Tax Filing 2020: This time, it seems the tax filing season has come early. Every year the government notifies the Income Tax Return (ITR) forms sometime in April. However, this time, the government has already notified two ITR forms in the first week of January 2020 itself. The two ITR Forms for AY 2020-21 notified by CBDT are ITR-1 Sahaj and ITR-4 Sugam. By notifying the ITR Forms early in the year, the taxpayers will get to know about any new disclosures and information that they may have to make while filing their tax return.
It should be noted that online filing of ITR has become mandatory for most taxpayers, which is possible on the income tax website of the government through the Return Filing Utility. Therefore, even though the ITR forms are notified, the actual filing has to wait.
Understandably so, because for the income earned during the financial year 2019-20, the assessment year is 2020-21. For the income that one earns from April 1, 2019, to March 31, 2020, the filing of ITR has to happen in the assessment year 2020-2021, the last date of which is generally July 31 of the relevant assessment year unless extended by the government. “ITR forms have been notified, however, online filing facility will be released later. ITR forms such as ITR-2 and ITR-3 should also be released simultaneously. Usually, this exercise takes place in April. However, early release of forms and utility will help taxpayers comply on time,” says Archit Gupta, Founder, and CEO, Cleartax.
5 new disclosures that the Income Tax Department is seeking in these two forms are:
1. House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR4.
2. Passport: One needs to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.
3. Cash deposit: For those filing ITR 4-Sugam, it has been made compulsory to declare the amount deposited as cash in a bank account, if such amount exceeds Rs 1 crore during the FY.
4. Foreign travel: If you have spent more than Rs 2 lakh on travelling abroad during the FY, you need to disclose the actual amount spent.
5. Electricity consumption: If your electricity bills have been more than Rs 1 lakh in aggregate during the FY, you need to disclose the actual amount.
“ITR-1 is applicable for individuals having Income from Salaries, one house property, interest income etc. up to Rs 50 lakh. As per the newly-introduced ITR-1 form for A.Y. 2020-21, if a taxpayer owns a house property with two or more persons or has deposited more than Rs 1 crore in a bank account or has spent more than Rs 2 lakh on foreign travels or has paid electricity bills of more than Rs 1 lakh can not file the ITR-1,” says CA Abhishek Soni, Founder, tax2win.in.
Who can file ITR 1 Sahaj
The ITR 1-Sahaj is for individuals being a resident (other than not ordinarily resident) having a total income up to Rs 50 lakh, having Income from Salaries, one house property (single ownership), interest income, family pension income etc. and agricultural income up to Rs 5,000.
Who cannot file ITR1 Sahaj
It is not for an individual who is either Director in a company or has invested in unlisted equity shares or has any brought forward / carry forward loss under the head ‘Income from House Property’ or has to furnish return under 7th provision to section 139(1) of the Income Tax Act.
Who can file ITR 4-Sugam
ITR 4-Sugam is for Individuals, HUFs and Firms (other than LLP) being a resident having total income up to Rs.50 lakh, one house property (single ownership), having income from business and profession which is computed under sections 44AD, 44ADA or 44AE or Interest Income, Family pension etc. and agricultural income up to Rs.5,000.
Who cannot file ITR 4-Sugam
It is not for an individual who is either Director in a company or has invested in unlisted equity shares or has any brought forward / carry forward loss under the head ‘Income from House Property’.