The Central Board of Direct Taxes (CBDT) kickstarted the annual income tax return filing ritual recently. The new income tax return (ITR) forms for the assessment year 2019-20 come with a set of changes—essentially more detailed disclosures for taxpayers to contend with.
The new ITR forms require detailed information like directorship details and information about unlisted equity shares held by the taxpayer.
Here are the details of all the changes in the new ITR forms:
A resident individual with a total income up to Rs 50 lakh can use ITR-1 to file for AY 2019-20. Such individuals can report salary income, income from one house property, income from other sources and agricultural income up to Rs. 5,000 in this form.
ITR-1 form is no longer applicable to a taxpayer who is a director of a company or has held unlisted equity shares at any time during the financial year.
The individual having salary income will have to report details of the various deductions under “Part A- Income from Salary” section. These details will cover standard deduction, exempted allowances like house rent allowance. Also, it is now required to give income details, like interest received on a savings account and interest received on fixed deposit, under “Income from other sources”.
Individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession can file ITR-2. Also, the individuals who are not eligible to file ITR-1 can file ITR-2.
The taxpayers will have to specify their residential status of the FY 2018-19 in ITR-2. A resident and an ordinary resident will be required to furnish details of days of stay in India in the previous year, during the preceding four years. Also, a non-resident will have to provide details of the jurisdiction of residence and taxpayer identification numbers of such country.
An individual who is a director of a company will have to furnish his Director Identification Number (DIN) and mention the details of the companies with their PAN and listing details. In case of a taxpayer having held investments in unlisted equity shares during the financial year, the details like movement in the investment, face value and purchase price have to be furnished.
The newly notified form ITR-2 also requires detailed disclosures for various transactions. In case of donations eligible for deduction under Section 80G, segregation into cash and other modes have to be provided; a maximum donation that can be made in cash is restricted to Rs 2,000 as per existing requirements. In the case of agricultural income exceeding Rs 5 lakh, the location and ownership details of agricultural land must be provided.
For an immovable property sold, the address of the property with buyer’s details is required to be furnished. The details include the name and the PAN of the buyer, the percentage share in the property.
Also, since the long term capital gains on listed equity shares and equity-oriented funds were taxable from April 1, 2018, the Schedule-Capital Gains in the ITR form has been changed accordingly.
The taxpayers having income from business or profession will have to use ITR-3 form to file their returns. All the additional information and disclosures required in ITR-2 is applicable in filing ITR-3.
Resident and ordinary resident having an income of up to Rs 50 lakh can file ITR-4 form. The director of a company or those who held unlisted equity shares at any time during the FY 2018-19 cannot use ITR-4 for filing their returns; they have to file ITR 3 form.
The taxpayers having a business of plying, hiring and leasing goods carriages and have opted for presumptive taxation scheme (Section 44AE) will now have to provide details, such as registration number of goods carriage, whether owned or leased or hired and tonnage capacity of goods carriage (in MT)in the new ITR-4.
In addition to these new changes, only taxpayers above the age of 80 years filing ITR-1 or ITR-4 are eligible for paper filing facility. Everyone else must mandatorily file their returns online. Also, taxpayers with income up to Rs 5 lakh and seeking a refund are not allowed to file their ITR in the paper format starting this AY 2019-20.
The author is the Founder & CEO ClearTax.