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Changes in ITR form FY (2020-21)


The Central Board of Direct Taxes (CBDT) advises Income-tax (7th Amendment) Rules 2021. In this notification, Rule 12 of the Income-tax Rules, 1962 is being amended, and Income tax Return forms for AY 2021-22 are being notified.

Like every year, the tax department has made some additions to the notified ITRs. It will provide some ease in compliance burden on tax return preparers as well as taxpayers. Permanent account number (PAN) and Aadhaar number mentioned in the ITR forms, an individual should also note their passport number, if you have a valid Indian passport, ITR-1 and ITR-4, whether you went abroad not during the assessment year.

Apart from that, there are two other significant changes in the ITR forms:

  • An individual taxpayer cannot file remit either in ITR-1 or ITR-4 if he is a joint-owner in house property.
  • ITR-1 is not reasonable for those individuals who have retained more than Rs 1 crore in a bank account or have invited Rs 2 lakh or Rs 1 lakh on foreign travel or electricity, respectively.

ITR-1, additionally referred to as “Sahaj,” can often be used by an individual whose income generally includes salary income and whose total income doesn’t exceed Rs 50 lakh during the FY. However, it also can consist of income from interest (bank deposits, savings accounts than on), family pension and agriculture income (not quite Rs 5,000).

The significant changes which are made in the ITR-1 for the FY 2019-20 are:

  • ITR 1 form for FY 2018-19 doesn’t apply to an individual who is either a director of a corporation or has invested in unlisted equity shares.
  • Under Part A, the ‘Pensioners’ checkbox has been introduced under the ‘Nature of employment section.
  • Return filed under section has been separated between regular filing and filed in response to notices.
  • Deductions under salary are going to be bifurcated into standard deduction, entertainment allowance and professional tax.
  • The taxpayers will be required to supply income-wise detailed information under the income from other sources.
  • A separate column is proposed under ‘Income from other sources’ for deduction u/s 57(iia) – just in case of family pension income.
  • It was deemed to be a let loose property option now available under income from house property.
  • Section 80TTB column has been comprised of senior citizens.

The significant changes which were made in the ITR-1 for the AY 2020-21 are:

  • Individual taxpayers who meet the standards of:
    • making cash deposits above Rs 1 crore with a bank; or
    • incurring expense above Rs 2 lakh on foreign travel; or
    • Expenditure above Rs 1 lakh on electricity should also file ITR-1. The taxpayer should indicate the quantity of the deposit or expenditure.
  • The individual’s condition having income from salaries, one house property, and other income and having total income up to Rs 50 lakhs continues.
  • Resident individuals who own one property in joint ownership also can file ITR-1, where the entire income is up to Rs 50 lakh.
  • Taxpayers should separately disclose the quantity of the investment or deposits or payments towards tax-saving made up from 1 April 2020 until 30 June 2020.

On the opposite hand, ITR-4 are often wont to file returns by resident individuals, Hindu Undivided Families (HUFs) and firms (other than LLP) having a total income of up to Rs 50 lakh from business and profession and people filing ITR under the Presumptive Taxation Scheme (PTS). Also, following the Finance Act, 2019, if you’ve got made an aggregate deposit of quite Rs 1 crore in one or more current accounts, then the mixture of the quantity deposited altogether such reports got to be mentioned within the ITR forms. There was no such provision earlier.

Another change is that those that file ITR under PTS will need to divulge additional information at this point. For example, they will need to mention the opening balance of money in hand, the opening balance of bank accounts, and the total amount obtained in cash during the year, besides the entire amount deposited within the banks during the year. Aside from that, the whole amount of money outflow, withdrawal from checking account and shutting balance of money in hand and the banks also got to be disclosed within the ITR form.

Due date of filing ITR
As per the income tax law, individual taxpayers filing ITR-1 or 4 must file their return for the preceding financial year (2020-21), which ended March 2021, by 31st July 2021 to 30th September 2021.

 At AJSH, we assist our clients in dealing with various income tax compliances, including income tax assessments, ITR filings, TDS returns, tax advisory and other related services by providing them adequate support and guidance from our end. If you have any questions or wish to know more about recent changes in the ITR form, kindly contact us.



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