Section 139(1C) of the Income Tax Act, 1961 provides that Central Government may exempt any class of person from the requirement of furnishing a return of income. Central Government normally issues a Notification for this purpose in the Official Gazette. Central Government shall also prescribed the conditions to be fulfilled by assessee. Central Government can only exempt a class of person and not a specific person.

Classes of persons exempted from the requirement of furnishing a return of income [Section 139(1C)]

Sub-section (1C) was inserted in section 139 of the Income-Tax Act, 1961 by the Finance Act, 2011, with effect from 01.06.2011. For the sake of ready reference, the aforesaid sub-section (1C) is reproduced as follows:

Text of Section 139(1C)

(1C) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, exempt any class or classes of persons from the requirement of furnishing a return of income having regard to such conditions as may be specified in that notification.

Before the insertion of sub-section (1C) in section 139, under the provisions of section 139(1), every person if his total income during the previous year exceeded the maximum amount which was not chargeable to income-tax, was required to furnish a return of his income.

Procedure to be followed for issuing Notification

§   Notification issued under section 139(1C) shall be placed before both houses of Parliament (Lok Sabha & Rajya Sabha) in next session for 30 days.

§   Parliament may make modification to such notification.

§   If modification made, such notification shall apply in modified form.

CBDT notification exempting ITR-filing for non-residents pursuant to ‘Investment Fund’ definition amendment

CBDT, vide Notification No. 49/2023 dated 14.07.2023, amends Notification No. 55/2019 dated 26.07.2019 which exempts non-residents and foreign companies earning income from investment funds from filing ITR; Expands the scope of ‘investment fund’ to include any fund established or incorporated in India which is regulated under the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019; The definition of investment fund was earlier restricted to SEBI registered Category I or Category II Alternative Investment Fund

CBDT Notification No. 49/2023/F. No.225/79/2019-ITA-II), Dated 14.07.2023

S.O. 3147(E). - In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India, Ministry of Finance, (Department of Revenue), Number 55/2019, dated the 26th July, 2019, published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), vide number S.O. 2672(E), dated 26th July, 2019, namely:-

In the said notification, - Clause (a) of the Explanation to first para is substituted as under:

“Explanation:- For the purposes of this paragraph,-

a. “investment fund” means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or a Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulated under the International Financial Services Centres Authority (Fund Management) Regulations, 2022 made under the International Financial Services Centres Authority Act, 2019 (50 of 2019);”

2. This notification shall come into force with effect from the date of its publication in the Official Gazette.

Exemption to class of persons from the requirement of furnishing a return of income from assessment year 2021 2022 onwards [CBDT Notification No. 119/2021, Dated 11.10.2021]

CBDT Notification No. 119/2021, Dated: 11.10.2021

Subject : Section 139(1C) of the Income-tax Act, 1961 - return of income - exemption to specified class of persons from requirement of furnishing a return of income under section 139(1) from assessment year 2021-22 onwards

S.O. 4207(E). - In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as “said Act”), the Central Government, hereby exempts the following class of persons mentioned in column (2) of the Table below, subject to the conditions specified in column (3) of the said Table , from the requirement of furnishing a return of income under sub-section (1) of section 139 of the said Act from assessment year 2021-2022 onwards :-

TABLE

Explanation. –For the purposes of this Notification. –

(a) “eligible foreign investor” means a non-resident who operates in accordance with the Securities and Exchange Board of India, circular IMD/HO/FPIC/CIR/P/2017/003 dated 04th January, 2017;

(b) “International Financial Services Centre” shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

(c) “recognised stock exchange” shall have the meaning as assigned to it in clause (ii) of Explanation 1 to sub-section (5) of section 43 of the said Act.

3. The above exemption from the requirement of furnishing a return of income shall not be available to the class of persons mentioned in the column (2) of the said Table where a notice under sub-section (1) of section 142 or section 148 or section 153A or section 153C of the said Act has been issued for filing a return of income for the assessment year specified

4. This notification shall come into force from the date of its publication in the Official Gazette.

CBDT Notification No. S.O. 2672(E) [NO. 55/2019 (F. No. 225/79/2019-ITA.II], Dated 26.07.2019

Subject :   Section 139(1C) of the Income-tax Act, 1961 - Return of income - Exemption to specified class of persons from requirement of furnishing a return of income under section 139(1) for assessment year 2019-20

CBDT Notification No. S.O. 2672(E) [NO. 55/2019 (F. No. 225/79/2019-ITA.II], Dated 26.07.2019

In exercise of the powers conferred by sub-section (1C) of section139 of the Income-tax Act, 1961 (43 of 1961), the Central Government, hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section139 of the said Act from Assessment Year 2019-20 onwards, namely:—

Class of persons

1.  (i)  a non-resident, not being a company; or

(ii) a foreign company,

who have any income chargeable under the said Act during a previous-year from any investment in an investment fund set up in an International Financial Services Centre (IFSC) located in India.

Explanation: -  For the purposes of this paragraph.-

(a)   “investment fund” means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which has been granted a certificate of registration as a Category I or Category II Alternative Investment Fund and is regulated under the Securities and Exchange Board of India (Alternative Investment Fund) Regulations, 2012, made under the Securities and Exchange Board of India Act, 1992 (15 of 1992);

(b)   “International Financial Services Centre” shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).

Conditions

2. In case of class of persons referred to in para 1, -

(i)    any income-tax due on income of the said class of persons has been deducted at source and remitted to the Central Government by the investment fund at the tax-rate in force as per provisions of section 194LBB of the said Act; and

(ii)   there is no other income during the previous year for which the said class of persons, is otherwise liable to file the tax-return.

3. The exemption from the requirement of furnishing a return of income shall not be available to the said class of persons where a notice under sub-section (1) of section 142 or section 148 or section 153A or section 153C of the said Act has been issued for filing a return of income for the assessment year specified therein.

4. This notification shall come into force from the date of its publication in the Official Gazette.

CBDT Notification No. 9/2012 [F. NO.225/283/2011-ITA(II)], DATED 17-2-2012

Subject :  Section 139(1C) of the Income-tax Act, 1961 - Return of income - Exemption to specified persons from requirement of furnishing a return of income under section 139(1) for assessment year 2012-13

Notification No. 9/2012, Dated 17.02.2012

S.O........... (E). - In exercise of the powers conferred by sub-section (1C) of section139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section139 for the assessment year 2012-13, namely:-

1.Class of persons. -An individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head,-

(A)  “Salaries”;

(B)  “Income from other sources”, by way of interest from a saving account in a bank, not exceeding ten thousand rupees.

2. Conditions, - The individual referred to in para 1, -

(i)      has reported to his employer his Permanent Account Number (PAN);

(ii)     has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;

(iii)    has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

(iv)    has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

(v)     has no claim of refund of taxes due to him for the income of the assessment year, and

(vi)    has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date of its publication in the Official Gazette.

An Individual having income not exceeding Rs. 5 lacs from salaries/other sources for Assessment year 2011-12 is not required to file return under section 139(1) [Notification No. 36/2011 F. NO. 142/09/2011 (TPL), Dated 23.06.2011]

CBDT Notification No. 36/2011), Dated 23.06.2011

Subject : Section 139(1C) of the Income-tax Act, 1961 - Exemption to specified persons from requirement of furnishing a return of income under section 139(1) for assessment year 2011-12

In exercise of the powers conferred by sub-section (1C) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2011-12, namely: -

Class of Persons

1. An Individual whose total income for the relevant assessment year does not exceed five lakh rupees and consists of only income chargeable to income-tax under the following head, -

 (A)  “Salaries”;

 (B)  “Income from other sources”, by way of interest from a savings account in a bank, not exceeding ten thousand rupees.

Conditions

2. The individual referred to in para 1, -

  (i)  has reported to his employer his Permanent Account Number (PAN);

 (ii)  has reported to his employer, the incomes mentioned in sub-para (B) of para 1 and the employer has deducted the tax thereon;

(iii)  has received a certificate of tax deduction in Form 16 from his employer which mentions the PAN, details of income and the tax deducted at source and deposited to the credit of the Central Government;

(iv)  has discharged his total tax liability for the assessment year through tax deduction at source and its deposit by the employer to the Central Government;

 (v)  has no claim of refund of taxes due to him for the income of the assessment year; and

(vi)  has received salary from only one employer for the assessment year.

3. The exemption from the requirement of furnishing a return of income-tax shall not be available where a notice under section 142(1) or section 148 or section 153A or section 153C of the Income-tax Act has been issued for filing a return of income for the relevant assessment year.

4. This notification shall come into force from the date of its publication in the Official Gazette