New ITR forms for assessment year (AY) 2019-2020 have been notified by the Income Tax Department. Like the previous year, this year too we are having seven ITR forms. You can log in to the Income Tax Department’s e-filing portal to download ITR-1 and ITR-4 as they have been made available and other ITR forms are expected to be made available shortly. Every year the department notifies updated ITR forms, where the new forms show changes made in tax provisions in accordance with the previous fiscal year. There are 10 heads under which changes have been introduced for AY2018-2019.

  1. Eligibility of applicant: Those individuals whose total income is up to Rs 50 lakh from sources like salary, one house property, interest income and agricultural income up to Rs 5000 can only file the return in ITR-1.As stated by Shailesh Kumar director of Andersen Global, a chartered accountancy firm ITR-1 can’t be used anymore by the director of a company or has investments in unlisted equity shares or has income on which TDS has been deducted in another person’s hand. Also, ITR-4 is applicable only by Hindu Undivided Families and firms(other than LLP) having total income up to Rs 50lakh and choose to file their ITR under presumptive taxation scheme. However, those individuals or HUFs who are non-resident and ordinarily residents, non-resident partnership firms, directors of companies or persons having an investment in unlisted equity shares or having more than one house property can no longer file this ITR.
  2. Contact Details: It is mandatory to mention Indian address and mobile number while filing returns in ITR-1 forms. As stated by Tapati Ghose, partner, Deloitte India, here the intention is to enable hassle-free communication with the tax department. But whether it is compulsory in other forms will be known once the instructions are released.
  3. Salary Prerequisite: Along with stating the salary details you also need to disclose other components of your package. Standard Deduction from salary was introduced from April 1, 2018, since then respective changes have been made in ITR forms said Sandeep Sehgal, director, tax and regulatory, Ashok Maheshwary & Associates LLP, a chartered accountancy firm. Ghose also stated that salaried employees have to report the value of perquisites, profit in lieu of salary, exempt allowances and also deductions for entertainment allowance, professional tax and standard deduction separately. This requirement is mainly to sync in details mentioned in FORM 16. Earlier a mismatch between FORM 16 and ITR resulted in queries from the CPC. So additional care has been taken to ensure any mismatches are well analyzed so that any questions raised by the tax office is responded effortlessly, added Ghose.
  4.  House Income: Till now if you had more than one self-occupied house then only one was considered as self-occupied and others were considered as deemed to be let out where you were needed to pay tax on the potential rent of such property. However, Budget 2019 has relaxed this provision and from these fiscal two properties is considered as self-occupied. This relaxation in the rule will come into force from next AY, the required changes have already been made in the new ITR form. “A new option to select “deemed let out” is provided in ITR-1 and ITR-4. Also, the PAN (Permanent Account Number) of the tenant has to be provided in ITR-2 in case TDS is deducted by the tenant,” said Ghose.
  • Capital Gains: As per income tax rules, a property buyer deducts TDS at the rate of 1% if the value exceeds Rs 50 lakh. An amendment has been made in the ITR forms to disclose such information by the seller. Disclosure of buyer’s information is compulsory if tax is deducted or PAN is quoted by the buyer in documents. The mandatory disclosure includes the name and PAN of the buyer, the percentage share, the amount and the property address,” said Ghose. Respective changes have been made in the ITR forms since long term capital gains on listed equity shares and equity-oriented funds are taxable from 1 April 2018, added Sehgal
  • Other Sources of Income: Provide detailed information for income earned from other sources like interest income. Detailed information regarding such sources is required. Therefore, “Separate disclosures have been made mandatory for interest income from bank savings account, fixed deposits, and income tax return in the nature of pass-through income or others,” said Ghose.
  • Residential status: Travelling frequently out of the country?? Then provide more details as a self-declaration on the residential status of an individual is insufficient. Now the income tax department wants individuals to report the number of days spent inside and outside India, added Kumar. An individual is considered as a tax resident if he or she is present in India for at least 182 days or more in an FY, 60 days or more in an FY,365 days or more during the preceding four Fys. Income is chargeable to tax in India based on an individual’s residential status.
  • Details for NRIs: Now NRIs need to also file their returns in India if they have a source of income based in India. They are required to fill some additional information in new ITR forms such as mentioning the country of residence, taxpayers’ identification number, the number of days of stay in India in case of an Indian citizen or a person of Indian origin (PIO). Such details will help the assessing officer seek additional information as required with respect to overseas income and whenever required through the exchange of information and determine whether income has escaped taxation, added Ghose.
  • Foreign possessions: Previously, in the last few years many amendments have been made in income tax rules by the government in order to gather information about foreign assets held by Indians. Taking the legacy forward this year’s ITR forms have several new provisions. Details of Foreign depository accounts are also required along with details of Foreign Bank accounts. Ghose said, ”Details of foreign custodial accounts, foreign equity and debt held and foreign cash value insurance contract details have to be reported separately in the tax return forms”. Disclose all details required as inadequate or non-disclosure of such information can land you in trouble.
  • Other Changes: Various other changes introduced in ITR forms are if you have donated to charitable organizations then you will have to disclose the number of such donations made in cash and other modes separately. Senior citizens having interest income and claiming deduction under Section 80TTB have to report it in the space provided. Agricultural income above Rs5 lakh required to mention details such as district name with a PIN code, measurement of the land, whether the land is owned or leased and whether it is irrigated or rain-fed and so on. Though income-tax assesses will have to divulge more information while filing the ITR this year, many experts believe that it will reduce queries or scrutiny by the income-tax departments.