Income Tax Return (ITR) forms for FY18-19 have been notified.
Earlier, only super senior citizens whose age is 80 years or above and individuals having income below Rs 5 lakh and not seeking any refund could file tax returns in paper formats. Now only super senior citizens filing ITR-1 or ITR-4 can file in paper format and others will have to compulsorily file electronically.
ITR-1: This form is applicable to resident individuals having total income up to Rs. 50 lakh from salary, one house property and income from other sources with detail break up of the sources. If you are having a house, you are required to specify if it is self-occupied, let-out or deemed to be let-out. Income from other sources include, interest income from bank account, fixed deposits etc.
ITR-2: This from is applicable to individuals and Hindu Undivided Families (HUFs) not having income from profits and gains of business or profession. You are required to provide details of your residency status. If you are a director or if you hold unlisted equity shares you can file ITR-2 or ITR-3 which require detailed information of holdings of unlisted equity shares.
If you are Director of a company, then you will be required to specify your DIN (Director Identification Number) in ITR-2 or 3 whichever is applicable. Along with this you will also be required to provide information – name of company, PAN, whether shares are listed or unlisted.
The new ITR-2 form asks individuals not only to specify the residential status as Resident, Resident but Not Ordinarily Resident or Non-Resident, but also to provide additional information with respect to residential status, such as, number of days of stay in India, jurisdiction of residence and tax identification number in case one is a Non-Resident. The Tax Identification Number will validate if a Non-Resident taxpayer is rightly claiming the DTAA benefit.
ITR-3: This is applicable to individuals and HUFs having income from profits and gains of business or profession.
ITR-4: This is applicable for individuals having total income up to Rs 50 lakh and having income from business and profession whose income is computed under section 44AD, 44ADA or 44AE. ITR-4 can now only be filed by those who are Resident and Ordinarily Resident and their total income does not exceed Rs 50L.
There are no changes related with —ITR-5:For persons other than individual, HUF, Company and persons filing ITR-7.
ITR-6:For Companies other than those claiming exemption u/s 11.
ITR-7:For persons including companies required to be furnished return u/ss 139 4A, 4B, 4C, 4D, 4E or 4F (Charitable & Religious Organisations)
ITR-V: This is the acknowledgment form to be submitted by all taxpayers alongwith their returns. Where the ITR is transmitted electronically without digital signature you have to post it separately to CPC at Bengaluru within 120 days. Your returns will not be considered as filed unless the signed ITR-V reaches the CPC.
Many a time acknowledgments signed in black ink are considered as scanned copies or photocopies of ITR-V and tend to get rejected. Folding the sheet leads to print ink getting erased on the creases. The Department informs you about the rejection by post, which might not reach you in time to act within 120 days.
The Department has started linking Aadhaar with PAN to eliminate ITR-V in due course. All these forms except ITR-7 have been designed as annexure-less to make them amenable for electronic filing.
The following are the main changes in the forms.
1 Complete details of buyer to whom you have sold property
If you have sold a property in FY 2018-19, then while filing ITR-2, you will be required to provide complete details of the buyer to whom you have sold the property, irrespective whether the capital gains accrued are of short-term or long-term in nature.
It is mandatory to deduct TDS if the sale value exceeds Rs 50 lakh. However, if the sale value exceeds Rs 10 lakh but below Rs 50 lakh then deducting TDS is not mandatory but quoting of PAN of the buyer while filing ITR is now mandatory.
2. Property wise details of rent arrears
While filing ITR-1 or ITR-2 if there are any rent arrears that are received by you in FY 2018-19 then you have to report them property wise as received,” If an individual has one house property which is let out during FY 2018-19, then the rent received is required to be reported in ITR-1.
3. Specifying the type of house property
While providing details of your one house property in ITR-1, you are required to specify whether the house is – ‘Self Occupied’, ‘Let-out’ or ‘Deemed Let-out.’ In the previous year’s ITR-1, there was no such option of ‘Deemed let-out’ in ITR-1.
4. Investment details in unlisted companies
If you are holding shares in an unlisted company then, you are required to disclose the extensive details of your holdings in ITR-2 — name of the company, PAN of the company, number and cost of acquisition at the beginning of the year, number of shares, face value, issue price (or purchase price) and date of purchase of shares acquired during the year, number and sale consideration of shares transferred the year, number and cost of acquisition of shares held at the end of the previous year.
5. Reporting of salary details gets easier in ITR-1
This year providing details of your salary income will be easier as the details required are in sync with the information available in Form-16. The salary details required in ITR-1 is now just a copy-paste of the details available in the Form-16.
Over the years, it has been seen that ITR forms are becoming a comprehensive collection of taxpayer data. At a basic individual level, we really do not mind this, since if one has nothing to hide, there is nothing to fear. But it is a travesty that in our country less than 3% of the population actually pays taxes. And in that 3%, less than 5% actually declare factual income. If more compliance requires additional disclosure of information, we guess it is rites of passage and hones taxpayers should support the same for the greater good.
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