Decoding the Latest Changes in ITR Forms for AY 2019-20

Recently, the Income Tax Return (ITR) Forms were updated. Henceforth, taxpayers are obliged to mention a few more details, such as the number of days they reside in India, the number of shares holding in unlisted shares and details of the buyers of a property in case the property is immovable and seller has capital gains. 

1· Changes in the ITR-1 Form

ITR-1 Form is a tax filing form, which is applicable to individual residents except for the company's director or the shareholder of an unlisted equity. The total income of the individual should not be more than Rs 50,00,000. Due to the introduction of standard deduction worth Rs 40,000 in financial year 2018-19, a new row has been added to the form for mentioning it.

The taxpayer needs to mention income details, such as the interest income earned on the savings account, deposits made in bank, income tax refund, income from family pension and more under the column "Income from other sources" of the new ITR-1.

If there is any allowance exempted fully/ partially, then its amount is supposed to be there stated separately in ITR-1.

2· Changes in ITR-2 Form

Taxpayers who are HUFs (Hindu Undivided Family) or individuals who do not have any profit earned as income from business/ profession use ITR-2 Form to file their return.

ITR-2 has notified recently that taxpayers will need to mention their residential status for FY 2018-19. An individual can be a resident, an ordinary resident or can be a non-resident in the finance year that needs to be mentioned for tax purpose.

The taxpayer should provide an in-depth information with respect to the days he/ she stayed in India in order to determine their residential status. Moreover, in the segment Section 80G (Donations), you must mention both cash and non-cash payment differently.

3· Changes in ITR-4 Form

An ordinary resident or resident of India can file their Income Tax Return-4 Form if their cumulative income is less than Rs 50,00,000.

People who have invested in equity shares of unlisted company during financial year 2018- 19 or the director of a company are no longer eligible to file their returns via ITR-4 Form, as they have to file their ITR via Form 3.

A taxpayer who is holding a business of hiring, plying or leasing goods carriages and have already applied for the Presumptive Taxation Scheme u/s 44AE will need to furnish details like registration number of goods carriage, whether it is owned, leased or hired, goods carriage capacity in tons (in MT) and many more in ITR- Form 4.

Another new change which got recently introduced is that only the taxpayers aging above 80 years (super senior citizens) filing ITR- 1 form or ITR-4 form are eligible for offline tax filing. Other than them, all the other taxpayers must file their ITR online.

In addition to this, the taxpayers with an income less than Rs 5,00,000 who have a refund due are prohibited to file their Income Tax Return through offline mode starting from financial year 2018- 19.

How to File your new ITRs?

It is necessary for every taxpayer to file their ITR online, except for the super senior citizens having no income from a business or from a profession. If you are eligible to have an Aadhaar card, then your Aadhaar card and PAN card should be linked together. Soon the employer will provide the Form-16 and employees can initiate filing their ITR online for FY 2018- 19 by uploading Form-16.

Although you have information regarding all the income you received and investments you made during the financial year, there are chances that you may miss out on some tax benefits. Therefore, it is highly advisable to hire a tax expert to file your return online.