The government has announced some important changes in income tax return filing forms for the financial year 2019-20 or assessment year 2020-21. Taxpayers that hold joint ownership in house property and those that have paid ₹1 lakh in electricity bill in one year or have spent ₹2 lakh on travelling to foreign countries cannot file their income tax return using the ITR-1 Sahaj form.
ITR-1 Sahaj can be used by resident individuals for income tax return filing if their total annual income is not above ₹50 lakh. ITR-4 Sugam is for resident individuals, Hindu Undivided Family (HUF) and firms except LLP, that have a total annual income up to ₹50 lakh with presumptive income from business and profession.
What this means is that if an individual taxpayer is a joint-owner in house property, they cannot file their income tax return using Forms ITR-1 and ITR-4. Additionally, if an individual taxpayer has deposited more than ₹1 crore in their bank account or have spent ₹2 lakh or ₹1 lakh on foreign travel or electricity bills, they cannot use Form ITR-1 for filing income tax return.
Usually the Income Tax Department announces these changes in the first week of April of the relevant assessment year but they have gone against the grain this time and have announced changes in the use of Forms ITR-1 and ITR-4 in the first week of January of the relevant financial year.
With just the last quarter left of this financial year, it is time to start getting everything in order before income tax return filing season starts again. If you haven’t filed your income tax return for financial year 2018-19, then e-file your belated ITR with us now!