Salaried individuals to brace up for new questions from tax authorities in tax returns

Salaried individuals to brace up for new questions from tax authorities in their tax returns

Are you salaried individual earning below INR 50 lakhs per annum filing the simple ITR-1? Still get ready to answer the new questions that the tax authorities would seek from you for this year onwards.

The income tax department yesterday opened the window for e-filing of income tax returns (ITR) for financial year 2019-20 (Assessment Year 2020-21) for those using ITR-1 form, the deadline for filing having already been extended to November 30^th 2020.

Also known as Sahaj, the two-page ITR-1 form is primarily used by salaried individuals earning up to ₹ 50 lakhs in a year.

This form can also be used by those having income from other sources like interest, dividend income etc. and those having income from only one house property.

However, individuals who are either a Director in any Company, whether listed, unlisted, private or public; or who have invested in unlisted equity shares cannot avail the benefit of filing their Income Tax returns through this form.

Simple as it may look to file through this return, this year’s ITR 1 form has three additional questions for taxpayers seeking details of deposits in current account, foreign travel spending and electricity bills.

These are the three new questions in ITR 1 form:

1) Have you deposited amount or aggregate of amounts exceeding ₹ 1 Crore in one or more current account during the previous year? – To be answered in: (Yes/No)

2) Have you incurred expenditure of an amount or aggregate of amount exceeding ₹ 2 lakhs for travel to a foreign country for yourself or for any other person? – To be answered in: (Yes/ No)

3) Have you incurred expenditure of amount or aggregate of amount exceeding ₹ 1 lakh on consumption of electricity during the previous year? – To be answered in: (Yes/No)

Taxpayers would also be required to furnish details of tax saving investments or donations made during 1st April 2020 to 30th June 2020 for FY 2019-20 separately, in terms of relaxation granted by the finance ministry due to COVID-19 and subsequent lockdown.

You may recollect that the Finance Ministry had earlier declared that if you have missed making some investment or payments under Section 80C, (LIC, PPF, NSC, etc), 80D (mediclaim) and 80G (donations) till March 31, you have time to do so till June 30 and still claim tax benefit for the last financial year.