The tax department has notified new income tax return (ITR) forms for assessment year 2021-22 (AY22). It has said in the notification that it has not made any significant changes this year due to the pandemic. However, there are certain tweaks that have been brought in line with the changes in the Finance Act, 2020. Here are some of the significant ones that you should take note of.
In the Finance Act, 2020, dividends were made taxable in the hands of the taxpayers instead of dividend distribution tax to be deducted by the company or payment or declaration of dividend. The dividend income has to be disclosed under “income from other sources".
“Until AY21, only dividend income that was not exempt was required to be disclosed in the section ‘income from other sources’. Now, all types of dividend incomes are required to be disclosed here," said a note on changes in ITRs from Taxmann, a tax research firm.
Earlier, dividend income up to ₹10 lakh was exempt from tax under Section 10(34). Taxpayers were required to show such income under the exempt income section. The reference to dividend income up to ₹10 lakh from a domestic firm has been removed from the exempt income section.
In FY20, the government introduced a new concessional tax regime under Section 115BAC, which gave taxpayers the option to pay tax at lower slab rates but forgo around 70 deductions. In Part A of the tax forms, the taxpayer is required to choose if he or she is opting for the concessional tax regime under Section 115BAC.
