Filing of Return of Income under Income-tax Act, 2025

Filing of Return of Income is the most fundamental obligation under the Income-tax Act. The Income-tax Act, 2025 continues this obligation with greater emphasis on accuracy, timeliness, and digital traceability.

While the core structure of return filing remains intact, enforcement standards and consequences for non-compliance have become significantly stricter.

Let’s break this down clearly.

Who Is Required to File a Return of Income

Under the Income-tax Act, 2025, a return of income is mandatory for:

Individuals whose total income exceeds the basic exemption limit

Companies and firms, irrespective of income or loss

Persons having foreign assets or foreign income

Persons claiming refund

Persons carrying forward losses

The obligation to file return is now linked not only to income level but also to financial activity and asset ownership.

Due Dates for Filing Return

The Act prescribes different due dates depending on the category of taxpayer:

Individuals and non-audit cases

Audit cases

Transfer pricing cases

Adherence to due dates is critical. Late filing directly impacts:

Carry forward of losses

Levy of late fees

Interest liability

Risk of scrutiny selection

Timelines are no longer procedural formalities; they are compliance thresholds.

Types of Returns Recognised

The Income-tax Act recognises multiple forms of return, depending on the nature of income, residential status, and business structure.

Choosing the correct return form is essential. Filing an incorrect form can render the return defective, leading to notices and loss of statutory benefits.

Revised, Belated, and Updated Returns

The Act allows:

Revised returns to correct errors or omissions

Belated returns with additional fees

Updated returns to voluntarily disclose missed income

However, each category has defined limits and consequences. An updated return is not a free correction tool; it comes with additional tax cost.

What this really means is simple:
Early and accurate filing is always cheaper than correction later.

Verification and Processing of Returns

Return filing is incomplete without verification. The Act mandates verification through approved electronic or physical modes.

Once filed, returns are processed through automated systems. Any mismatch in data can result in:

Adjustments

Intimations

Refund withholding

Further scrutiny

Data consistency across PAN, bank accounts, AIS, and TIS is now non-negotiable.

Consequences of Non-Compliance

Failure to file return can lead to:

Late filing fees

Interest on tax payable

Loss of loss carry forward

Penalty proceedings

Prosecution in extreme cases

Non-filing is no longer a low-risk decision.

Conclusion

Under the Income-tax Act, 2025, filing of return of income is not merely a formality. It is a legal declaration backed by data validation and automated enforcement.

Timely filing, correct disclosure, and proper verification are essential to remain compliant and avoid avoidable disputes.

A well-filed return is the first line of defence in any tax proceeding.

Written by:
Abhishek Gupta
Chartered Accountant
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