CMA Final · Direct Tax Laws and International Taxation

Return of Income: CMA Final Paper 15 Chapter Guide

Return of income is the statement of income a person files for a tax year under section 263 of the Income-tax Act, 2025. To solve questions, first decide whether filing is compulsory, then fix the due date, then check whether a belated, revised, updated or loss return applies.

What this chapter covers

This chapter covers the filing side of the tax process. It tells you who must file a return, by when, and what you can do if you miss the date or find a mistake. All of it sits in section 263 of the Income-tax Act, 2025, so you are studying one long section with many sub-sections.

The chapter has six parts: compulsory filing, due dates, belated and revised returns, defective and updated returns, verification and mode of filing, and return of loss. Most questions are small fact-based problems. You get a person and a situation, and you must name the correct return type, deadline or consequence.

It connects to the rest of Paper 15 in a clear way. Computation of total income gives you the figures that go into the return. Carry forward of losses depends on filing a return of loss on time. Later chapters on assessment, penalties and interest use the return as the starting point. If you know this chapter well, those chapters become easier.

Note that section 263 was amended with effect from 1 April 2026. Revised return time, the due date table and updated return rules all changed. Use the current text, not older notes.

This chapter is short, rule-based and easy to score if you know the exact conditions. Dates, time limits and eligibility lists are ideal for Section A MCQs, and a small case on filing consequences can appear in the written section. Students lose marks here by mixing old and new time limits, so precise learning pays off directly. It also supports loss carry forward and assessment questions elsewhere in the paper.

Return of Income: topics in the order to study them

1Compulsory Filing of Return of IncomeStart here because every other rule applies only once you know who must file and who must file regardless of income.
2Due Dates for Furnishing ReturnOnce you know who files, learn the 30 November, 31 October, 31 August and 31 July dates and the conditions behind each.
3Belated and Revised ReturnThese follow naturally: they deal with missing the due date or correcting an error, and depend on the due date and tax year end.
4Return of Loss and Carry ForwardLearn this next, because it links the filing date to the right to carry forward business and capital losses and to the updated return exception.
5Defective Return and Updated ReturnTake these after belated and revised returns, since the updated return has many exclusions that are easier once you know the other return types.
6Verification, Signing and Mode of FilingFinish with the procedural part, which is lighter and best revised with the whole section in mind.

How to prepare Return of Income

Treat this chapter as one section to be learned as a time-line plus a list of conditions. Build it in layers and test yourself on small cases.

Read section 263 once in full, with the 2026 amendments, so you see how the sub-sections fit together.
Make a one-page list of persons who must file, and mark the ones who must file regardless of income: companies, firms, universities and colleges, business trusts, investment funds and certain residents with foreign assets.
Learn the due date table as a grid of person, condition and date. Practise by giving yourself five different assessees and naming the date for each.
Draw a time-line from the end of the tax year showing the belated return limit of nine months, the revised return limit of twelve months and the updated return limit of forty-eight months from the end of the following financial year.
Write out the list of situations where an updated return is not allowed, then test each against a short case.
Solve past MCQs and short cases on loss returns, and write the exact condition for carry forward in your own words.
Revise the defective return steps: intimation, fifteen days to rectify, invalid return, and condonation before assessment.

Common mistakes in Return of Income

Using the old nine-month time limit for a revised return.
Fix: Remember twelve months from the end of the tax year or before assessment, whichever is earlier, under section 263(5).
Treating all audit cases as having the 31 October due date.
Fix: Check the person and condition: companies, audited non-company assessees and partners of audited firms get 31 October, unless section 172 applies, which gives 30 November.
Assuming a person with income below the exemption limit never needs to file.
Fix: Check the other triggers first: loss carry forward, foreign assets or foreign signing authority for a resident other than a not ordinarily resident, and entities who file regardless of income.
Allowing an updated return to show a loss or a lower tax.
Fix: Remember it is for additional tax. It cannot reduce liability, create or increase a refund, or be a loss return except in the stated cases.
Forgetting that a return of loss must be filed by the due date.
Fix: Link carry forward of business and capital loss to timely filing, and state this link in your answer.
Not mentioning the consequence of an unrectified defect.
Fix: Complete the chain: invalid return, treated as if no return was filed, with condonation possible before assessment.

Last-day revision: Return of Income

Section 263 of the Income-tax Act, 2025 governs return of income.
Companies and firms must file a return regardless of income or loss.
Others, such as individuals, file if total income exceeds the maximum amount not chargeable to tax, computed before specified deductions.
A person with a business or capital gains loss to carry forward must file a return.
Due dates: 30 November where section 172 applies. Where section 172 does not apply: 31 October for companies, assessees whose accounts are required to be audited and partners of audited firms (and their spouses, if section 10 applies); 31 August for assessees with business or profession income whose accounts are not audited and partners of non-audited firms (and their spouses); 31 July for any other assessee.
Belated return: within nine months from the end of the tax year or before assessment, whichever is earlier.
Revised return: within twelve months from the end of the tax year or before assessment, whichever is earlier.
Updated return: within forty-eight months from the end of the financial year following the tax year.
An updated return cannot be a return of loss, reduce tax liability or increase a refund, with listed exceptions.
A defective return gets fifteen days to rectify; if not, it is invalid, but the officer may condone delay before assessment.
Section 263 does not apply to a specified senior citizen (section 402(39)) for a tax year in which tax has been deducted under section 393(1) [Table Sl. No. 8(iii)].
Return of loss must be filed by the due date to carry forward the loss.

Return of Income practice questions

Return of Income in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Return of Income: frequently asked questions

Which section of the Income-tax Act, 2025 deals with return of income?

Section 263 deals with return of income. It covers who must file, due dates, belated, revised and updated returns, and defective returns. Learn it as a whole.

What is the time limit for a revised return now?

A revised return can be furnished within twelve months from the end of the relevant tax year or before the completion of assessment, whichever is earlier. This applies from 1 April 2026.

Can I file an updated return to claim a refund?

No. An updated return cannot result in a refund where none was due or increase the refund due. It also cannot reduce the total tax liability. It is meant for reporting additional income and tax.

How do I learn the due dates easily?

Use the table of person, condition and date. Group them as 30 November, 31 October, 31 August and 31 July, and practise with short cases until you can place each assessee quickly.