Changes in ITR filing this year

The last date to file your ITR for the year is 31^st July 2019. You will be required to provide significantly more details while filing ITR this year than earlier.

Taxpayers under the age of 80 years will not be allowed paper or physical filing of income tax returns this year. Also, ‘Pensioners’ is a newly introduced category in the type of employment apart from Government, PSU or Others. But these minor alterations aren’t the only changes made to income tax returns.

In ITR 2, those who are directors and owners of shares in unlisted companies need to file additional details of the company name, the PAN and Director Identification Number (DIN).

This year while filing the income details from your Form 16, merely filling in the gross salary and deductions will not do. You will have to fill up more columns. Specifics of the salary, including perquisites, allowances that are exempt too have to be mentioned. The exemption fields have been specifically mentioned to ensure that the employees fill in the relevant information and stop designing a salary structure of their own. The reason for standardization of Form 16 has been to ensure the right exemptions are being claimed so that the same can be matched with the returns filed by employers. This year, Form 16 has been amended & employers will need to give information in the new format. If your Form 16 doesn’t mention the break-up, do request your Company for Form 16 in the new format.

Those who switched jobs during a financial year would find it difficult to hide the income from both employers as the new Form 16 asks for details of both employments (old and new).

In addition you are required to give break up of different interest rate – savings bank, fixed deposit or income tax refund interest. This is essential due to the exemption available on savings bank interest up to Rs.10,000 and Rs.50,000 exemption available to senior citizens. Once again, this is an attempt to curb malpractices in terms of claiming deductions – for example claiming deduction u/s 80TTA of Rs 10,000 even though bank interest did not add up to that figure.

Those who are owners of immovable property need to mention the details that would be cross-checked and verified through other sources.

For those who are selling assets, you will be required to provide details instead of merely filling in the figures. For instance, immovable property sellers need to disclose the name of the buyer, his or her PAN, the amount involved and the location of the property sold.

If you have any income from house property such as rental income, then you need to mention if there has been any unrealized rent during the year; a detail that wasn’t asked in the ITR forms earlier.

There are several areas, in which income is tax exempt for individuals. But to ensure that regular income is not camouflaged as exempt, the income tax department has created additional fields to be filled. For instance, a person earning agricultural income of more than Rs.5 lakhs would have to fill details of the land, including the area, pin code and even the type of ownership and irrigation method.

Non-resident Indians (NRI) would have to actually mark the number of days of stay in India and abroad in the returns, which so far hadn’t been requested for.

If you had been ignorant about filing returns and have avoided it so far, then a notice to do so might be on a way to you as the taxman has been collating information from various sources and the returns are merely a means to cross-check the same. So, file the return within the deadline of 31^st July, 2019 to avoid penalties.

You will have to bear a penalty of Rs 5,000 if the ITR for the financial year 2018-19 is filed after 31^st July, 2019, but before 31^st December, 2019. Those who file the returns between 31^st December, 2019 and 31^st March, 2020, would have to pay a penalty of Rs 10,000.

Income tax notice u/s 143(1)(a)

Do you have to file income tax returns?

Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 10 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata. He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’