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June 1, 2020

13 Changes in New Income Tax Return Forms Released by IT Dep for AY 2020-21

13 Changes in New Income Tax Return Forms released by IT Dep for AY 2020-21 FY 2019-20

In a notification, the CBDT issued ITR 1 (Sahaj), ITR 2, ITR 3, ITR 4 (Sugam), ITR 5, ITR 6, ITR 7 and ITR V forms on 30 May 2020, a day before promised date of 31 May 2020. The Courts in various ruling has ordered Income Tax Department to release ITR forms by 1 April, though Income Tax Department has released Form ITR 1 and ITR 4 in first week of April, in the wake of the Covid pandemic and relief given, Forms needed revision.

The Major relief was give to make investment and claim deduction in 80C and other for Financial Year 2019-20 till 30 June 2020. Taxpayers can claim deduction only if they invest during the Financial Year, i.e from 1 April 2019 to 31 March 2020. However because of Covid19 Lockdown across India since 22 March 2020 , CBDT has given relief so that taxpayers can invest and claim deduction in 80C and others till 30 June. The income tax department had earlier withdrawn ITR form 1 and ITR form 4 to incorporate changes made in income tax rules for investment in FY 2019-20 in the wake of the Covid pandemic.

Which ITR form is meant for you for filing returns for FY 2019-20

ITR 1 Form: Also known as Sahaj, this one is mainly for salaried Resident individuals earning upto ₹50 lakh annually, having one house property, other sources (Interest etc.), and agricultural income upto Rs. 5 thousand. The Form cannot be used for an individual who is either Director in a company or has invested in unlisted equity shares

ITR 2 Form: For individuals and HUFs not having income from profits and gains of business or profession.

ITR 3 Form: For individuals and HUFs having income from profits and gains of business or profession.

ITR 4 Form: Also known as Sugam, it is meant for individuals, HUFs and firms (other than LLP) having total income upto ₹50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE. The Form cannot be used for an individual who is either Director in a company or has invested in unlisted equity shares

ITR 5 Form: For persons other than individual, HUF, company and person filing ITR 7 form.

ITR 6 Form: For companies other than companies claiming exemption under section 11.

ITR 7 Form: For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only.

Form ITR-V: This is a Acknowledgment of Taxpayers filing ITR, in cases where the data of the Return of Income in Form ITR-1 (SAHAJ), ITR-2, ITR3, ITR-4(SUGAM), ITR-5, ITR-7 filed but not verified electronically (Filled Manually – Now, everyone has to file ITRs digitally except for super senior citizens (that is those aged 80 years and above) who are allowed to file their ITR in paper format.

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Key Changes in ITR forms for Financial Year 2019-20 and Assessment Year 2020-21

1) The new forms require a separate table to disclose tax saving investment made during 1 April 2020 to 30 June 2020 for availing them in FY 2019-20

Taxpayers must assess their tax liability for FY 2019-20 and make sure they are maximising their Section 80C benefits as they still have one month time to invest till 30 June 2020

Deductions under Chapter-VI of Income Tax Act which includes Section 80C (LIC, PPF, etc), 80D (mediclaim) and 80G (donations) will now be allowed for spending till 30th June. The dates for making investment, construction or purchase for claiming roll over benefit in respect of capital gains under sections 54 to section 54F has also been extended to June 30.

2) Taxpayers having taxable income as dividend from domestic companies, you are not eligible to file ITR-1 form

3) Those with joint ownership of a house property cannot file ITR-1 or ITR-4

4) Taxpayers need to answer the following questions related to deposits in current accounts, foreign travel and electricity bills in all the ITR forms

a) “Have you deposited an amount or aggregate of amounts exceeding Rs. 1 Crore in one or more current account during the previous year?”

b) “Have you incurred expenditure of an amount or aggregate of amount exceeding Rs. 2 lakhs for travel to a foreign country for yourself or for any other person?”

c) “Have you incurred expenditure of amount or aggregate of amount exceeding Rs. 1 lakh on consumption of electricity during the previous year?”

5) One needs to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.

6) Furnishing of PAN/Aadhaar No. of tenant is mandatory, if tax is deducted under section 194-IB. and Furnishing of TAN of tenant is mandatory, if tax is deducted under section 194-I. Under Section 194I a person (other than Individuals and Hindu Undivided Family) who is paying rent is liable for Tax deduction at source. The tax can be deducted at source when the total amount of rent to be received or paid in a particular financial year is more than Rs. 1,80,000. While Individuals and Hindu Undivided Families who come under the purview of the taxation are also liable for tax deduction at source, the aggregate limit was previously Rs.1,80,000 but now with effect from 1st June 2017 the rule of the payments has changed. Now both Individuals and Hindu Undivided Family are obligated for tax deduction at source at 5% of the rent collected given the rent exceeds Rs 50,000

If you have rented out a property, then you will have to provide name and Aadhaar or PAN details of your tenant, if available.

7) In ITR-4, PAN number is made optional if Aadhar number is provided. In section 44AD, one new clause added as the electronic mode in addition to electronic clearance and reduced the presumptive income from 8% to 6%.

8) In section 44AE for presumptive income from goods carriages, the celling of maximum row is removed and a new validation “Number of vehicles should not exceed 10 vehicles at any time during the year” is added.

9) Details of Government Employees in ITR Form 1. In ITR Form 1 government employees have been bifurcated in State, Central Government and a new type as “NA” added to the list.

10) In ITR-4, PAN number is made optional if Aadhar number is provided. In section 44AD, one new clause added as the electronic mode in addition to electronic clearance and reduced the presumptive income from 8% to 6%.

11) In Form ITR-6 for companies, provides a new drop down utility to opt for concessional tax regime of 22% offered to corporates or new companies, under section 115BAA or 115BAB

12) The new ITR Forms 3, 5 and 6 seek details pertaining to assessee’s choice of paying additional income tax in case of non-repatriation of primary adjustment within the prescribed time limit.

13) Details of Notice / Order DIN Number and date to be provided by Taxpayers who has replied or received notice in Section, including Date of such Notice or Order

The Due dates for Filing of all ITRs for 2019-20 is extended from 31 July 2020 to November 30, 2020 due to the lockdown and providing enough time for taxpayers to compile data

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