This article shall provide an insight into changes in Income tax forms, additional disclosures required by income tax department and main considerations while filing Income tax returns. It is advisable for us to begin the groundwork and avoid the late hour rushes because new ITR forms require additional details and disclosures.  

AADHAAR and PAN interchangeability for filing ITR: 

Until now PAN was mandatory for filing income tax return. However, for ease of taxpayers PAN and Aadhaar are being made interchangeable. Now if an assessee does not have PAN income tax return can be filed through a valid Aadhaar card. However, income tax return e-filing requires prior registration on Income tax site which still requires a valid PAN. It is therefore expected that required changes would be made on the Income tax portal to enable registration through Aadhaar only. 

AADHAAR PAN Linking: 

Deadline for Aadhaar PAN linking is 30th June 2020. This will enable the assessee to verify his return through Aadhaar OTP. 

FACILITY OF INSTANT PAN:  

This facility enables paperless, free of cost facility using beta version. To use this facility mobile number should be registered in UIDAI database I.e. on Aadhaar. Individuals (except minors) with a valid Aadhaar number with updated mobile number can avail this facility. Also, complete date of birth is mandatory for availing instant PAN facility. 

NEW INCOME TAX RETURN FORMS:  

The new ITR forms have introduced certain additional disclosure and columns to capture essential information. 

1. NEW SCHEDULE DI: This schedule has been added requiring an assessee to furnish the details of investments made for the extended period from April 2020 to June 2020. COVID 19 has resulted in providing this additional time for 3 months allowing deduction to tax payers even after the end of the financial year. This has been probably added separately to avoid bogus deductions or double deductions by explicit providing deductions under chapter VI for this financial year and not for any prior or subsequent financial year. 

2. SEVENTH PROVISO TO SECTION 139(1): This proviso includes the category of persons who are not required to file their income tax return because their income falls under the maximum exemption limit but have entered into any following transaction: 

I) The assessee has deposited more than Rs 1 crores in one or more current accounts. It is imperative to note that the amount deposited does not mean cash deposited so even if your credit side of current accounts is more than Rs 1 crores even if your income falls below the minimum Then the person is required to file the return Also, the limit is for aggregate number of current accounts. For e.g.: A person has 4 current accounts and 26 lakhs is deposited in each current account then he shall be required to file return even if his income falls below the threshold limit chargeable to tax.

II) The assessee has incurred expenditure of an amount or aggregate of amount exceeding Rs 2 lacs for travel to a foreign country for himself or any other person. The limit for 2 lacs is not per person but for a person and any other person for whom he incurs such travel expenditure.

III) The assessee has incurred expenditure of amount or aggregate of amount exceeding Rs 142 1 lacs on consumption of electricity during the previous year. 

NOTE: The seventh proviso to section 139(1) is not applicable to a company and firm. It is applicable to an individual, HUF, AOP or body of individuals whether incorporated or not or an Artificial judicial person. ITR 1 cannot be used by persons covered by proviso 7 to section 139(1). 

3. FURNISHING OF DOCUMENT IDENTIFICATION NUMBER/ UNIQUE IDENTIFICATION NUMBER: If a person has filed a response U/S 139(9) I.e. defective return, U/S 142(1) with response to notice for non-filing of returns, furnishing additional info. Or statement of assets and liabilities or U/S 148 with response to notice under Income escaping assessment or Notice u/s 153A, 153C under search assessment or under section 119(2)(b) in response to condonation of delay for filing income tax return he shall enter document identification number & date of such notice or order. 

4. INELIGIBILITY FOR ITR-1: Assesses having income taxable under section 115BBDA (dividend from domestic company above Rs 10 lacs. 

5. PAN/AADHAR NO MANDATORY: ITR 2 requires indicating the Aadhaar Number or PAN of the deductee where the taxpayer has withheld taxes on rent paid exceeding Rs 50000 under section 194IB or purchase of property u/s 194I. 

6. SECTION 44 AE INCOME TAX ACT: In ITR 4 in section 44AE for presumptive income from goods carriages, the ceilings of maximum rows is removed and a new validation ‘Number of vehicles should not exceed 10 vehicles at any time during the year has been added. 

7. DETAILS OF GOVERNMENT EMPLOYEES: In ITR1 form details of government employees have been bifurcated in central, State government and a new type as ‘NA’ added to the list. 

8. CONCESSIONAL TAX REGIME: In ITR 6 form for companies a new drop-down utility to opt for concessional tax regime of 22% offered to corporates or new domestic companies under section 115BAA OR 115BAB through ordinance 2019. 

9. NON-REPATRIATION OF PRIMARY ADJUSTMENT: The new ITR forms 3, 5 and 6 have been amended to seek details pertaining to assessee’s choice of paying additional income tax in case of non-repatriation of primary adjustment within the prescribed time limit. 

10. AUDIT INFORMATION U/S 44AB: The new ITR forms 3, 5 and 6 seek details regarding audit information as per amended provisions of Section 44AB as amended by income tax act regarding whether you are liable for tax audit and if it is applicable, whether turnover/gross receipts of business exceeds 1crores but does not exceed 5 crores, whether aggregate of all receipts including revenue and capital receipts and payments including capital expenditure in cash does not exceed 5% of such receipts and payments. 

11. OPTION TO CHOOSE MORE THAN ONE ACCOUNT FOR REFUND: The assesse can choose more than one account for income tax refund. 

KEY CONSIDERATIONS WHILE FILING INCOME TAX RETURNS: 

1. EXEMPT INCOME: The income exempted from tax should not be ignored while filing ITR such as interest earned from PPF OR tax-free bonds, interest from post office savings account, agricultural income etc. 

2. INCOME FROM OTHER SOURCES: During COVID trend of online games has risen. Such income is to be taxed as income from other sources. Interest on income tax refund should not be forgotten. 

3. JOINT OWNER OF PROPERTY/BANK ACCOUNT: The details of co-owners, their respective shares should be disclosed, PAN/AADHAAR of the co-owners. 

4. DETAILS OF BUYER: In case of sale of immovable property and subsequent capital gains details of buyer are to given I.e. name of buyer, PAN/ AADHAAR of the buyer or buyers, PIN code. 

5. CORRECT ITR FORM: Choose the correct ITR form to avoid notice under section 139(9). 

6. AGRICULTURAL INCOME: If such income exceeds 5 lacs, details are required to be furnished such as place where such land is situated, PIN CODE, Acres of land and whether land is leased or owned, irrigated or rain fed. 

7. ASSET AND LIABILITY: The assesses (Individuals and HUF’S) whose total income exceeds Rs 50 lacs even if are not carrying on any business or profession are required to file schedule AL disclosing assets and liabilities in the returns. 

8. REPORT ALL BANK ACCOUNTS: Do report all bank accounts in which you are beneficiary or have signing authority. 

9. Information relating to foreign assets 

10. Disclosure of all retirement benefits like employee provident fund, leave encashment gratuity and pension should be disclosed in ITR. 

CONCLUSION: There has been lot of changes in ITR forms and additional disclosures requiring a lot of work to be done to avoid the eleventh-hour rush. Although the government has extended the due dates for filing income tax returns to October 2020 however, in current scenario a lot has been changed and also the uncertain circumstances need due consideration as taxpayers are surging who require early filing of their returns to claim their refunds. 

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