The Central Board of Direct Taxes (CBDT) has been very prompt in notifying the income tax return (ITR) forms for assessment year (AY) 2020-21. Usually, CBDT issues new ITR forms once the financial year (FY) gets over. In the last several years, because of various amendments in ITR forms, there was a delay in notifying ITR forms even after the FY started.
The new forms incorporate the changes made in the last Finance Act. We give you the details.
Early notification
In the current AY20, there are around seven ITR forms in total. CBDT has notified two forms—ITR 1 and ITR 4—for AY21; the remaining ITR forms are expected to get notified soon.
“The government wants to avoid backlash that we usually witness year-on-year because of delay in notifying the ITR forms or amendments thereafter," said Amit Maheshwari, partner, Ashok Maheshwary and Associates Llp, a chartered accountancy firm.
It is expected that this year the government will notify all the forms before the end of the FY and update utilities (e-filing tax return forms) accordingly so that a tax payer will be able to file ITR as soon as the AY starts, added Maheshwari. It may be noted that in AY20, though the forms were notified early, the utilities were revised multiple times, the last being in July.
The changes
Like every year, the tax department has made some changes to the notified ITRs.
To start with, apart from basic information like permanent account number (PAN) and Aadhaar number that you have to mention in the ITR forms , you also need to mention your passport number, if you have a valid Indian passport, in ITR-1 and ITR-4, whether you went abroad or not during the assessment year.
Apart from that, there are two other major changes in the ITR forms.
ITR-1, which is also known as “Sahaj", can be used by an individual whose income primarily include salary income and whose total income does not exceed ?50 lakh during the FY. It can also include income from interest (bank deposits, savings accounts and so on), family pension and agriculture income (not more than ?5,000).
On the other hand, ITR-4 can be used to file returns by resident individuals, Hindu Undivided Families (HUFs) and firms (other than Llp) having a total income of up to ?50 lakh from business and profession and those filing ITR under the Presumptive Taxation Scheme (PTS).
Also, in accordance with the Finance Act, 2019, if you have made an aggregate deposit of more than ?1 crore in one or more current accounts, then the aggregate of the amount deposited in all such accounts need to be mentioned in the ITR forms. There was no such provision earlier.
Another change is that those who file ITR under PTS will have to divulge additional information this time. They will have to mention the opening balance of cash in hand, the opening balance of bank accounts and the total amount received in cash during the year, besides the total amount deposited in the banks during the year. Apart from that, the total amount of cash outflow, withdrawal from a bank account and closing balance of cash in hand and with the banks also need to be disclosed in the ITR form.