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CBDT vide notification no 31/2020 dated 29th May 2020 have notified Income Tax return forms for AY 2020-21. ITR 1(Sahaj), ITR 2, ITR 3, ITR 4 (Sugam), ITR 5, ITR 6, ITR 7 and ITR V have been notified. In this blog, we shall be discussing the key changes in the Income Tax return forms notified for AY 2020-21.
Before discussing key changes in the Income Tax returns for AY 2020-21, we shall discuss briefly which ITR Form is relevant for different assesses.
Check out: Income Tax Classes
ITR 1 Form also known as Sahaj is for the salaried resident individuals other than not ordinarily resident earning up to Rs. 50 lakhs annually, having income from one house property, having income from other sources and having agricultural income up to Rs. 5000. ITR-1 Form cannot be used by an individual who is either a Director in a company or has invested in the unlisted equity shares.
Download: ITR 1 Form
ITR 2 Form is for Individuals and HUFs not having profit and gains from Business or Profession. In nutshell, Individuals and HUFs having income from business or profession or those who are eligible to file ITR- 1 cannot file ITR-2.
Also, it should be noted that ITR-1 is not applicable for Residents and not ordinarily residents (RNOR) and Non-residents and hence they are supposed to go for ITR-2 even if the Total annual Income is less than INR 50 lakhs.
Download: ITR 2 Form
ITR-3 Form is applicable for Individuals and HUFs who have Income from PGBP (both Tax audit and non-tax audit cases).
The return may include income from house property, salary income, capital gain and Income from other sources.
Download: ITR 3 Form
ITR 4Form is ITR form for those who opt for presumptive taxation scheme as per Section 44AD, Section 44ADA and 44AE of the Income Tax Act 1961. It should be noted that if the turnover of the business is above 2 crores then ITR 4 cannot be filed and hence taxpayer will be required to file ITR 3.
Individual opting for presumptive taxation as well as having Income from salary, house property and other sources up to Rs. 50 lakhs can opt for this form.
The following cannot opt for ITR 4 Form: -
a) Individual having Income from salary, house property and other sources exceeding Rs. 50 lakhs
b) Individual who is a director in a company or has invested in unlisted equity shares cannot use this form.
c) Individual, HUF whose accounts are required to be audited under the Income Tax Act 1961 cannot opt for ITR Form 4.
Download: ITR 4 Form
ITR 5 Form is the form used for filing ITR meant for Firms, LLPs, AOPs, BOIs, Artificial Judicial Persons, Estate of Deceased, Estate of Insolvent, Business Trust and the Investment fund. In nutshell, ITR 5 Form is used by persons other than Individual, HUF, company, and person filing ITR 7
Download: ITR 5 Form
6) ITR-6:
ITR 6 Form is used by companies other than companies claiming exemption u/s 11 of the Income Tax Act 1961
Download: ITR 6 Form
ITR 7 form is used by persons including companies who are required to furnish return u/s 139(4A)- Charitable or Religious Trust, u/s 139 (4B)- Political Party, u/s 139 (4C)- Scientific Research, u/s 139 (4D) University or College, u/s 139 (4E)- Business Trust and u/s 139 (4F) Investment Fund.
Download: ITR 7 Form
1) Key Changes in ITR 1 FORM
a) A new checkpoint has been inserted in the General Information of the ITR 1 i.e. whether the taxpayer has (i) has made cash deposit above Rs. 1 crore in one or more current accounts during the previous year, (ii) incurred expenditure on foreign travel to any foreign country for himself or for any other person or (iii) incurred an expenditure of amount exceeding Rs. 1 lakh on the consumption of electricity during the previous year. Such expenditure or deposit needs to be reported.
b) The taxpayer should separately disclose the amount of investment or deposit towards tax savings made from 01st April 2020 to 30th June 2020 as due to COVID 19 the last date to make tax-saving investments u/s 80C-80GGC has been extended to 30th June 2020.
c) Taxpayers with Joint ownership of property cannot file either ITR 1 or ITR 4.
d) The ‘Schedule VI-A’ for tax deductions has been amended to include deduction under section 80EEA and section 80EEB.
e) Multiple accounts can be provided for the credit of the refund. If a taxpayer selects multiple bank accounts for credit of refund, the income tax department may choose any account for processing the refund.
f) Nature of Employment- Inclusion of CG & SG category instead of Govt. category only
2) Key Changes in ITR 2 FORM
a) A new checkpoint has been inserted in the General Information of the ITR 2 i.e. whether the taxpayer has (i) has made cash deposit above Rs. 1 crore in one or more current accounts during the previous year, (ii) incurred expenditure on foreign travel to any foreign country for himself or for any other person or (iii) incurred an expenditure of amount exceeding Rs. 1 lakh on the consumption of electricity during the previous year. Such expenditure or deposit needs to be reported.
b) The taxpayer should separately disclose the amount of investment or deposit towards tax savings made from 01st April 2020 to 30th June 2020 as due to Covid-19 the last date to make tax-saving investments u/s 80C-80GGC has been extended to 30th June 2020
c) The ‘Schedule VI-A’ for tax deductions has been amended to include deduction under section 80EEA and section 80EEB.
d) Under General Information in ITR 2 form where the assessee needs to disclose about the directorship of the company or holding unlisted equity shares, one new disclosure column is added which is “Type of Company” for which a drop-down shall be provided in the Form.
e) In case of STCG/LTCG on sale of land or building or both, the details of the buyer(s) i.e. name, PAN, Aadhaar, percentage share of the ownership and the address needs to be provided
f) A new and separate schedule 112A for LTCG from the sale of equity shares in a company or unit of equity oriented fund or unit of business trust on which STT is paid has been introduced.
g) A new schedule 115AD(1)(B)(iii) Proviso for Non-residents from the sale of equity shares in a company or unit of equity-oriented funds or unit of business trust on which STT is paid has been introduced.
h) A new schedule- Schedule PTI for Pass-through Income details from Business Trust or Investment fund as per section 115UA has been introduced. Under this schedule amount shall be bifurcated as under:
1) Current Year Income
2) Share of current year loss distributed by the Investment fund.
3) Net Income/Loss
i) Separate disclosure for Bank a/cs in case of Non- Resident who is claiming IT refund and not having a bank account in India. Following will be required to disclose:
SWIFT Code
Name of the Bank
Country of Location
IBAN
j) Multiple accounts can be provided for the credit of the refund. If a taxpayer selects multiple bank accounts for credit of refund, the income tax department may choose any account for processing the refund.
k) SCHEDULE – FSI & TR Details of Income from outside India & tax relief is available only in case of the resident.
3) Key Changes in ITR 3 FORM
In ITR 3 Form all the changes as mentioned above related to ITR 2 Form are there. Besides the above mentioned, the following are certain additional changes in ITR 3 Form.
a) A new Disclosure criteria under Audit Information regarding the declaration of Income as under has been added:
(a1) Are you liable to maintain accounts as per section 44AA? (Tick) þ o Yes o No
(a2) Whether the assessee is declaring income only under Section 44AE/44B/44BB/44AD/44ADA/44BBA/44BBB o Yes o No
a2i If No, whether during the year Total sales/turnover/gross receipts of the business exceeds Rs. 1 crore but does not exceed Rs. 5 crores? o Yes o No
a2ii If Yes is selected at a2i, whether the aggregate of all amounts received including the amount received for sales, turnover or gross receipts or on a capital account like capital contributions, loans etc. during the previous year, in cash, does not exceed five per cent of the said amount? o Yes o No
a2iii If Yes is selected at a2i, whether the aggregate of all payments made including amount incurred for expenditure or on the capital account such as asset acquisition, repayment of loans etc., in cash, during the previous year does not exceed five per cent of the said payment? o Yes o No
b) The details of tax on secondary adjustments to transfer price under section 92CE(2A) have been added.
Note: Read all the changes as mentioned in point (a) to point (k) mentioned under heading key changes in ITR 2 Form as those are applicable for ITR 3 Form too
4) Key Changes in ITR 4 FORM
a) A new checkpoint has been inserted in the General Information of the ITR 1 i.e. whether the taxpayer has (i) has made cash deposit above Rs. 1 crore in one or more current accounts during the previous year, (ii) incurred expenditure on foreign travel to any foreign country for himself or for any other person or (iii) incurred an expenditure of amount exceeding Rs. 1 lakh on the consumption of electricity during the previous year. Such expenditure or deposit needs to be reported
b) Nature of Employment- Inclusion of CG & SG category instead of Govt. category only
c) The taxpayer should separately disclose the amount of investment or deposit towards tax savings made from 01st April 2020 to 30th June 2020 as due to COVID 19 the last date to make tax-saving investments u/s 80C-80GGC has been extended to 30th June 2020
d) The ‘Schedule VI-A’ for tax deductions has been amended to include deduction under section 80EEA and section 80EEB.
5) Key Changes in ITR 5 FORM
a) A new and separate schedule 112A for LTCG from the sale of equity shares in a company or unit of equity oriented fund or unit of business trust on which STT is paid has been introduced
b) A new schedule 115AD(1)(B)(iii) Proviso for Non-residents from the sale of equity shares in a company or unit of equity-oriented funds or unit of business trust on which STT is paid has been introduced
c) A new schedule- Schedule PTI for Pass-through Income details from Business Trust or Investment fund as per section 115UA has been introduced. Under this schedule amount shall be bifurcated as under:
1) Current Year Income
2) Share of current year loss distributed by the Investment fund.
3) Net Income/Loss
d) Separate disclosure for Bank a/cs in case of Non- Resident who is claiming IT refund and not having a bank account in India. Following will be required to disclose:
SWIFT Code
Name of the Bank
Country of Location
IBAN
e) The details of tax deduction claims for investments or payments or expenditure made between 1 April 2020 until 30 June 2020.
f) The details of tax on secondary adjustments to transfer price under section 92CE(2A) have been added
g) There has been an Inclusion of additional table for details of Investment / Deposits / Payments (80G/80GGA/80GGC/10AA/54D/54G/54GA)
h) A new Disclosure criterion under Audit Information regarding the declaration of Income as under has been added as mentioned under point (a) of ITR 3 Changes
i) Under Computation of Income from Business or Profession, New section “E” is added i.e. Computation of income from life insurance business referred to in section 115B
6) Key Changes in ITR 6 FORM
a) A new and separate schedule 112A for LTCG from the sale of equity shares in a company or unit of equity oriented fund or unit of business trust on which STT is paid has been introduced
b) A new schedule- Schedule PTI for Pass-through Income details from Business Trust or Investment fund as per section 115UA has been introduced. Under this schedule amount shall be bifurcated as under:
1) Current Year Income
2) Share of current year loss distributed by the Investment fund.
3) Net Income/Loss
c) Separate disclosure for Bank a/cs in case of Non- Resident who is claiming IT refund and not having a bank account in India. Following will be required to disclose:
SWIFT Code
Name of the Bank
Country of Location
IBAN
d) The details of tax deduction claims for investments or payments or expenditure made between 1 April 2020 until 30 June 2020
e) The details of tax on secondary adjustments to transfer price under section 92CE(2A) have been added
f) Any other income chargeable at a special rate- Insertion of certain points under Part B- TI related to royalty, FTS, Income from units purchased in foreign currency by an offshore fund, Tax on dividend received by an Indian company from a specified foreign company- 115BBD.
g) Under Computation of Income from Business or Profession, New section “E” is added i.e. Computation of income from life insurance business referred to in section 115B
7) Key Changes in ITR 7 FORM
a) Under Basic personal information- Details of registration or approval under the Income-tax Act, 4 more declarations added under tab Details of registration or approval :
• Whether Application for registration is made as per new provisions
• Section under which the registration is applied
• Date on which the application for registration/approval as per new provisions is made
• Section of exemption opted for under the new provisions
b) Following 2 points have been removed from Part B (Total Income)
• Corpus donation to other trust or institution chargeable as per Explanation 2 to section 11(1)
• Deduction u/s 10AA
c) A new point under Part B – Computation of tax liability on TI: Net tax payable on 115TD income including interest u/s 115TE
d) Following Points have been inserted from the Income chargeable to tax at special rates:
1. 115B (Profits and gains of life insurance business)
2. 115BBF (Tax on income from patent)
3. 115BBG (Tax on income from transfer of carbon credits)
In this blog, we have tried to cover all possible important changes in the ITR Forms for AY 20-21. We have tried our level best to cover up all key changes and if you think that something is missing or in case you find any error in the above write up then you may mention in the comment box below.