ITR Decoded: All about new ITR Forms

New income tax return forms (ITR forms) have been notified for the Assessment Year 2019-20 (FY 2018-19). These forms will be used to report income earned in the financial year 2018-19. Notably, the facility of paper filing is now available only to those who are more than 80 years of age and are filing ITR-1 or ITR-4. All other taxpayers must file ITR online mandatorily.

The forms notified for AY 2019-20 require additional detailed disclosures for a variety of income sources, transactions and so on. The following are details on who can file specific ITR forms:

ITR-1

ITR-1 form applies to resident individuals with a total income of up to Rs 50 lakh. Such individuals can report income from salary, one house property, income from other sources and agricultural income up to Rs 5,000 in the ITR-1 form.

Those who are filing ITR-1 now have to report details of every allowance, which has been claimed as exempt. Therefore, if a portion of the HRA has been claimed as exempt, its amount should be separately reported in the ITR. Similarly, any other allowance such as LTA (leave travel allowance) or leave encashment or gratuity claimed exempt must be reported too.

Details of income from other sources must be provided too. Interest income should be split between interest income from fixed deposits and interest income from a savings account.

The ITR-1 cannot be filed by a taxpayer who is a Director in a company or who has investments in unlisted equity shares at anytime during the financial year. Such a taxpayer must use the ITR-2 or ITR-3 form to file their ITR for FY 2018-19.

ITR-2

ITR-2 applies to taxpayers who are individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. Also, taxpayers who are not eligible to file ITR-1 can file ITR-2.

Additional disclosures related to days present in India for residential status has to be provided. A taxpayer has to furnish details of days of stay in India in the previous year, during the preceding four years etc, and in case of non-residents, a taxpayer has to additionally furnish details of the jurisdiction of residence outside India and taxpayer identification numbers of such a country.

Also, a taxpayer who is a Director in a company has to furnish his Director Identification Number (DIN) and mention the details of companies against it with PAN details. In case of a taxpayer having held investments in unlisted equity shares at any time during the financial year, the details of the investee company with PAN, movement in the investment i.e. sale purchase and details of face value, purchase price etc. have to be furnished.

An alternate minimum tax (AMT) is levied on non-corporate taxpayers who claim certain profit-linked deductions against business income. Such taxpayers have to pay tax at the rate of AMT when the income-tax under the normal provisions is lower than AMT. Schedule AMT and alternate minimum tax credit (AMTC) have been introduced for furnishing the income-tax computation under the alternate minimum tax mechanism prescribed under section 115JC.

The form ITR-2 also requires detailed disclosures for various transactions. In the case of donations, segregation into cash and other modes have to be provided; for immovable property sold, the address of the immovable property sold with buyer's details such as PAN; in case of agricultural income exceeding Rs 5 lakh, the location and ownership details of agricultural land must be provided.

ITR-3

ITR-3 is applicable to individuals and HUFs having income from profits and gains of business or profession. A taxpayer who is a Director in a company or who has had investments in unlisted equity shares at any time during the financial year and earns income from business or profession will have to file ITR-3. The additional information and details required in ITR-2 also apply to a taxpayer who has to file in ITR-3.

ITR-4

ITR-4 is applicable to taxpayers who are offering income for tax on a presumptive basis. Taxpayers having a total income up to Rs 50 lakh can file ITR-4. A resident individual who is a Director in a company or who has investments in unlisted equity shares cannot file ITR-4.

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/leased/hired, tonnage capacity of goods carriage (in MT) etc in new ITR-4.

(The author is Founder & CEO, ClearTax)

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