Important changes in ITR-1 Form for A.Y. 2020-21

Introduction

Central Board of Direct Taxes (CBDT) has recently notified the Income-Tax Return (ITR) Forms ITR-1 To ITR-7 & manner of furnishing Return of Income for Assessment Year (A.Y) 2020-21 vide Notification No. 31/2020 dt 29/05/2020. ITR-1 and ITR-4 have also been made available for e-filing on the e-filing portal i.e. incometaxindiaefiling.gov.in

Here in this article only ITR-1 has been discussed as to its applicability, new changes made in the forms and other matters requiring consideration before filing the ITR. Most of the salaried assessees  file their Income Tax Return in ITR-1.

Who are eligible to file ITR-1

ITR-1(also called Sahaj )is for individual assesses being  resident in India and having total income upto Rs. 50 lakhs and having income from salaries, income from one house property, income from other sources ( interest ) etc. and agricultural income upto Rs. 5,000/-. Thus it is not applicable for assesses who are having income from business or profession, income from more than one house property, income from capital gains, income from other sources like gambling , betting etc and agricultural income more than Rs. 5,000/-

The ITR -1 cannot also be used by an individual who is a director in a company ,or who has held any unlisted equity shares at any time during the previous year, or who has any asset(including financial interest in any entity) located outside India ,or who has signing authority in any account located outside India, or who has any income from any source outside India.

New changes in ITR-1 Form

 1.Insertion of new Schedule DI  i.e details of investments

 Due to the COVID-19 pandemic & subsequent lockdown, many assesses could not invest in eligible deductions  by 31^st March, 2020 relevant to the Assessment Year 2020-21.  However, Government  has since allowed assesses to make investments for Financial Year 2019-20 till 30th June ,2020 .Accordingly ,if the investments are made  by 30^th June,2020, the same will be considered as eligible deductions for A.Y 2020-21. For this a new Schedule namely, DI has been inserted in the ITR-1. In this schedule the assessee has to show separately  section wise details of investments under Chapter VIA-B of Income Tax Act which include Sec. 80C ,( LIC, PPF, NSC, etc), 80D (Medi claim)  80G (Donation)etc.  made during the period from 1.4.2020 to 30.6.2020 alongside the total eligible investments for the A.Y. 2020-21.

2.Extra information to be provided in Basic Information for select assesses

As per insertion of 7^th Proviso to Sec. 139 (1) of the Income Tax Act vide Finance(No.2)Act, 2019 effective from 1.4.2020(A.Y.2020-21), a mandatory obligation has been cast on a person to file the I.T Return even if his total Income is less than  the maximum amount which is not chargeable to tax, if such person has deposited more than  1 crore in one or more current accounts maintained with banks, or incurred more than Rs. 2 lakhs on foreign travel or spent Rs. 1 Lakh on electricity consumption during the previous year

For this a new check point is inserted in PART A-General Information of ITR-1, primarily to cross confirm the applicability of 7^th Proviso to Section 139 (1) as aforesaid. In regular cases, this information needs  to be filled up only by the assessee who is otherwise not liable to file the I.T. Return but fulfills either of the  three conditions as stated above.

3.Insertion of Schedule 80D for claiming mediclaim premium

A new schedule 80D has been inserted to calculate total eligible deduction under Section 80D for mediclaim premium with various sub heads. Earlier 80D deduction was part of the Schedule “Part C-Deduction & Taxable Income” . Under the new schedule assessees  have to answer  questions like:

a) Whether you or any of your family members(excluding parents) is a senior citizen?

b) Whether any of your parents is a senior citizen?

and then details of premium paid under sub heads like health insurance and preventive health check up are separately asked and finally total eligible claim under Section 80D calculated.

4. Major Change in ITR-V i.e ITR Acknowledgement

 After filing the I.T. Return, the acknowledgement generated will not show any details of income, deduction, tax payable, refundable etc. But will only show the details of assessee and acknowledgement number and verification part. The figures will show only after the ITR is either e-verified or sent to CPC and received by them.

The due date of filing Income Tax Returns has been extended from 31^st july,2020 to 30th November,2020. Hence, there is sufficient time to file the ITR Return. It is advisable to file the return only after getting the entire details in hand more particularly Form 16 and Form 26AS.As the due date of submitting TDS returns has also been extended upto 30.6.2020, the Form 26AS will be available after some time and so will Form 16 .It is also advisable to match the TDS reflected in Form 16 with TDS in Form 26AS to avoid any mismatch .They are also advised to make the required investments by 30th June,2020 to avail the eligible deductions, if not done earlier.

 Happy Return filing.