New ITR Forms Notified for the Financial Year 2020-21

Generally, the Income Tax Department provides notification about the income tax return (ITR) forms in the last week of March. However, this year, the department has fast-tracked the entire process and notified the general public about the new income tax return forms (Sahaj and Sugam) for AY 2020-21, in January to avoid any last-minute rush due to proposed significant changes. Below is some key information taxpayers must know.

ITR-1

• People with income up to ₹50 lakh need to file ITR-1. The income will include salary, one house property, interest, family pension, agriculture (up to ₹5, 000), etc.
• People with more than ₹1 crores bank deposits, foreign travel spending of 2 lakh or electricity bills of 1 lakh – cannot file ITR-1.

ITR-4

• Residents, HUFs and Firms with an income of 50 lakh from salaries,one house property, interest, family pension, agriculture (up to ₹5,000) etc. – can file ITR-4
• ITR-4 is to be filed by people with bank deposits of ₹1 crores, ₹2 lakh of foreign travel expenditure, electricity bills of ₹1 lakh or income under section 44AD 44ADA or 44AE

Note

• People who co-own a house property cannot file ITR-1 or ITR-4
• Taxpayers who are - either Directors in a company, hold unlisted equity shares, have losses from house property or need to file a return under 7th provision of Section 139(1) – cannot file ITR-1 or ITR-4

• Salaried employees get standard relaxation for ₹50, 000
• People with annual income below ₹5 lakh can file for tax rebate under section 87A
• TDS for interest on bank and post office deposits has been increased to ₹40,000
• People who have second-self occupied houses are eligible for tax exemption on notional rent

• Bank deposits of 1 crore or more
• Spending of 2 lakh or more on foreign travel
• Electricity bills of 1 lakh or more

• Partnership in a firm, if any
• Partnership details – name, PAN and partners (name, percentage share, PAN, Adhaar , etc.)

• New forms need taxpayer’s passport numbers
• A taxpayer who co-owns a house property, cannot file ITR-1 Sahaj or ITR-4 Sugam
• Though if the house property has been rented out, the taxpayer has to provide name and PAN/Aadhaar of the tenant
• Individuals who file ITR-4 must disclose:
• If ITR-4 is filed by a representative, Aadhaar details of the representative are needed
• Taxpayer filing ITR-4 need to disclose:
• In ITR-4, the taxpayer needs to disclose total opening cash and bank balance of all accounts, receipts, payments/withdrawals of the previous year

The changes have been made well in advance to allow better understanding and error minimizing in ITR filing.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.