CMA Intermediate · Direct and Indirect Taxation

Filing of Return of Income: formula sheet

Full chapter guide

Key formulas

Always file (regardless of income or loss): Company | Firm | University/college (s.45(3)(a)) | Business trust | Investment fund (s.224) | Resident (not NOR) with foreign assets/signing authority/beneficiary; Section 263(1)(b) names clauses (a)(i), (ii), (v), (vi), (vii) and (ix). Loss or nil income does not excuse filing.
Income test for a person other than company or firm: File if total income, before Chapter XVII-B, Schedule VIII (Sl. No. 1) and deductions under sections 82 to 88, > maximum amount not chargeable to income-tax; Clause (a)(iii). Test is on income before those deductions, not after.
Income test for a specified entity: File if total income before giving effect to section 11 > maximum amount not chargeable to income-tax; Clause (a)(iv). Specified entities are listed in section 263(9)(c).
Loss carry forward: Loss under 'Profits and gains of business or profession' or 'Capital gains' to be carried forward → file; Clause (a)(viii). Loss under other heads is not covered by this clause.
Foreign asset test: Resident other than NOR + at any time in tax year holds foreign asset / has signing authority / is beneficiary → file; Clause (a)(ix). Beneficiary case does not apply where the income from the asset is includible in the income of the person in item (A).
Exemption from filing: Central Government notification (s.263(3)); specified senior citizen with TDS under s.393(1) [Sl. No. 8(iii)] (s.263(8)(b)); Check the exact conditions before applying either relief.
Due date: Table Sl. No. 1: Where section 172 applies (assessee, partners of the firm or their spouses) → 30 November; Applies to the persons in the Table where section 172 applies. The due date falls in the financial year after the tax year.
Due date: Table Sl. No. 2: Company; assessee (other than a company) whose accounts must be audited under this Act or any other law; partner of such a firm or the spouse → 31 October; Applies where section 172 does not apply.
Due date: Table Sl. No. 3: Business or profession income, accounts not required to be audited; partner of a firm not required to be audited, or the spouse → 31 August; Applies where section 172 does not apply. This is a new, separate category from 1 April 2026.
Due date: Table Sl. No. 4: Any other assessee → 31 July; Typical case: a salaried individual with no business income.
Belated return (section 263(4)): Within 9 months from the end of the tax year, or before completion of assessment, whichever is earlier; Only for a person who did not file within the time in sub-section (1).
Revised return (section 263(5)): Within 12 months from the end of the tax year, or before completion of assessment, whichever is earlier; Needs an earlier return under sub-section (1) or (4), and an omission or wrong statement. It is subject to section 428(b).
Updated return (section 263(6)(a)): Within 48 months from the end of the financial year succeeding the tax year; Can be filed whether or not you filed an earlier return. It is barred in the cases listed in 263(6)(c) and (d).
Defective return (section 263(7)): Rectify within 15 days of intimation; else invalid; The Assessing Officer may allow a further period on application. A late fix before assessment may be condoned.
Rule-making power on returns: Section 533(2): rules may prescribe form, manner, electronic classes and verification; Cite section 533(2)(j), (r) and (s) when the question asks where the forms and verification procedure come from. Clause (j) covers classes required to file electronically, (r) the form and manner of furnishing, and (s) how a document is verified.
Company signatory: Managing director → any director (if MD absent, unable, or none) → authorised person (if no director in India) → liquidator (in liquidation); Write the order as laid down in the rules notified under the Act. Examiners test the fallback. Check the exact rule for the tax year.
Firm signatory: Managing partner → any partner who is not a minor; For an LLP, the designated partner is the usual signatory.
HUF signatory: Karta → any adult member (if karta absent or incapacitated); A minor member cannot sign.
Individual signatory: Himself → authorised person (if abroad, mentally incapacitated, or as rules permit); The authorised person must hold a valid power of attorney.
Form map: ITR-1: eligible resident individuals; ITR-2/3: individuals and HUFs; ITR-4: eligible resident individuals, HUFs and firms (other than LLPs) under presumptive taxation; ITR-5: firm, LLP, AOP, BOI; ITR-6: company; ITR-7: trusts and institutions; Eligibility limits change by year. Always check the instructions of the form notified for the tax year.
Faceless communication: Section 273(7): communications between the National Faceless Assessment Centre and the assessee are exclusively by electronic mode; The faceless assessment runs through the assessee's registered account on the designated portal (section 273(13)).
Fee for failing to file by the due date - section 428(a): Total income ≤ ₹5,00,000 → ₹1,000; otherwise → ₹5,000; Applies when a return required under section 263 is not furnished by the due date in section 263(1). Test total income, not gross receipts.
Fee for filing beyond nine months - section 428(b): Total income ≤ ₹5,00,000 → ₹1,000; otherwise → ₹5,000; A separate default. It applies only when the return under section 263(5) is furnished beyond nine months from the end of the relevant tax year.
Fee for failure to audit accounts - section 428(c): Delay up to one month → ₹75,000; thereafter → ₹1,50,000; Applies where accounts are not audited and the report is not furnished as required by section 63.
Fee for failure to furnish accountant's report - section 428(d): Delay up to one month → ₹50,000; thereafter → ₹1,00,000; Applies to the report required by section 172.
Payment before filing - section 266(1): Amount to pay before filing = (Tax on total income - amounts listed in section 266(2)) + interest + fee; The amounts in section 266(2) include tax already paid, tax deducted or collected at source, relief under section 157, foreign tax relief under sections 159 and 160, and the tax credits listed there. Interest and fee are paid in addition to the tax. The return must carry proof of payment of tax, interest and fee. Do not confuse this list with the list used for the interest base in section 266(4).
Order of adjustment of short payment - section 266(3): Payment adjusted first to fee, then to interest, then to tax; Any balance left is tax still unpaid.
Interest under section 423 (base) - section 266(4): Interest = Base tax × rate given in the question × period of delay; Base tax = tax on total income declared in the return - advance tax - TDS/TCS - listed reliefs and credits under section 266(4). The rate and the month-counting rule are not in the supplied law, so use those stated in the question.
Source of limits: Monetary limit = fixed by CBDT order, instruction or direction (not by the section itself); Limits can be different for different appellate forums and can be revised. Use the figure given in the question.
Basic filing rule: Tax effect ≤ limit fixed by Board → authority is not required to file appeal; Tax effect above the limit → appeal can be considered on merits. Check the Board's circular for exact wording on the boundary.
Tax effect (working): Tax effect = tax on the disputed income (including surcharge and cess), as defined in the Board's circular; Take only the disputed addition or disallowance. Do not use the whole assessed income. Treat interest as excluded unless the question says otherwise.
No precedent from non-filing: Appeal not filed due to limit ⇒ no acceptance of the issue for other years or assessees; The department keeps the freedom to appeal the same issue where the amount is above the limit.

Quick revision

A return of income reports income, deductions and tax for a tax year.
Always use the term tax year, not assessment year.
First ask: is the person obliged to file at all, and under which condition?
Due date depends on the type of person and the case: non-audit, audit and transfer pricing cases have different dates.
Learn the due dates from the Income-tax Act, 2025 text, not from notes written for the old Act, and never give one date for all cases.
Know the difference between an original, belated and revised return.
A revised return replaces an earlier return that had an omission or wrong statement.
The return must be in the prescribed form and properly verified by the right person.
A defective return must be corrected within the time allowed, or it may be treated as invalid.
Late filing attracts a fee, and may also affect carry forward of certain losses.
Non-filing has further consequences, so link it to interest and losses in other chapters.
The chapter also covers filing of an appeal by an income-tax authority; read the provision in the Act's text and learn its conditions in plain words.

Common mistakes

Saying a company with a loss need not file Fix: Recall that clause (b) makes filing compulsory for companies and firms regardless of income or loss.
Applying the exemption limit after deductions Fix: Use total income before the deductions under sections 82 to 88 and before Chapter XVII-B and Schedule VIII (Sl. No. 1), as clause (a)(iii) states.
Using nine months for a revised return. Fix: Under section 263(5) as now in force, a revised return gets twelve months from the end of the tax year. Belated stays at nine months.
Treating all audit cases and all non-audit cases alike. Fix: The Table now has a 31 August due date for business or profession income where accounts are not audited, and for partners of such firms or their spouses.
Choosing ITR-1 for an individual with business income or for a HUF Fix: ITR-1 is only for eligible resident individuals, so a HUF cannot use it. Business income needs ITR-3, or ITR-4 for eligible resident individuals, HUFs and firms (other than LLPs) opting for presumptive taxation. Always check the form instructions.
Allowing any director to sign a company return in every case Fix: Write the managing director first, then any director only when the MD is absent, unable or does not exist.
Applying the ₹5,000 fee because gross turnover is high. Fix: Use total income. Up to ₹5,00,000 the fee is ₹1,000.
Ignoring the month-counting rule stated in the question when computing interest. Fix: If the question says interest runs per month or part of a month, round every part-month up. For example, 2 months 10 days counts as 3 months.
Writing that section 373 gives the department a right of appeal Fix: Say the section lets the Board regulate filing by fixing monetary limits. The right of appeal comes from the other appeal provisions.
Stating a rupee limit as part of the section Fix: Say the limit is fixed by the Board and can change. In numericals, use only the limit given in the question.

Exam tips

In MCQs, look for the words 'regardless of income or loss'. They point to companies, firms and the other clause (b) persons.
Always state the clause number, such as section 263(1)(a)(ix), to earn step marks.
Use the 2025 Act's terms: tax year, never assessment year.
If a question gives gross income and deductions, apply the exemption-limit test to income before the section 82 to 88 deductions.
Do not quote the exemption limit unless the question supplies it.
Write the section number with each time limit: 263(4) belated, 263(5) revised, 263(6) updated.
In date questions, first fix the due date by category. Many marks are lost by picking the wrong category.
Always state both limbs for belated and revised: the time limit and 'before completion of assessment, whichever is earlier'.