Changes in ITR 4 for Assessment Year 2020-21

Eligibility to file ITR 4 for A.Y. 2020-21:

Individuals, HUFs and Firms (other than LLP) being a resident having:

1. Total Income upto Rs 50 Lakhs

2. PGBP income computed under sections 44AD, 44ADA or 44AE

3. Income from Salary / Pension

4. Income from ONE House Property

5. Income from Other Sources

6. Agricultural income upto Rs 5,000

Not eligible to file ITR 4 for A.Y. 2020-21:

1. Director of a company

2. Shareholder of unlisted company

3. An individual holding any asset (including financial interest in any entity) located outside India

4. An individual has signing authority in any account located outside India; or

5. An individual has income from any source outside India.

Additions in new ITR 4 for A.Y. 2020-21:

A. Assessee otherwise not required to file return, but filing ROI due to fulfilling one or more conditions mentioned in the seventh proviso to section 139(1):

To mark as Yes / No in Part – A

Seventh proviso of section 139(1) says:

1. Individual has deposited an amount or aggregate of the amounts exceeding Rs 1 crore in one or more current accounts;

2. Individual has incurred expenditure of an amount or aggregate of the amounts exceeding Rs 2 lakh for himself or any other person for travel to a foreign country; or

3. Individual has incurred expenditure of an amount or aggregate of the amounts exceeding Rs 1 lakh towards consumption of electricity

If you fall under any of the category, fill the amount in the relevant column.

B. Nature of employment in Part A: Government category is now further categorised under State Government and Central Government.

C. Schedule BP: Receipts through prescribed electronic mode is also added for the lower presumptive income rate of 6%.

D. Investment / deposit / payments between 01.04.2020 to 30.06.2020 for the purpose of claiming any deduction under Part B of Chapter VIA to be filled under Schedule DI.

E. There is a separate schedule 80D where deduction for medical premium is to be disclosed under separate components:

Whether the person or any of the family member (excluding parents) is a senior citizen? (Yes / No / not claiming for self/family)

Whether any one of the parent is a senior citizen? (Yes / No / not claiming for parents)

F. Part C:

New sections added-

80EEA – Deduction in respect of interest on loan taken for certain house property

80EEB – Deduction in respect of purchase of electric vehicle

Deduction u/s 80 CCG in respect of investment made under an equity savings scheme removed.

G. There is a NOTE under ­‘Taxes paid and verification’:

Submission date is the system date of e-Filing portal of Income Tax Department. The same is available in the Acknowledgement/ITR-V generated after submission of return.

Verification date is the date of e-Verification at e-Filing portal of Income Tax Department or the date of receipt of ITR-V at CPC, Bengaluru. The same will be available in View Returns/Forms option of e-Filing portal. In case of e-Verification, it is available in Acknowledgement.

As discussed under article – https://taxguru.in/income-tax/major-change-itr-acknowledgement.html There will first generate an ITR V and then an acknowledgement.

Other important points:

ITR 4 shall not be filed if assessee has:

1. to avail the benefit of carry forward and set of loss under house property;

2. loss under other sources;

3. any claim of relief under section 90 and/or section 91;

4. any claim of credit of tax deducted at source in the hands of any other person.

ITR 4 shall not be filed if assessee is governed by Portuguese Civil Code as per section 5A i.e., apportionment of income between spouses.

Income under the head other sources does not cover following:-

1. winnings from lottery;

2. owning and maintaining race horses

3. income taxable at special rates under section 115BBDA / section 115BBE

Further deduction u/s 57(iia) is allowed (i.e., in case of family pension only).

Due data of filing ROI : 30^th November 2020

Disclaimer: The contents of this article are for information purposes only and does not constitute an advice or a legal opinion and are personal views of the author. Readers are requested to check and refer relevant provisions of law, circulars, clarifications etc. before acting on the basis of the above write up.