All the new details required in income tax return forms for FY18-19
April, 15th 2019
The Central Board of Direct Taxes (CBDT) kickstarted the annual income tax return filing ritual recently. The new income tax return (ITR) forms for the assessment year 2019-20 come with a set of changes—essentially more detailed disclosures— taxpayers have to contend with. “The idea is to check evasion and eliminate loopholes,” says Alok Agarwal, Partner, Deloitte India.
While the last date for filing returns is 31 July, the changes and penal clauses for late filing mean one should start the process as soon as possible. Read on to understand the revisions in ITR 1 and 2 – the forms most relevant for individual, salaried taxpayers as well as pensioners. While ITR 1 and ITR 4 are already available on incometaxindiaefiling.gov.in for online filing, the others will be uploaded in due course.
New look ITR 1 The forms take into account announcements made during the Union Budget 2018-19. A field for standard deduction has been introduced—you can claim a flat deduction of Rs 40,000. Likewise, senior citizens can claim exemption of up to Rs 50,000 on interest from savings, fixed deposits as well as post office deposits.
This apart, the form asks taxpayers to specify the nature of income from other sources. Until last year, you only needed to mention the figure. You will also have to furnish details of any exempt income and the clause under which the tax benefit is allowed. This includes HRA claimed during the year.
More disclosures ITR 2 now requires detailed information on the number of days spent in India while declaring the residential status. Until 2018-19, you had to simply choose between resident, resident but not ordinarily resident and non-resident options.
Non-resident taxpayers will have to report their overseas residency information along with taxpayer identification number. “Overseas Citizens of India (OCI) or Persons of Indian Origin (PIO) selecting residential status as ‘non-resident’ in India are required to report the actual number of days in the relevant financial year and also in the last four financial years immediately preceding the year,” says Kuldip Kumar, Partner, PwC.
House buyer’s information If you have sold an immovable property, be prepared for tighter scrutiny. “You will have to mention the buyer’s name, PAN, transaction price and the address of the property,” says Archit Gupta, Founder and CEO, Cleartax.in. In case of multiple buyers, the seller will have to share details of each, along with share in ownership and amount. “The objective is to corroborate information provided by the seller and minimise scope for misreporting,” says Agarwal.
Changes in ITR forms relevant to salaried taxpayers ITR 1 (Sahaj) Use if... You are an ordinarily resident invidividual with income from salary, pension and interest of up to Rs 50 lakh, agricultural income of up to Rs 5,000, and own one house. Do not use if... You are a director in a company or have invested in unlisted shares; or have capital gains/losses to declare.
ITR 2 Use if... You are a salaried individual or a pensioner who cannot use ITR 1. Do not use if... You draw income from any business or profession.
Restrictions on use of ITR 1 If you have invested in unlisted shares, you cannot use ITR 1 this year. It cannot be used by an individual who is a director in a company either. The form is relevant if your agriculture income is less than Rs 5,000. If it crosses this threshold, use ITR 2.
Disclosure of unlisted shares In ITR 2, you have to provide details of all unlisted shares you hold. You will have to furnish the companies’ names, PAN, number of shares held by you, cost of subscription or purchase, issue/purchase price per share, shares transferred during the year and closing balance. “This could mean that unlisted companies’ employees, who have exercised their employee stock options (ESOPs), will also have to declare their holdings,” notes Gupta of Cleartax.
Other changes ITR 1 (Sahaj) Furnish details of exempt income like HRA and specify nature of income from other sources. Field for standard deduction and exemption on interest from bank and post office deposits under Section 80TTB introduced.
ITR 2 Detailed information on number of days spent in and out of India to determine residential status. Disclosure of information on unlisted shares. Disclosure of house buyers, details in case you have sold a property. Furnish details related to agricultural income including ownership, size, location and address and status on irrigation.
Agricultural income Income from agriculture is another focus area in the forms this year. “Agricultural income exceeding Rs 5 lakh is now to be reported separately along with additional details such as name of the district with pin code, measurement of land, whether owned or leased and whether irrigated or rain-fed under the ‘exempt income schedule’,” says Kumar.