Income Tax Return: Step by Step Guide on filing ITR 7

ITR 7 - Taxscan

The Central Board of Direct Taxes (CBDT) notified the guidelines for filling the particulars in Income‐tax Return Form‐7 for the Assessment Year 2021‐22 relating to the Financial Year 2020‐21.

What is  ITR-7?

ITR-7 is filed when persons including companies fall under section 139(4A) or section 139 (4B) or section 139 (4C) or section 139 4(D).

Who is eligible to use this Return Form?

Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.

Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.

Return under section 139(4C) is required to be filed by every scientific research association; news agency; association or institution referred to in section 10(23A); institution referred to in section 10(23B); and fund or institution or university or other educational institution or any hospital or other medical institution.

Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.

Return under section 139(4E) must be filed by every business trust which is not required to furnish return of income or loss under any other provisions of this section.

Return under section 139(4F) must be filed by any investment fund referred to in section 115UB. It is not required to furnish return of income or loss under any other provisions of this section.

Manner of filing and verification of 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 (www.incometaxindiaefiling.gov.in) [www.incometax.gov.in from 7‐June‐2021] and verified by digitally signing the verification part, or authenticating by way of electronic verification code (EVC), or Aadhaar OTP, by sending duly signed paper Form ITR‐V – Income Tax Return Verification Form by post to CPC at the Centralized Processing Centre, Income Tax Department, Bengaluru— 560500, Karnataka.
The Form ITR‐V‐Income Tax Return Verification Form should reach within 120 days from the date of e‐filing the return.

The confirmation of the receipt of ITR‐V at Centralized Processing Centre will be sent to the assessee on e‐mail ID registered in the e‐Filing account. However, a political party shall compulsorily furnish the return.

In case an assessee is required to furnish a report of audit under sections 10(23C)(iv), 10(23C)(v), 10(23C)(vi), 10(23C)(via), 12A(1)(b), 92E he shall file such report electronically on or before the date of filing the return of income.

Key changes (as compared to ITR for AY 2020‐21)

In Part A General ‐ Details of registration or approval under Income Tax Act (Mandatory if required to be registered)‐ Section 12AB has been inserted in the dropdown (Application for registration is made as per new provisions).

In schedule, BP, Income/ receipts credited to profit and loss account considered under head “other sources” has been bifurcated into 2 parts as “Dividend income” and “Other than dividend income”

In schedule OS, (i)  The existing drop related to “Dividend income” is bifurcated into 2 parts i.e “Dividend income [other than (ii)]” and “Dividend income u/s 2(22)(e)” (ii)  Dividend will now be taxable from Rs.1/‐ as the section 115BBDA is omitted. Accordingly, Interest expenditure u/s 57(1) to earn a Dividend can be claimed at Sl.no.3 (iii)  The existing drop-down at Sl. No. 2d “115AD(1)(i)‐ Income received by an FII in respect of securities (other than units referred to in section115AB)” bifurcated into 2 drop downs as under 115AD(1)(i) (Income being Dividend received by an FII in respect of securities (other than units referred to in section115AB) @20%), 115AD(1)(i) (Income being other than dividend income received by an FII in respect of securities (other than units referred to in section115AB) @20%)

 Further new drop downs are inserted in sl. No. 2d and Sl. No. 2e wrt “Interest referred to in section 194LC(1)” and Distributed income being Dividend referred to in section 194LBA

Section 115BBDA is removed from AY 2021‐22 onwards, hence corresponding drop downs are removed from sl. No. 2d and 2e of schedule OS

 In existing Sl. No. 10 “Information about accrual/receipt of income from Other Sources”

 Field “Dividend Income u/s 115BBDA” is changed to “Dividend income” due to finance Act changes one more line item is inserted to capture the quarter-wise break up of dividend income which is taxable at DTAA Rates. This information will be used to calculate interest u/s 234C.

In Schedule TDS, earlier TDS credit is allowed only if corresponding income is being offered for tax this year, however, an exception is being added for TDS u/s 194N. Also, the label is amended to include form 16D for the claim of TDS.

 Upload level validations table is modified wrt mapping changes and new rules

Note on calculation of “Eligible Interest expenditure” at sl.no.3c(ii) of Schedule OS.

Note on “How to provide Bifurcation of sl.no.1(i) OS dividend income other than 2(22) (e) and 1(ii) Dividend income u/s 2(22)(e) for 234C.

Determining income for calculation of 234C.

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in

Related Stories