Changes in Income Tax Return (ITR) Forms for AY 2020-2021

What are the changes in ITR notified by CBDT this year?

Like every year, CBDT has notified some major changes in ITR forms for AY 2020-21. The major changes made this year in all ITR seek certain questions to be answered by the taxpayers, questions related to expenses like

• Deposits made over Rs 1 crore in their current accounts,
• Expenses over Rs 2 lakh during international travel or
• Electricity expenses of over Rs 1 lakh.

In this article, I have discussed important changes made in ITR Forms by comparing old ITR with new ITR applicable for A.Y. 2020-21.

Table of contents:

1. Changes in Form ITR-1 Sahaj for AY 2020-21

Changes in Applicability Criteria

There is no change in the applicability criteria for ITR 1. It is applicable as usual on

• Individuals having total income of up to Rs 50 lakh
• Having income from salaries
• One house property
• Other sources (like interest), and
• Agricultural income up to Rs 5,000

Changes in Form

1. Disclosure of high-value transactions

Under PART A-General Information, a new checkpoint is inserted in the basic information of ITR-1 to verify the high-value transactions. It is applicable only for the person who is required to file a return of income under 7th proviso of section 139(1) but otherwise not required to file their return of income.

Therefore, when a person enters into certain high-value transactions like

• deposited more than Rs 1 crore in a current bank account in a year or
• have incurred more than Rs 2 lakh on foreign travel or
• have spent more than Rs 1 lakh on electricity,

The person is required to compulsorily file a return even though his income is lower than the basic exemption limit.

2. New Schedule DI i.e. Details of Investments

Now, there is a separate schedule for disclosure of investments, deposits and donations made in FY 2019-20 till 31st July 2020 due to the Covid-19 pandemic.

2. Changes in Form ITR-2 for AY 2020-21

Changes in Applicability Criteria

There is no change in the applicability criteria for ITR 2. It is applicable to

• Individuals and
• HUFs not having income from profits and gains of business or profession

Changes in Form

1. Disclosure of high value transactions

Under PART A-General Information, a new checkpoint is inserted in the basic information of ITR 2 to verify the high-value transactions. It is applicable only for the person who is required to file a return of income under 7th proviso of section 139(1) but otherwise not required to file their return of income.

Therefore, when a person enters into certain high-value transactions like

• deposited more than Rs 1 crore in a current bank account in a year or
• have incurred more than Rs 2 lakh on foreign travel or
• have spent more than Rs 1 lakh on electricity,

he is required to compulsorily file a return even though his income is lower than the basic exemption limit.

2. Additional information on the representative assessee

In case the return is filed by the representative assessee, now you are also required to give the Aadhaar details of that representative assessee.

3. New Schedule 112A

It was earlier named as Tool 112A. This schedule is for disclosure of sale of equity share in a company or unit of equity-oriented fund or unit of a business trust on which STT is paid under section 112A.

4. Changes in Schedule CFL

In schedule CFL i.e. carry forward of losses, now there is a requirement of bifurcation of loss details in two columns mainly Normal loss and PTI. This bifurcation is required for House Property, Short Term Capital Gains and Long Term Capital Gains.

5. Changes in Schedule PTI

There are some additional disclosures made under schedule PTI, which are as follows:

• Investment entity covered by section 115UA/115UB

• Bifurcation of income from house property, capital gains and other sources as per the following 3 ways:

○ Current year income
○ Share of current year loss distributed by Investment fund
○ Net Income/ Loss

6. Bank details of Non-Resident

Now there is separate disclosure for Bank accounts in case of Non- Resident who are claiming income-tax refund and not having a bank account in India may, at their option, furnish the details of one foreign bank account which are as follows:

• SWIFT Code
• Name of the Bank
• Country of Location
• IBAN

Earlier, there was the disclosure of details about Tax Return Preparer (TRP) under Part B-ITI in old ITR which is omitted in new ITR.

7. New Schedule DI i.e. Details of Investments

Now, there is a separate schedule for disclosure of investments, deposits and donations made in FY 2019-20 till 31st July, 2020 due to the Covid-19 pandemic.

3. Changes in Form ITR-3 for AY 2020-21

Changes in Applicability Criteria

There is no change in the applicability criteria for ITR 3. It is applicable on Individual & HUF having Business Income.

Changes in Form

1. Disclosure of high-value transactions

If you have enter into any of certain high-value transactions like

• deposited more than Rs 1 crore in a current bank account in a year or
• have incurred more than Rs 2 lakh on foreign travel or
• have spent more than Rs 1 lakh on electricity,

You are required to compulsorily file a return under seventh proviso of section 139 even though your income is lower than the basic exemption limit.

2. Additional details of Tenant

Now, you can also give Aadhaar details of Tenant, Co-owners if available.

3. New Schedule 80D i.e. Details of Deductions

Now, there is a separate Schedule 80D for the purpose of claiming deductions under section 80D.

4. New Schedule TPSA i.e. Tax on Secondary Adjustments as per Section 92CE (2A)

A new point is inserted in PART A-BS. If you have opted for Section 92CE then you are required to fill Schedule TPSA.

This Schedule is required when the excess money or part thereof has not been repatriated to India on time, then option, pay additional income-tax at the rate of 18% on such excess money or part thereof, as the case may be.

5. New Schedule DI i.e. Details of Investment

This new Schedule will allow taxpayers to claim certain tax-saving investments, deposits or payments for FY 2019-20 till 31st July 2020 due to this pandemic situation.

4. Changes in ITR-4 Sugam for AY 2020-21

Changes in Applicability Criteria

There are no changes in the applicability criteria of ITR-4. It is applicable for:

• Individuals,
• HUFs and
• firms (other than LLP) having a total income of up to Rs 50 lakh and having presumptive income from business and profession which is computed under sections 44AD, 44ADA or 44AE.

Not applicable for:

Individual who is either Director in a company or has invested in Unlisted Equity Shares

Change in the new form:

1. High-value transactions

If you have enter into any of certain high-value transactions like

• deposited more than Rs 1 crore in a current bank account in a year or
• have incurred more than Rs 2 lakh on foreign travel or
• have spent more than Rs 1 lakh on electricity

You are required to compulsorily file a return under seventh proviso of section 139 even though your income is lower than the basic exemption limit.

2. Additional information on the representative assessee

Under PART-A, In case return is filed by the representative assessee you are also required to give Aadhaar details of that representative.

3. New Schedule DI i.e. Details of Investments

This new schedule will allow taxpayers to claim certain tax-saving investments, deposits or payments for FY 2019-20 till 31st July 2020 due to this pandemic situation.

4. New Schedule 80D

Now, there is a separate Schedule D inserted for the purpose of claiming deductions under section 80D.

Pre-validation of Bank Account

It is now mandatory to validate your bank account if you want to claim ITR refund. You have to link your account with Aadhaar no, PAN and mobile no.

You can validate your bank account by login to the Income Tax website. There is an option of pre-validate bank account under profile settings.

Conclusion:

So, you need to be a little careful about new disclosures made this year while filing a return of income.

Your thoughts and suggestions are always welcome!