ITR Forms

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  • 02 Feb 2023

For the Assessment Year 2020-21, the Central Board of Direct Taxes (CBDT) introduced several modifications in the ITR forms. When filling income tax for the income earned from 1 April 2019 to 31 March 2020, you will have to use the updated ITR forms.

Points To Remember About ITR Forms

  1. If your annual income is under Rs 50 lakh and none of it is from a business, then ITR-1 is the form you need to use to file your income tax. The current ITR-1 requires a detailed calculation of income. Your income can only be from salary/pension, one house property and “other sources”. As per the new rules introduced for FY 2019–20, if your taxable income includes dividend from domstic companies, you cannot file ITR-1.

  2. ITR-1 form is no longer available for Non-Resident Indians. If you are an NRI, you will have to choose either ITR-2 or ITR-3 when filing your return.

  3. You can file ITR-1 or ITR-4 if you co-own a single property. But you will have to meet certain conditions first.

  4. If you opt to use presumptive taxation scheme provided for under Section 44AD, 44ADA or 44AE, you will have to use ITR-4 to file your taxes. Earlier, ITR 4 required you to provide only four financial particulars: a) Total creditors, b) Total debtors, c) Total stock-in-trade and d) Cash balance.

The new form requires you to provide 14 financial particulars about your business including amount of secured/unsecured loans, advances, fixed assets, capital account, etc.

  1. Further, you cannot provide aggregate turnover different from the one provided in your GST returns. If any discrepancy is found, the income tax department will ask for a justification.

  2. The new ITR forms require details of each capital gains exemption to be provided separately. Separate columns have been added in sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F. Further, you will also have to provide the date of transfer of original capital asset.

  3. In case of sale of unlisted shares, you will have to obtain a valuation report from a merchant banker or a chartered accountant. The actual sales consideration and FMV provided in the ITR will now be determined based on the valuation report.

  4. All the ITR forms will require you to furnish the following information:

  • If you deposited more than Rs 1 crore in a current account during the financial year
  • If you incurred international travel costs exceeding Rs 2 lakh
  • If your electricity costs amounted to more than Rs 1 lakh during the year
  1. Section 271F was used to determine the penalty on missing the deadline for filing income tax return. That was repealed by Finance Act, 2017. Now, a late fee will have to be paid as per Section 234F along with any interest due under section 234A, 234B and 234C at the time of filing the late ITR.

  2. If you are a partner in a firm, you will have to file income tax using ITR-3. Until FY 2017–18, partners had to use ITR-4.

  3. A CGST, SGST, IGST and UTGST amount that was by paid by you, or refunded to you, will now have to be reported..

  4. The column for gender has been removed from ITR forms 2, 3, and 4. This used to be a mandatory column till FY 2017–18.

  5. The deadline for completing tax-saving investments for FY 2019–20 was extended to 31 July 2020 from the regular due date of 31 March 2020. An exception was made this year owing to the difficulties arising from the COVID-19 lockdowns.

This means taxpayers could spend on Section 80C (LIC, PPF, ELSS, etc.), 80D (health insurance), 80G (donations) and other instruments for deductions under Chapter VIA-B through to 31 July as part of their tax-saving for FY 2019–20. If you have incurred such expenses through April and July 2020, you will have to provide the details in the new ITR forms.

  1. A further extension relates to the roll-over benefit for capital gains under Section 54 and Section 54GB. If you are carrying out an related investment, purchase, or construction, the process and compliance measures must be completed by the end of September 2020. Add in the details in your ITR form.

  2. In the new forms, you will have to provide your passport number if you currently hold a valid passport.

  3. From FY 2019–20 onwards, you will also have to provide your employer’s details. That includes the employer’s name, type of business, address, and TAN. These details are available in your Form-16.

  4. Earning rent from a property that you own? You will have to provide the tenant’s name and Aadhaar or PAN details in ITR-1 and ITR-4.

  5. If you wish to carry forward losses from house property income, you can no longer use ITR-4.

  6. If you are a partner of a firm and filing ITR-4, provide the name and PAN of the firm. You must also provide details of the other partners, including their name, address, PAN, Aadhaar number, ownership share, rate of interest on capital, and remuneration payable.

  7. Make sure to file your ITR by the due date to avoid the penalty of up to Rs 10,000 under Section 234F. The forms include a field to specify the fee payable. While the due date for e-filing returns is usually 31 July, owing to the pandemic, the deadline has now been extended to 30 November 2020.

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