
1. Section 139(1): Voluntary and Mandatory Income Tax Returns
This sub-section is valid for voluntary and mandatory Income Tax Returns and is applicable in the following situations:
- Voluntary Returns
Entities or individual taxpayers who do not have to file Income Tax Returns mandatorily are considered voluntary returns that are valid tax returns as per the Income Tax Act.
- Mandatory Returns
If the total annual income of a person other than a company or a firm is above the exemption threshold, then he or she needs to file an Income Tax Return within the due date.
Partnership firms, Limited Liability Partnership, and other eligible firms need to file an Income Tax Return irrespective of their income or loss.
Every company has to file its income tax return mandatorily, irrespective of its income. All Public, private, foreign, or domestic companies placed or operating businesses in India need to file an Income Tax Return.
If the total income of Body of Individuals, Association of Persons, and Hindu Undivided Family is more than the exemption limit, then such taxpayers need to file IT returns.
Residents owning an asset outside India or who have retained the right of their signature for an account located outside India shall need to file IT returns regardless of the tax liability applicable on those earnings.
As per Section 139(1)(c) the Central Government can exempt any taxpayers from filing their income tax returns.
After the issuance of the notification under Section 139(1c), it should be put before two Houses of Parliament when sessions are held for at least 30 days. Once both Houses agree and modify the notification, it will come into effect; else notification will become ineffective.
2. Section 139(3) – Filing ITR During Loss
This sub-section focuses on ITR if an entity or individual taxpayer incurs a loss in the previous fiscal year.
Taxpayers are liable to file an Income Tax Return of loss under the following situations:
If a person experiences loss in income under 'Capital Gains' or 'Profits and Gains of Business and Professions', then it needs to file an ITR given the condition that it wants to adjust this loss with future income. This option is available only when the ITR denoting loss is filed within the prescribed due date.
If a person incurs a loss under 'House or Residential Property', it can carry forward this loss even if it filed an ITR after the due date.
If a person wishes to adjust the loss with income from another category in a similar fiscal year, it can adjust the same even after filing ITR after the due date.
However, they can take forward unabsorbed depreciation in such cases.
Loss incurred in past years can be adjusted with future income if the firm had filed tax returns for those losses within the due date and were assessed.
3. Section 139(4): Late Filing of Income Tax Returns
This sub-section focuses on the late filing of income tax returns which contains the following provisions:
An assessee can file their ITR any time before three months prior to the end of the assessment year or before the assessment is completed.
Taxpayers filing ITR after the due date are liable to pay a penalty of ₹ 5,000 as per Section 234F. The penalty will not exceed ₹1000 if the total income of the assessee is not more than ₹5 Lakh. Penalties are not applicable to tax returns that do not mandatorily require filing as per Section 139(1).
4. Section 139(4)(a): IT Returns of Charitable and Religious Trust
Taxpayers earning income from property owned by a public charitable or a religious trust, partly or wholly, or receiving voluntary contributions as per the sub-section 2(24)(ii)(a) and the total income is more than the maximum exemption limit, shall need to file an ITR.
5. Section 139(4)(b): ITR by Political Parties
In case the total income of a political party is more than the maximum exemption limit, it must file an Income Tax Return. The total income evaluated under this Section is devoid of Section 13(A) provisions.
6. Section 139(4)(c)
This sub-section deals with the institutions whose income is more than the maximum tax exemption limit. However, institutions enjoying other exemptions are not covered here.
Institutions that need to file ITR under this Section are-
Scientific research institutions
News agencies
Institutions stated under Section 10(23A) and Section 10(23B)
Hospitals, universities and other educational institutions
7. Section 139(4)(d)
Institutions, colleges, universities who are not liable to file ITR or loss under any other provisions in this Section are liable to file their returns under this section.
8. Section 139(4)(f)
As per this sub-section, investment funds under section 115UB need to furnish their ITRs even if they are not covered under other provisions of this section.
9. Section 139(5): Revised Income Tax Return
This sub-section is applicable when a taxpayer makes a mistake while filing initial tax returns. Take a look:
Suppose an entity or an assessee files their original income according to Section 139(1) or Section 139(4). In that case, they can file revised ITR for correcting or omitting any errors anytime before three months prior to the end of the assessment year or before the completion of assessment.
ITRs with intentional mistakes during filing ITR do not qualify for revision.
10. Section 139(9): Defective Income Tax Returns
If an assessee has filed a defective return he or she can correct the same within 15 days of getting notified. However, a taxpayer can extend this limit of rectifying the same under specified conditions by forwarding a request.
How to Correct Defective IT Returns Under Section 139(9)?
If you have filed a defective IT return, you will get a notice from the income tax department. Take a look at the following stepwise guide to correct a defective income tax return under Section 13(9) of the Income Tax Act:
Step 1: Individuals need to log in with their credentials to the official website of the Income Tax Department.
Step 2: Choose the 'E-file' tab. If any notice related to defective returns is issued, it will be displayed. Click on ‘Response to Notice u/s 139(9)’
Step 3: Enter details like acknowledgement number, CPC reference number, date of notice, etc.
Step 4: Choose an appropriate ITR form, upload an XML file and submit. Once completed, a message will appear.
Step 5: Select 'Yes' or 'No' from the column available as 'Do you agree with the defect?' as per the requirement.
Step 6: To view the response submitted, click on ‘View’.
What Are the Error Codes Under Section 139?
Go through the following error codes that a taxpayer will receive for defective tax returns under Section 139 of the Income Tax Act:
Error Code 8
If an individual files ITR-4S when the total presumptive earning under Section 44AD is below 8% of gross receipts, then it is a defective return.
Error Code 14
When taxpayers furnish a negative Net Profit or Gross Profit section, it is a defective tax return.
Error Code 31
If an assessee makes an income under 'Profits and Gains of Businesses and Profession' and has not provided a Profit and Loss Account and Balance Sheet, it is a defective tax return.
Error Code 38
It applies to the tax that is payable as stated in the ITR but is not paid.
What Are the Due Dates to File ITR Under Section 139?
Section 139 prescribes the following due dates within which taxpayers need to file their ITR:
- 31st July
This is valid for all the following taxpayers who do not need to perform an audit on their accounting books such as:
Salaried employee
Self-employed professional
Consultant or freelancer
- 31st October
This due date is valid for all following taxpayers and entities who need to perform an audit of their earnings:
Business entities, consultant or self-employed professionals who are liable for tax audit. This also includes working partner in an entity liable for tax audit.
With this, the article about Section 139 of the Income Tax Act comes to an end. Knowing about this Section's provisions will help taxpayers file ITR even after the expiry of the due date and remain tax compliant.
FAQs About Section 139 of Income Tax Act
Are the due dates of filing ITR under Section 139 of the Income Tax Act extended?
Yes, the Government can extend the due dates under Section 139 of the Income Tax Act. For instance, 31st July can be extended up to 31st August. The Government can, at its discretion, extend 31st September as well.