Income Tax return for FY 2021-22 were announced, however till date only ITR 1 to 5 and 7 were available for filing. Now ITR 6 is also available for filing on e filing website.
So, let’s have a look on what are some important amendments in ITR 6 and who are eligible to file the same.
First of all ITR 6 is the only income tax return available for all the companies except those eligible for ITR 7. [If you need assistance of Chartered Accountant in filing your Income tax return you can get the same by clicking on the link at the end of the post]
Let’s first see who are eligible to file ITR 6 Form:
This Return Form can be used by a company as per section 2(17) of the Income Tax Act. This form is filed by company other than a company which is required to file return in Form ITR‐7.
As per section 2(17) of Income Tax Act, company means: ‐
(i) Indian Company (Domestic Company)
(ii) Body corporate incorporated by or under the laws of country outside India
(iii) Any institution, association or body, whether incorporated or not & whether Indian or Non‐Indian which is declared by general or special order of the board to be company, etc.
Manner of filing this Return Form
This Return Form can be filed with the Income‐tax Department electronically on the e‐filing web portal of Income‐tax Department and verified by way of digital signature only.
Do note that companies need to compulsorily file their Income Tax return every year irrespective of whether they have earned any income or done any business or not.
Key changes in ITR 6 as compared to ITR for AY 2021-22:
1. Change in Schedule FA:
[ITR 6]
Schedule FA deals with disclosure of foreign assets by a person who is a ordinary resident in India. Till now while declaring foreign assets in this schedule assessee was free to declare foreign assets held by him as on end of relevant accounting period of foreign jurisdiction.
Now no separate accounting periods shall be followed, CBDT had mandated all the taxpayers to report the foreign assets held by them as on 31st December. Thus, while filing Income Tax return for AY 2022-23, assessee has to disclose foreign assets held between 01.01.2021 to 31.12.2021.
2. Declaration of Significant Economic Presence (SEP) by non-resident:
[ITR 6]
Concept of SEP was introduced by Finance Act, 2020 and made applicable form AY 2022-23 and since this will be the first year of application of the provision, assessee need to file declaration of same while filing return of income.
To read more about concept of SEP CLICK HERE: Threshold limit prescribed by CBDT for determining “Significant Economic presence” of a business in India | Now many online portals will be taxed in India | Digital tax – Taxontips
3. Disclosure for alternative tax regime opted under Section 115BA/115BAA/115BAB
[ITR 6]
The following new disclosures have been added in ITR 6 in respect of the companies who have opted for new lower tax regime of Section 115BA/115BAA/115BAB:
(a) Where the domestic company has opted for the alternative tax regime, it has to furnish the AY in which said option is exercised for the first time and the date of filing of the relevant form (10-IB/ 10-IC/ 10-ID) with acknowledgement number;
(b) Where the domestic company is choosing to opt for alternative tax regime this year, it has to furnish the date of filing of the relevant form (10-IB/ 10-IC/ 10-ID) with acknowledgement number.
This was very much required for the companies considering the notices being issued in AY 2020-21 to companies who have forgot to file Form 10-IC but opted for new tax regime.
4. Additional information sought from the assessee opting for 10 crore turnover limit for getting books of accounts audited under section 44AB:
[ITR 6]
The audit under Section 44AB is mandatory if the total sales, turnover or gross receipt from the business during the previous year exceeds Rs. 1 crore. However, if the cash receipt and cash payment do not exceed 5%, the audit shall be mandatory if the turnover of the business assessee exceeds Rs. 10 crores during the financial year.
For the purpose of computing the limit of 5%, payment or receipt by cheque drawn on a bank or by a bank draft, which is not an account payee, shall be deemed to be the payment or receipt in cash only.
The old ITR Forms required the assessee to furnish the response regarding cash receipts and payments only, and it did not consider the receipt or payment through non-account payee cheque or DD.
The following additional disclosures are required regarding Audit Information:
(a) Whether total sales, turnover or gross receipt is between Rs. 1 crore and Rs. 10 crores. If not, is it below Rs. 1 crore or exceeds Rs. 10 crores?
(b) The new ITR forms require aggregation of receipts and payment in cash and non-account payee cheque or DD while computing the limit of 5% as mentioned above.
To read more about Tax Audit under Income Tax Act CLICK HERE: Who needs to get their Books of accounts audited under Income Tax Act | Tax audit under Income tax – Taxontips
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