The Income Tax Department of India has made numerous alterations in the Income Tax Return (ITR) forms applicable for tax return filing for the financial year 2019-20 (FY20). Under it, people and HUFs, who are not unemployed and are not earning profits of business or profession, can file a return of pay by utilizing ITR-1 or ITR-2.
9 Key Changes made in ITR-1 and ITR-2 for FY 2019-20
Income Tax Department has made several changes in ITR-1 and ITR-2 for FY 2019-20. Discover it in detail:
New ‘Schedule DI ‘ to furnish details of investments made during the extended period
The Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, proclaimed on March 31, 2020, stretched out the time limit to make investments deposits for FY20, till July 31, 2020. The new Schedule DI intrigued by ITR forms 1 and 2 will permit the taxpayers to avail the deduction for investments/deposits made during the duration of the extension. The duration to make tax-saving investments got an extension of four months whereas the threshold limit for investment did not change, therefore, it should not be higher than Rs. 1.5 Lakh.
Filing ITR by a person falling under the Seventh proviso to section 139(1)
To guarantee that people, going into certain high-esteem transactions, furnish the ITR, the seventh proviso to Section 139 was embedded by the Finance (No. 2) Act, 2019. The provision requires each individual, who is generally not required to file ITR because of the explanation that his pay doesn’t surpass the maximum exemption limit, to file tax return if during FY 2019-20 he has:
- Saved more than Rs 1 crore by depositing it in at least one or more than one current accounts kept up with a bank or a co-operative bank;
- Incurred more than Rs 2 lakh for himself or some other individual in order to travel to a foreign country.
- Incurred more than Rs 1 lakh towards the payment of the electricity bill.
On the off chance that an assessee is needed to file the return of salary in the conditions covered under the seventh stipulation to Section 139(1), he is needed to furnish the significant subtleties in ITR-1 and ITR-2 forms.
Option to quote PAN or Aadhar in various schedules
The Finance (No. 2) Act, 2019 embedded subsection (5E) to Section 139A to permit the interchangeability of Aadhar with PAN. In this way, where an individual has not been allocated PAN, yet he has Aadhar, he may furnish his Aadhar number in lieu of PAN, and such an individual will be assigned a PAN in the prescribed manner.
Further, every individual who has been allotted a PAN, and who has connected his Aadhar number with PAN according to section 139AA, may furnish his Aadhar number in lieu of PAN for all the transactions where quoting of PAN is necessary according to the Income-Tax Act. Different timetables of ITR-1 and ITR-2 require the assessee to furnish PAN of the subsequent party, inter-alia, tenant, purchaser, and so forth. To permit quoting of Aadhar instead of PAN, these timetables presently substitute the term ‘PAN’ with ‘PAN/Aadhar’.
Appropriately, the assessee can furnish Aadhar or PAN in respect to the following individual:
- An individual documenting the Income-return form as a representative assessee;
- Co-owner of the house property;
- Tenant(s) of the house property;
- Buyer of the unflinching property transferred during the year;
- An individual whose tax reduction is being claimed by the assessee;
- Tenants/purchaser who has deducted tax at source;
- The person holding 10% or a greater amount of voting power if there should be an occurrence of an unlisted company.
- Shareholders of unlisted companies including start-ups;
- A person whose income is clubbed with the income of the assessee.
- Spouse governed by the Portuguese Civil Code.
Separate reporting of surcharge on income chargeable to tax under sections 112A, 111A, 115AD
The rate of surcharge was upgraded by the Finance (No. 2) Act, 2019. Two new extra rates of surcharge have been presented, that is, 25 percent and 37 percent where the pay surpasses Rs 2 crore and Rs 5 crore, individually. Be that as it may, because of the worries raised by domestic and foreign speculators, the improved rates of surcharge of 25 percent or 37 percent were pulled back on the individual, HUF, AOP, BOI, and Artificial Juridical Person in regards of tax payable on salary emerging from the transfer of long haul or short term capital assets available under areas 111A, 112A and pay available under proviso to section 115AD(1)(ii)(iii).
Section 111A provides the taxability of short term capital gains emerging from the offer of listed securities. Section 112A is appropriate if the resultant capital gains are emerging from long haul capital resources. In both the provisions, payment of securities transaction tax (STT) is at the hour of sale of such securities is an important condition. Section 115AD(i)(ii)(iii) manages taxability in the hand of Foreign Institutional Investors from capital additions emerging from the sale of securities.
Considering the non-applicability of the enhanced surcharge on these predefined incomes, ITR-2 has been reexamined to suitably show the calculation of surcharge on different salaries in the hands of the assessee. Columns have been embedded for discrete detailing of surcharge on pay chargeable under section 111A, 112A, and stipulation to section 115AD(1)(ii)/(iii).
Type of company to be reported if the assessee is a director in a company or holding unlisted equity shares
ITR-2 applicable for FY2018-19 required the directors of organizations to furnish the accompanying subtleties:
- Name of the organization
- Regardless of whether the shares are listed or not
- The initiative was taken to check shell organizations and ghost directors.
The new ITR-2 form for FY 2019-20 requires the directors to provide data related to the type of the company. The utility will give a drop-down rundown of the kind of organizations and the assessee directors are needed to pick anyone from them.
The ITR forms require the individual assessee to furnish the nature of work. Until a year ago, only the accompanying classes were available for selection:
- Public sector undertaking
The new ITR-1 form increases the category of employers. Government employer is bifurcated into Central and State governments. Presently, in the new ITR forms, the following six categories are available for choice in the nature of employment.
· Central Government
· State Government
· Public sector undertaking
Unique Document Identification is required if return is filed in response to a notice
The CBDT has made it obligatory for the authorities to cite Document Identification Number (DIN) in all correspondence issued by them. DIN Mechanism was created to keep up a legitimate audit trail of all the communications with the taxpayer. Post the introduction of the DIN framework from October 1, 2019, each notice gave by the office contains a special ID number. The new ITR-1 and ITR-2 forms require the assessee to give the DIN of the notice in light of which he is filing the return of income.
Consequential changes in the Schedule of Deductions under Chapter VI-A
Section 80EEA and Section 80EEB were presented by the Finance (No. 2) Act, 2019 to give allowance in respect of interest on home loan and interest on loan taken for electric vehicles individually. The important changes have been made to ITR-1 and ITR-2 form to guarantee these deductions in ITRs.
Assessee can choose multiple bank accounts for payment of refund
At the hour of filing ITR, the assessee is needed to furnish the subtleties of all bank accounts held in India during the previous year (barring torpid records). Out of the referenced accounts, the assessee is needed to show at least one account in which he wants to get the tax refund. In the new ITR-1 and ITR-2 forms, the assessee has been given a choice to pick various bank accounts for the payment of the refund. Notwithstanding, the refund will be credited to one of the accounts decided by CPC subsequent to the processing of ITR.
For more information, visit the website of All India ITR