All NPOs registered under section 332 whose total income (before claiming exemptions under Part B of Chapter XVII) exceeds the basic exemption limit in any tax year are required to file their return of income.
For this purpose, the income must be computed without considering the exemptions available under Sections 342 to 345 of the Income Tax Act. In other words, the organisation must first assess whether its gross income, without applying the benefits of exemption, exceeds the threshold limit. If so, filing of return becomes mandatory.
The return has to be filed in a manner specified under 263(1)(a)(iii) and (2), following the procedure laid down for electronic filing.
The Income Tax Return is to be filed in form ITR -7, duly verified in the prescribed manner and containing all necessary particulars as specified under the Income Tax Act. The return must be filed electronically, either with a digital signature or through an Electronic Verification Code (EVC), by the representative assessee, within the time limits specified under Section 263(1)(c).
If the total income of the trust or institution, before claiming exemption under Part B of Chapter XVII as mentioned under section 349, exceeds the basic exemption limit the accounts are required to be audited. In such cases, the due date for filing the return is 31st October of the relevant assessment year (unless revised by Income Tax Department))
If an organisation fails to file its return of income within the prescribed due date, it may still file a belated return. This return can be submitted at any time up to 31st December of the relevant Tax year, or before the completion of the assessment, whichever is earlier.
Similarly, if an organisation has already filed its return but later identifies any omission or error in the return, it may file a revised return (subject to the penalty provisions). The revised return must also be submitted on or before 31st March of the relevant Tax year, or before the assessment is completed, whichever occurs first.
As per provisions under Section 263(6)(a), any assessee may furnish an updated return of his income or the income of any other person in respect of which he is assessable under this Act, at any time within forty-eight months from the end of the financial year succeeding the relevant tax year. The Updated Return can be filed in the following cases:
The objective of the provision is to enhance compliance, reduce litigation, and give taxpayers a chance to come forward voluntarily before being caught. 263(6)(a) applies to “any person” which includes;
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The updated return shall be furnished in the prescribed form (Form ITR-UN) and manner and shall be accompanied by payment of additional tax, as specified under Section 267. However, the exemption u/s 342 will not be available while filing the updated return.
