Section 139 of the Income Tax Act, 1961

Section 139 of the Income Tax Act, 1961. The Income Tax Department of India categorizes the income of its citizens into five primary sources: salary, house property, business, capital gains, and other sources. Every individual whose income falls within the taxable bracket is obligated to pay income tax to the government and file their Income Tax Returns (ITR) by a specified deadline. Section 139 of the Income Tax Act, 1961, along with its various subsections, outlines the norms and regulations for different types of returns, ensuring tax compliance. This guide delves into the intricacies of Section 139, providing detailed insights into its provisions, due dates, and common error codes.
What is Section 139 of the Income Tax Act?
At its core, Section 139 mandates taxpayers to file their Income Tax Returns within the stipulated time frame. It also provides crucial provisions for addressing instances of late filing through "belated returns" and correcting errors in previously filed returns via "revised returns." These mechanisms are essential for maintaining adherence to India's tax regulations. The various subsections under Section 139 serve to clarify who must file returns, the applicable due dates, conditions for belated or revised filings, and when filing an ITR becomes mandatory.
Subsections of Section 139 of Income Tax Act 1961
Section 139 is a comprehensive section encompassing several subsections, each addressing specific aspects of income tax return filing.
Section 139(1) of Income Tax Act - Mandatory and Voluntary Returns
Section 139(1) defines the mandatory requirements for filing Income Tax Returns. The following entities are obligated to furnish their tax returns:

Individuals: Any person whose total income exceeds the basic exemption limit must file their income tax return by the prescribed due date.

Companies: All private, public, domestic, or foreign entities located in India or conducting business in India are required to file their tax returns.

Firms: This includes Limited Liability Partnerships (LLPs) and Unlimited Liability Partnerships (ULPs).

Residents with Foreign Assets/Accounts: Indian residents who hold assets outside India or possess signing authority over an account based outside India are mandated to file.

Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Body of Individuals (BOIs): These entities must file an Income Tax Return if their income surpasses the prescribed exemption limit.

Under Section 139(1c), specific classes of individuals who meet certain conditions may be exempted from filing tax returns. Such exemptions require a notice to be placed before each House of Parliament for 30 days during immediate sessions following the notification. The exemption becomes effective only upon agreement by both houses.
Voluntary Returns: Even if an individual's income falls below the mandatory filing threshold, they can still choose to file an income tax return. Such returns are termed "voluntary returns" and are considered valid for all tax purposes.
Section 139(3) - Return of Loss
Section 139(3) addresses the filing of income tax returns in situations where a loss has been incurred. Filing a loss return is often beneficial as it allows the loss to be carried forward, potentially reducing future tax liabilities. Specific cases are defined:

Individual Taxpayers: For individual taxpayers, filing a return is generally not mandatory if a loss was incurred in the previous financial year.

Companies and Firms: For companies and firms, filing a tax return for a loss is mandatory.

Losses under "Profits and Gains of Business and Profession" or "Capital Gains" (for companies): If a company incurs a loss under these heads and wishes to carry forward this loss to offset against future income, filing the tax return by the due date is mandatory. Otherwise, the option to carry forward the loss is forfeited.

Losses from "House or Residential Property": Losses incurred under this head can be carried forward even if the tax return is filed beyond the specified due date.

Other Losses (excluding "House and Property"): If other losses are filed under Section 142(1) beyond the due date, they generally cannot be carried forward, with the exception of unabsorbed depreciation.

Offsetting Loss in the Same Year: If a loss is to be offset against income from another category in the same year, this offset is permitted even if the return is filed after the due date.

Carrying Forward Previous Year Losses: Losses incurred in previous years can only be carried forward if the return for those years was filed by the due dates and the losses were duly assessed.

Section 139(4) - Belated Income Tax Return
While it is always advisable for taxpayers to file their tax returns by the due date stipulated under Section 139(1), Section 139(4) provides a provision for filing a "belated return" if the original deadline is missed. A belated return for prior years can be filed until the expiry date of the current applicable assessment year or before the financial year concludes, whichever is earlier. However, failing to file within this extended period attracts a penalty of 5,000 rupees under Section 271F of the IT Act, 1961. This penalty can be waived if the income did not necessitate mandatory filing as per Section 139(1) and the return was filed after the due date.
Section 139(5) - Revised Income Tax Return
If a taxpayer who has already filed a return under Section 139(1) (original return) or Section 139(4) (belated return) subsequently discovers any omission or error, they have the option to submit a "revised return." This revised return can be filed before the end of the relevant assessment year or before the assessment is completed, whichever occurs earlier. The revised return effectively replaces the original return from the date the original return was filed. It is important to note that if a loss return was filed belatedly under Section 139(4), it can be revised under Section 139(5), but the loss cannot be carried forward since the initial return was filed late.
Section 139(4a) - Charitable Trusts
Charitable trusts and institutions are subject to specific filing requirements. If such entities receive income from property held in trust (or under another legal obligation) for charitable or religious purposes, or voluntary contributions, and their total income (before considering exemptions under Sections 11 and 12) exceeds the tax-free limit, they must file an income tax return. This return must be furnished in Form No. ITR-7, verified in the prescribed manner, and include all necessary particulars. The representative assessee is responsible for submitting this return electronically (either under digital signature or otherwise) within the time prescribed under Section 139(1). In essence, individuals or entities wishing to claim exemptions under Sections 11 and 12 are mandatorily required to file an ITR if their income surpasses the basic exemption threshold.
Section 139(4b) - Political Parties
The chief executive officer (irrespective of their designation) of every political party is required to file a return of income for the previous year. This mandate applies if the party's total income, calculated under the Income Tax Act without considering the provisions of Section 13A (which deals with income of political parties), exceeds the maximum amount not chargeable to income tax. The return must be submitted in the prescribed form, verified as required, and include all necessary details. All provisions of the Income Tax Act applicable to a return filed under sub-section (1) will similarly apply to this return.
Section 139(4c) and 139(4d) - Income Tax Return for Entities Claiming Exemption under Section 10
Sections 139(4C) and 139(4D) address the tax return filing requirements for certain institutions that are eligible to claim benefits under Section 10 of the Income Tax Act, 1961.

Section 139(4C): This subsection mandates that certain institutions must file a tax return if their maximum allowable income limit (excluding other exemption benefits enjoyed by the institution) is exceeded. These institutions primarily include:

Associations engaged in scientific research.

Institutions or associations falling under Section 10(23A).

News agencies.

Institutions under Section 10(23B).

Educational and Medical Institutions, Universities, and Hospitals.

Section 139(4D): This provision pertains to universities, colleges, and other institutions that are not explicitly required to file tax returns of income and loss under any other provision of Section 139. Specifically, it applies to institutions referred to in Section 35(1)(ii) and Section 35(1)(iii). If an institution falls into this category, it must furnish its return of income or loss for every previous year, similar to other taxpayers. However, if their income is unconditionally exempt under various clauses of Section 10, they can utilize the relevant ITR form for their filing.

Section 139(9) - Defective Returns
A tax return can be considered "defective" under Section 139(9) if crucial documents or information are missing. The tax department makes the determination of a defective return and duly notifies the taxpayer via a letter. The taxpayer is generally given a fifteen-day period to rectify the problem and produce the missing documents. This period may be extended upon the taxpayer's request, provided valid reasons are furnished. To avoid a defective return, taxpayers must ensure they include the following:

A statement displaying the computation of payable taxes.

The filed tax return in the required form.

Proofs for all claims of taxes paid.

A report of the auditing done under Section 44AB (if applicable), furnished before filing the return.

Copies of the audit report, balance sheet, and auditor's profit and loss accounts if the taxpayer's account is audited.

The relevant report in the case of a Cost Audit (if applicable).

If the taxpayer does not maintain books of accounts, a statement indicating gross receipts, turnover amount, bank balance, stocks, cash, debtors or creditors information, expenses, and net profit, etc., is required.

If the taxpayer maintains books of accounts, mandatory copies of:

All accounts of Profit and Loss, Manufacturing accounts, Trading accounts, Balance sheets, and accounts of all income and expenses.

Personal accounts of partners in the case of partnership firms.

For AOP/BOI, all members should produce their personal accounts.

The proprietor’s personal account.

Due Dates for Section 139
Section 139 prescribes different due dates for filing income tax returns, depending on the taxpayer's category and whether an audit is required:

July 31st: This deadline applies to individuals and entities that are not required to undergo a specific audit report to validate their accounts. This category mainly includes salaried employees, self-employed professionals, freelancers, or consultants who do not fall under audit requirements.

September 30th: This deadline is applicable to entities that are mandatorily required to have their account books audited. This includes business entities, self-employed professionals, and working partners employed with a firm or consultants whose accounting books are subject to audit.

Error Codes in Section 139 of Income Tax Act
During the filing process, taxpayers might encounter specific error codes indicating issues with their return. Some common error codes under Section 139 include:

Error Code 14: This occurs when the assessee enters a negative amount in the gross profits or net profits section of the ITR section 139(1).

Error Code 8: This arises when the assessee files ITR-4S, even if the total presumptive income under Section 44AD is less than 8% of the Gross turnover.

Error Code 31: This indicates that the taxpayer has income from the head 'profits and gains from business/profession' but has not filed a profit and loss statement.

Error Code 38: This error signifies that tax has been determined as payable in the ITR section 139(1) but has not been paid.

Conclusion
Navigating the complexities of income tax filing can be challenging. However, Section 139 of the Income Tax Act provides a clear framework for taxpayers to fulfill their obligations, addressing various scenarios from mandatory filings to rectifying errors and managing losses. While Section 139 allows for modifications and revised returns in case of mistakes, it is always best to avoid errors in the first place. Services like CA-assisted ITR filing can significantly streamline the process, ensuring accuracy and compliance. Leveraging online CA services and consultations can help taxpayers file their income tax returns accurately and efficiently, minimizing the hassle and potential penalties associated with incorrect or belated filings.
Frequently Asked Questions (FAQs)
Q1. Who is required to file an income tax return under Section 139(1)?
Ans. Under Section 139(1), individuals, companies, firms, HUFs, AOPs, BOIs, and residents with foreign assets/accounts must file a tax return if their total income exceeds the basic exemption limit. Voluntary filing is also allowed even if income is below the threshold.
Q2. What is the difference between a belated return and a revised return under Section 139?
Ans. A belated return under Section 139(4) is filed after the due date, while a revised return under Section 139(5) corrects errors or omissions in the original or belated return. However, losses reported in a belated return cannot be carried forward.
Q3. Can a taxpayer file a return of loss under Section 139(3)?
Ans. Yes. Filing a return of loss is important for carrying forward losses to offset future income. However, returns must be filed by the due date to carry forward most types of losses, except certain house property losses.
Q4. What happens if a return is deemed defective under Section 139(9)?
Ans. The taxpayer is notified and given 15 days (or an extended period) to correct the defects. Failure to do so may result in the return being considered invalid, which could lead to penalties and disallowance of claimed deductions.
Q5. What are the due dates for filing returns under Section 139?
Ans.

July 31: For individuals and non-audit entities.

September 30: For entities requiring an audit of their accounts. Missing these deadlines may result in late filing penalties and interest.

The Income Tax Department of India categorizes the income of its citizens into five primary sources: salary, house property, business, capital gains, and other sources. Every individual whose income falls within the taxable bracket is obligated to pay income tax to the government and file their Income Tax Returns (ITR) by a specified deadline. Section 139 of the Income Tax Act, 1961, along with its various subsections, outlines the norms and regulations for different types of returns, ensuring tax compliance. This guide delves into the intricacies of Section 139, providing detailed insights into its provisions, due dates, and common error codes.

What is Section 139 of the Income Tax Act?

At its core, Section 139 mandates taxpayers to file their Income Tax Returns within the stipulated time frame. It also provides crucial provisions for addressing instances of late filing through "belated returns" and correcting errors in previously filed returns via "revised returns." These mechanisms are essential for maintaining adherence to India's tax regulations. The various subsections under Section 139 serve to clarify who must file returns, the applicable due dates, conditions for belated or revised filings, and when filing an ITR becomes mandatory.

Subsections of Section 139 of Income Tax Act 1961

Section 139 is a comprehensive section encompassing several subsections, each addressing specific aspects of income tax return filing.

Section 139(1) of Income Tax Act - Mandatory and Voluntary Returns

Section 139(1) defines the mandatory requirements for filing Income Tax Returns. The following entities are obligated to furnish their tax returns:

Individuals: Any person whose total income exceeds the basic exemption limit must file their income tax return by the prescribed due date.
Companies: All private, public, domestic, or foreign entities located in India or conducting business in India are required to file their tax returns.
Firms: This includes Limited Liability Partnerships (LLPs) and Unlimited Liability Partnerships (ULPs).
Residents with Foreign Assets/Accounts: Indian residents who hold assets outside India or possess signing authority over an account based outside India are mandated to file.
Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Body of Individuals (BOIs): These entities must file an Income Tax Return if their income surpasses the prescribed exemption limit.

Voluntary Returns: Even if an individual's income falls below the mandatory filing threshold, they can still choose to file an income tax return. Such returns are termed "voluntary returns" and are considered valid for all tax purposes.

Section 139(3) - Return of Loss

Section 139(3) addresses the filing of income tax returns in situations where a loss has been incurred. Filing a loss return is often beneficial as it allows the loss to be carried forward, potentially reducing future tax liabilities. Specific cases are defined:

Individual Taxpayers: For individual taxpayers, filing a return is generally not mandatory if a loss was incurred in the previous financial year.
Companies and Firms: For companies and firms, filing a tax return for a loss is mandatory.
Losses under "Profits and Gains of Business and Profession" or "Capital Gains" (for companies): If a company incurs a loss under these heads and wishes to carry forward this loss to offset against future income, filing the tax return by the due date is mandatory. Otherwise, the option to carry forward the loss is forfeited.
Losses from "House or Residential Property": Losses incurred under this head can be carried forward even if the tax return is filed beyond the specified due date.
Other Losses (excluding "House and Property"): If other losses are filed under Section 142(1) beyond the due date, they generally cannot be carried forward, with the exception of unabsorbed depreciation.
Offsetting Loss in the Same Year: If a loss is to be offset against income from another category in the same year, this offset is permitted even if the return is filed after the due date.
Carrying Forward Previous Year Losses: Losses incurred in previous years can only be carried forward if the return for those years was filed by the due dates and the losses were duly assessed.

Section 139(4) - Belated Income Tax Return

While it is always advisable for taxpayers to file their tax returns by the due date stipulated under Section 139(1), Section 139(4) provides a provision for filing a "belated return" if the original deadline is missed. A belated return for prior years can be filed until the expiry date of the current applicable assessment year or before the financial year concludes, whichever is earlier. However, failing to file within this extended period attracts a penalty of 5,000 rupees under Section 271F of the IT Act, 1961. This penalty can be waived if the income did not necessitate mandatory filing as per Section 139(1) and the return was filed after the due date.

Section 139(5) - Revised Income Tax Return

If a taxpayer who has already filed a return under Section 139(1) (original return) or Section 139(4) (belated return) subsequently discovers any omission or error, they have the option to submit a "revised return." This revised return can be filed before the end of the relevant assessment year or before the assessment is completed, whichever occurs earlier. The revised return effectively replaces the original return from the date the original return was filed. It is important to note that if a loss return was filed belatedly under Section 139(4), it can be revised under Section 139(5), but the loss cannot be carried forward since the initial return was filed late.

Section 139(4a) - Charitable Trusts

Charitable trusts and institutions are subject to specific filing requirements. If such entities receive income from property held in trust (or under another legal obligation) for charitable or religious purposes, or voluntary contributions, and their total income (before considering exemptions under Sections 11 and 12) exceeds the tax-free limit, they must file an income tax return. This return must be furnished in Form No. ITR-7, verified in the prescribed manner, and include all necessary particulars. The representative assessee is responsible for submitting this return electronically (either under digital signature or otherwise) within the time prescribed under Section 139(1). In essence, individuals or entities wishing to claim exemptions under Sections 11 and 12 are mandatorily required to file an ITR if their income surpasses the basic exemption threshold.

Section 139(4b) - Political Parties

The chief executive officer (irrespective of their designation) of every political party is required to file a return of income for the previous year. This mandate applies if the party's total income, calculated under the Income Tax Act without considering the provisions of Section 13A (which deals with income of political parties), exceeds the maximum amount not chargeable to income tax. The return must be submitted in the prescribed form, verified as required, and include all necessary details. All provisions of the Income Tax Act applicable to a return filed under sub-section (1) will similarly apply to this return.

Section 139(4c) and 139(4d) - Income Tax Return for Entities Claiming Exemption under Section 10

Sections 139(4C) and 139(4D) address the tax return filing requirements for certain institutions that are eligible to claim benefits under Section 10 of the Income Tax Act, 1961.

Section 139(4C): This subsection mandates that certain institutions must file a tax return if their maximum allowable income limit (excluding other exemption benefits enjoyed by the institution) is exceeded. These institutions primarily include:

Associations engaged in scientific research.
Institutions or associations falling under Section 10(23A).
News agencies.
Institutions under Section 10(23B).
Educational and Medical Institutions, Universities, and Hospitals.

Section 139(4D): This provision pertains to universities, colleges, and other institutions that are not explicitly required to file tax returns of income and loss under any other provision of Section 139. Specifically, it applies to institutions referred to in Section 35(1)(ii) and Section 35(1)(iii). If an institution falls into this category, it must furnish its return of income or loss for every previous year, similar to other taxpayers. However, if their income is unconditionally exempt under various clauses of Section 10, they can utilize the relevant ITR form for their filing.

Section 139(9) - Defective Returns

A tax return can be considered "defective" under Section 139(9) if crucial documents or information are missing. The tax department makes the determination of a defective return and duly notifies the taxpayer via a letter. The taxpayer is generally given a fifteen-day period to rectify the problem and produce the missing documents. This period may be extended upon the taxpayer's request, provided valid reasons are furnished. To avoid a defective return, taxpayers must ensure they include the following:

A statement displaying the computation of payable taxes.
The filed tax return in the required form.
Proofs for all claims of taxes paid.
A report of the auditing done under Section 44AB (if applicable), furnished before filing the return.
Copies of the audit report, balance sheet, and auditor's profit and loss accounts if the taxpayer's account is audited.
The relevant report in the case of a Cost Audit (if applicable).
If the taxpayer does not maintain books of accounts, a statement indicating gross receipts, turnover amount, bank balance, stocks, cash, debtors or creditors information, expenses, and net profit, etc., is required.
If the taxpayer maintains books of accounts, mandatory copies of:

All accounts of Profit and Loss, Manufacturing accounts, Trading accounts, Balance sheets, and accounts of all income and expenses.
Personal accounts of partners in the case of partnership firms.
For AOP/BOI, all members should produce their personal accounts.
The proprietor’s personal account.

Due Dates for Section 139

Section 139 prescribes different due dates for filing income tax returns, depending on the taxpayer's category and whether an audit is required:

July 31st: This deadline applies to individuals and entities that are not required to undergo a specific audit report to validate their accounts. This category mainly includes salaried employees, self-employed professionals, freelancers, or consultants who do not fall under audit requirements.
September 30th: This deadline is applicable to entities that are mandatorily required to have their account books audited. This includes business entities, self-employed professionals, and working partners employed with a firm or consultants whose accounting books are subject to audit.

Error Codes in Section 139 of Income Tax Act

During the filing process, taxpayers might encounter specific error codes indicating issues with their return. Some common error codes under Section 139 include:

Error Code 14: This occurs when the assessee enters a negative amount in the gross profits or net profits section of the ITR section 139(1).
Error Code 8: This arises when the assessee files ITR-4S, even if the total presumptive income under Section 44AD is less than 8% of the Gross turnover.
Error Code 31: This indicates that the taxpayer has income from the head 'profits and gains from business/profession' but has not filed a profit and loss statement.
Error Code 38: This error signifies that tax has been determined as payable in the ITR section 139(1) but has not been paid.

Conclusion

Navigating the complexities of income tax filing can be challenging. However, Section 139 of the Income Tax Act provides a clear framework for taxpayers to fulfill their obligations, addressing various scenarios from mandatory filings to rectifying errors and managing losses. While Section 139 allows for modifications and revised returns in case of mistakes, it is always best to avoid errors in the first place. Services like CA-assisted ITR filing can significantly streamline the process, ensuring accuracy and compliance. Leveraging online CA services and consultations can help taxpayers file their income tax returns accurately and efficiently, minimizing the hassle and potential penalties associated with incorrect or belated filings.

Frequently Asked Questions (FAQs)

Q1. Who is required to file an income tax return under Section 139(1)?

Ans. Under Section 139(1), individuals, companies, firms, HUFs, AOPs, BOIs, and residents with foreign assets/accounts must file a tax return if their total income exceeds the basic exemption limit. Voluntary filing is also allowed even if income is below the threshold.

Q2. What is the difference between a belated return and a revised return under Section 139?

Ans. A belated return under Section 139(4) is filed after the due date, while a revised return under Section 139(5) corrects errors or omissions in the original or belated return. However, losses reported in a belated return cannot be carried forward.

Q3. Can a taxpayer file a return of loss under Section 139(3)?

Ans. Yes. Filing a return of loss is important for carrying forward losses to offset future income. However, returns must be filed by the due date to carry forward most types of losses, except certain house property losses.

Q4. What happens if a return is deemed defective under Section 139(9)?

Ans. The taxpayer is notified and given 15 days (or an extended period) to correct the defects. Failure to do so may result in the return being considered invalid, which could lead to penalties and disallowance of claimed deductions.

Q5. What are the due dates for filing returns under Section 139?

Ans.

July 31: For individuals and non-audit entities.
September 30: For entities requiring an audit of their accounts. Missing these deadlines may result in late filing penalties and interest.