Question 1

What is Income Tax Return Filing?

Accepted Answer

Income Tax Return (ITR) filing is the formal statutory declaration submitted annually to the Income Tax Department declaring total income earned from all sources, claiming eligible deductions and exemptions, reconciling tax credits (TDS, TCS, Advance Tax), and discharging the final net tax liability.

Question 2

Who is required to file an Income Tax Return?

Accepted Answer

Filing is legally mandatory for individuals whose total income before chapter VI-A deductions exceeds the basic exemption limit, all incorporated companies and LLPs regardless of profit or loss, and individuals satisfying special statutory conditions (e.g. holding foreign assets, spending over ₹2 lakh on foreign travel, or paying over ₹1 lakh in electricity bills).

Question 3

Is ITR filing mandatory even if there is zero profit or a loss?

Accepted Answer

Yes. All companies, LLPs, and partnership firms must file an ITR even if they incurred a loss or had zero operational revenue. For individuals, filing is necessary to carry forward business or capital losses to subsequent years.

Question 4

What is the difference between Financial Year (FY) and Assessment Year (AY)?

Accepted Answer

Financial Year (FY) is the 12-month period in which you earn your income (1 April to 31 March). Assessment Year (AY) is the immediately succeeding year in which that earned income is evaluated, reported, and taxed.

Question 5

What is a Tax Year under the new framework?

Accepted Answer

Under the modernized Income-tax Act, 2025 effective from 1 April 2026, the concept transitions towards a unified 'Tax Year', standardizing reporting cycles and streamlining post-year filing periods.

Question 6

What changed from 1 April 2026 in direct tax laws?

Accepted Answer

The Income-tax Act, 2025 came into force on 1 April 2026. Transactions for the year beginning 1 April 2026 are governed by the new Act, while income earned during FY 2025-26 continues to be reported under the legacy Income-tax Act, 1961 for AY 2026-27.

Question 7

Which Act applies to income earned during FY 2025-26?

Accepted Answer

Income earned between 1 April 2025 and 31 March 2026 is assessed in AY 2026-27 and is governed strictly by the provisions, rules, and return forms of the Income-tax Act, 1961.

Question 8

Which Act applies to income earned during Tax Year 2026-27?

Accepted Answer

Income earned on or after 1 April 2026 is governed by the corresponding provisions and modernized return frameworks of the Income-tax Act, 2025.

Question 9

Do taxpayers need to file two income tax returns for the transition year?

Accepted Answer

No. Official Income Tax Department directives confirm that taxpayers do not file duplicate returns merely because of the legislative transition. Each period has its own distinct, single filing.

Question 10

How does individual income tax filing differ from company filing?

Accepted Answer

Individuals file personal returns based on salary, house property, capital gains, and profession using ITR-1, 2, 3, or 4. Companies must prepare audited financial statements, apply corporate tax provisions, compute MAT where applicable, and file ITR-6 (or ITR-7 for trusts).

Question 11

What is ITR-1 (Sahaj)?

Accepted Answer

ITR-1 is a simplified return for resident individuals (other than RNOR) having total income up to ₹50 lakh derived from salary, one house property, other sources (interest, dividend), and agricultural income up to ₹5,000.

Question 12

Who cannot file ITR-1?

Accepted Answer

Individuals with income above ₹50 lakh, business or professional profits, capital gains, multiple house properties, foreign assets, unlisted equity shares, or directorships in a company cannot file ITR-1.

Question 13

What is ITR-2?

Accepted Answer

ITR-2 is for individuals and HUFs who do not have income from profits and gains of business or profession, but have capital gains, multiple house properties, foreign assets, or dividend income exceeding exemption limits.

Question 14

Who is eligible to file ITR-3?

Accepted Answer

ITR-3 is the comprehensive return for individuals and HUFs carrying on a proprietary business or profession, partners in a partnership firm, or individuals opting out of presumptive taxation.

Question 15

What is ITR-4 (Sugam)?

Accepted Answer

ITR-4 is a simplified presumptive tax return for resident individuals, HUFs, and partnership firms (other than LLPs) with total income up to ₹50 lakh adopting presumptive income schemes under Sections 44AD, 44ADA, or 44AE.

Question 16

Who files ITR-5?

Accepted Answer

ITR-5 is filed by entities other than individuals, HUFs, and companies—including Limited Liability Partnerships (LLPs), partnership firms, Associations of Persons (AOPs), and Bodies of Individuals (BOIs).

Question 17

Who files ITR-6?

Accepted Answer

ITR-6 is the mandatory electronic return for all incorporated companies (Private Limited, Public Limited, and One Person Companies) other than companies claiming tax exemption under Section 11.

Question 18

Who files ITR-7?

Accepted Answer

ITR-7 is for persons, trusts, political parties, educational institutions, and charitable entities claiming tax exemption under Section 11, Section 139(4A), 139(4B), 139(4C), or 139(4D).

Question 19

What are the five statutory heads of income?

Accepted Answer

Income from Salaries, Income from House Property, Profits and Gains of Business or Profession (PGBP), Capital Gains, and Income from Other Sources.

Question 20

What is presumptive taxation under Section 44AD?

Accepted Answer

A simplified scheme for eligible small businesses with turnover up to statutory thresholds (₹2 crore, or ₹3 crore with digital receipts) where net profit is presumed at 8% (6% for digital receipts) without maintaining detailed books.

Question 21

What is presumptive taxation under Section 44ADA?

Accepted Answer

A scheme for specified professionals (legal, medical, engineering, architectural, IT consultancy) with gross receipts up to ₹50 lakh (or ₹75 lakh if digital receipts exceed 95%) presuming 50% of receipts as taxable profit.

Question 22

What is presumptive taxation under Section 44AE?

Accepted Answer

A specialized presumptive scheme for small goods transport operators owning not more than 10 goods vehicles at any time during the year.

Question 23

What is the New Tax Regime vs Old Tax Regime for individuals?

Accepted Answer

The New Tax Regime offers lower concessional tax slabs but disallows most personal deductions (80C, 80D, HRA). The Old Tax Regime allows full Chapter VI-A deductions and home loan interest offsets against higher base tax slabs.

Question 24

Is the New Tax Regime the default regime?

Accepted Answer

Yes. The New Tax Regime is the statutory default regime under direct tax laws. Taxpayers wanting to use the Old Tax Regime must explicitly opt out while filing their return.

Question 25

Can a salaried individual switch tax regimes every year?

Accepted Answer

Yes. Salaried employees without business income can select between the Old and New tax regimes each year at the time of filing their ITR.

Question 26

Can a business owner switch between Old and New tax regimes every year?

Accepted Answer

No. Taxpayers with business or professional income (PGBP) who opt out of the new regime can switch back to the new regime only once in their lifetime; thereafter, they cannot opt out again unless they cease business.

Question 27

What is the Annual Information Statement (AIS)?

Accepted Answer

AIS is a comprehensive data report provided by the Income Tax Department detailing all financial transactions linked to your PAN, including high-value bank deposits, share trading, mutual funds, foreign remittances, and rent.

Question 28

What is the Taxpayer Information Summary (TIS)?

Accepted Answer

TIS is a processed sub-statement of AIS that aggregates transactions into single heads of income to facilitate easy pre-filling and verification during return preparation.

Question 29

What is Form 26AS?

Accepted Answer

Form 26AS is your annual consolidated tax credit statement showing total tax deducted at source (TDS), tax collected at source (TCS), advance tax paid, and self-assessment tax deposited against your PAN.

Question 30

Why should AIS and TIS be checked before filing?

Accepted Answer

Omissions of interest, dividends, or securities transactions reflected in AIS can trigger automated mismatch inquiries or defective return notices under Section 143(1)(a).

Question 31

What is Advance Tax?

Accepted Answer

Advance tax is income tax paid in installments during the financial year in which income is earned, mandatory if the taxpayer's estimated net tax liability after TDS exceeds ₹10,000.

Question 32

What are the quarterly Advance Tax installment due dates for companies?

Accepted Answer

15% by 15 June, 45% by 15 September, 75% by 15 December, and 100% by 15 March of the relevant financial year.

Question 33

What is Self-Assessment Tax?

Accepted Answer

Tax paid voluntarily by the taxpayer after the close of the financial year to discharge any balance tax liability remaining after adjusting TDS, TCS, and Advance Tax.

Question 34

What is the difference between Company Statutory Audit, Tax Audit, and ITR Filing?

Accepted Answer

Statutory Audit is an audit of corporate financial statements under the Companies Act, 2013. Tax Audit is an examination under Section 44AB of the Income-tax Act. ITR Filing is the submission of the tax return itself to the tax department.

Question 35

When is a Tax Audit under Section 44AB applicable to a business?

Accepted Answer

When annual turnover exceeds ₹1 crore (or ₹10 crore if cash receipts and payments do not exceed 5% of total transactions), or when presumptive profits are declared below statutory thresholds.

Question 36

When is a Tax Audit applicable to a professional?

Accepted Answer

When gross receipts from the profession exceed ₹50 lakh (or ₹75 lakh if cash transactions do not exceed 5%), or when profits are declared below 50% under Section 44ADA.

Question 37

What are Form 3CA-3CD and Form 3CB-3CD?

Accepted Answer

Form 3CA-3CD is the tax audit report for entities whose accounts are audited under any other law (such as companies under the Companies Act). Form 3CB-3CD is for entities audited solely under the Income-tax Act.

Question 38

What is Minimum Alternate Tax (MAT)?

Accepted Answer

A statutory provision ensuring that companies reporting high book profits to shareholders but zero or low taxable profit pay a minimum tax based on adjusted book profit.

Question 39

Does MAT apply to companies opting for concessional tax rates like Section 115BAA?

Accepted Answer

No. Companies opting for the concessional 22% corporate tax rate under Section 115BAA or 15% under Section 115BAB are exempt from MAT provisions.

Question 40

What is tax depreciation in company filing?

Accepted Answer

Depreciation computed under the block-of-assets method at statutory rates prescribed under the Income-tax Rules, distinct from accounting depreciation under Companies Act Schedule II.

Question 41

What is an Income Tax Refund?

Accepted Answer

A refund granted when total taxes paid (TDS, TCS, Advance Tax) exceed the final assessed tax liability, credited directly to the taxpayer's validated bank account.

Question 42

Does filing an ITR guarantee an immediate refund?

Accepted Answer

No. Refunds are subject to processing verification by the Centralized Processing Centre (CPC) and can be adjusted against outstanding demands from earlier assessment years under Section 245.

Question 43

What is a Defective Return notice under Section 139(9)?

Accepted Answer

A notice issued when an ITR contains incomplete schedules, missing balance sheet details, or unpaid self-assessment tax, giving 15 days to rectify the defect.

Question 44

What is a Belated Return?

Accepted Answer

An income tax return filed after the original statutory due date but within the permissible extended window allowed by direct tax laws, subject to late fees under Section 234F.

Question 45

What is the Belated Return deadline for AY 2026-27 under the 1961 Act?

Accepted Answer

Under Section 139(4) of the 1961 Act, a belated return for AY 2026-27 can be filed up to 31 December 2026 or prior to completion of assessment, whichever is earlier.

Question 46

What is the Belated Return framework under the Income-tax Act, 2025?

Accepted Answer

Under Section 263(4) of the 2025 Act, belated returns for Tax Year 2026-27 onwards can generally be furnished within nine months from the end of the relevant tax year.

Question 47

What is a Revised Return?

Accepted Answer

A return filed to correct genuine omissions, errors, or wrong deductions discovered after submitting the original return.

Question 48

What is an Updated Return (ITR-U)?

Accepted Answer

A special return permitting taxpayers to declare previously omitted income and pay additional tax within extended statutory windows (up to 48 months under the new framework).

Question 49

Can an Updated Return (ITR-U) be filed to claim an additional refund?

Accepted Answer

No. ITR-U cannot be filed to claim or increase a refund, report a loss, or reduce total tax liability.

Question 50

What is an Intimation under Section 143(1)?

Accepted Answer

An automated summary assessment order sent via email comparing the figures declared in your ITR against CPC system calculations, confirming refund, demand, or nil adjustment.

Question 51

What is an Income Tax Scrutiny Notice under Section 143(2)?

Accepted Answer

A notice selecting an ITR for detailed examination to verify claim authenticity, large deductions, or capital gain exemptions.

Question 52

What is Section 154 Rectification?

Accepted Answer

An online application filed to rectify apparent clerical, mathematical, or TDS credit mismatch errors in an intimation or order issued by the tax department.

Question 53

What is foreign asset and foreign income reporting in Schedule FA?

Accepted Answer

The mandatory disclosure in ITR-2 or ITR-3 by tax residents of foreign bank accounts, shares, real estate, or signing authority overseas, subject to severe penalties under the Black Money Act if omitted.

Question 54

Why is GST reconciliation necessary before filing Company ITR?

Accepted Answer

Tax authorities cross-check outward supplies declared in GSTR-1 and GSTR-3B against gross revenues reported in ITR-6; unexplained variances trigger scrutiny notices.

Question 55

Can capital losses be carried forward if the ITR is filed late?

Accepted Answer

No. Under statutory provisions, business losses and capital losses cannot be carried forward to future years if the original return is filed after the statutory due date.

Question 56

What is return e-verification?

Accepted Answer

The mandatory digital authentication of an uploaded ITR via Aadhaar OTP, net banking, or DSC within 30 days of submission; an unverified return is legally treated as invalid.

Question 57

Can TeleTax Solutions file individual and corporate tax returns?

Accepted Answer

Yes. TeleTax Solutions provides full direct tax management, from salary and capital gains calculations to complex corporate financial statement tax audits and ITR-6 filings.

Question 58

Is TeleTax Solutions an official government tax department?

Accepted Answer

No. TeleTax Solutions is an independent direct tax, regulatory, and corporate licensing consultancy. We do not represent ourselves as an official government agency.

Question 59

Can TeleTax guarantee zero tax scrutiny notices?

Accepted Answer

No professional advisory firm can guarantee zero notices because automated risk management algorithms select returns randomly. We ensure complete documentation defense.

Question 60

How can an individual or company prepare for tax season?

Accepted Answer

Reconcile bank statements, download AIS/TIS and Form 26AS, consolidate capital gains statements, finalize depreciation schedules, and engage advisors well before due dates.

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