Income tax assessees are set to come across certain changes in the income tax return (ITR) forms. The Income Tax Department has brought about certain changes in select ITR forms meant to be used for assessment year 2019-20. According to tax experts, some sections in the forms have been rationalised and reporting requirements increased. Individuals and businesses are required to file their income tax returns for the income earned in financial year 2018-19 using these forms: ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7. These seven forms - also known as ITR forms - were notified by the Income Tax Department earlier this month. (Also read: Quoting Aadhaar in ITR compulsory "unless specifically exempted", says Income Tax Department)
July 31 is the due date for filing income tax returns (ITR) for assessees not required to get their accounts audited.
Here are some of the key changes in the income tax forms applicable to individual assessees:
Section 80G changes
While there are no changes with respect to reporting of income eligible for benefit under Section 80C of the Income Tax Act, cash and non-cash donations eligible for deduction under Section 80G/80GGA need to be reported, say tax experts.
"The forms seek bifurcation between donation in cash and other mode for Section 80G deduction purposes," said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP.
Income tax forms - changes applicable to company directors
Individuals serving as a director in a company can no longer file the income tax return using Form ITR-1 or Form ITR-2. Such individuals will be required to furnish details such as the company's Permanent Account Number (PAN) and Director Identification Number (DIN), and mention whether the shares are listed or unlisted. Additionally, details on investments and transactions undertaken in relation to such shares will also be required.
"These changes appears to have been introduced to crack down on shell companies and checking on routing of black money," said Rishi Kapadia, partner, Dhruva Advisors.
Changes with respect to agricultural income
"In case of taxpayers earning agricultural income exceeding Rs 5 lakh, additional details of the agricultural land need to be provided such as name of district, land area, whether land is owned or leased, whether the land is irrigated or rain-fed," added Mr Kapadia.
Changes with respect to unlisted company shares
Income tax assesses will be required to furnish details of the investments held, acquired or transferred in unlisted equity shares during the financial year.
"An individual/HUF (Hindu Undivided Family) holding unlisted shares needs to disclose name of the company, opening number of shares, cost, details of shares acquired & sold during the year and closing number of shares and cost," said Gopal Bohra, partner, NA Shah Associates LLP.
Restrictions on ITR-1 and ITR-4
Form ITR-1 - also known as "Sahaj" - cannot be used by an individual serving as director of a company, having investments in unlisted equity shares, or having income on which TDS (tax deducted at source) has been deducted in another person's hands.
Form ITR-4 - or "Sugam" - cannot be used by individuals or HUFs non-resident, ordinarily resident, non-resident partnership firms, directors of companies or persons having investment in unlisted equity shares or having more than one house property.
Changes applicable to NRIs
Individual taxpayers are now required to select the applicable residential status rule based on the actual physical stay of the individual tax payer, say experts.
Overseas Citizens of India (OCI) and Persons of Indian Origin (PIO) qualifying as non-resident are required to report the actual numbers of days of stay in the country in the relevant financial year as well as preceding four years, Mr Kapadia explains.
Also, individuals qualifying as NRI need to report the jurisdiction of residence and Taxpayer Identification Number, he adds.
Changes with respect to sale of capital assets (immovable property)
In case of sale of immovable property during financial year 2018-19, details such as name, PAN, percentage share, the value of sale and address of the buyer need to be furnished.
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