The Central Board of Direct Taxes (CBDT) has notified two income tax return (ITR) forms for AY20-21 (FY19-20). Forms ITR-1 (Sahaj) and ITR-4 (Sugam) – the simplest of the lot – were notified recently. Usually, the Income-tax department notifies the ITR forms in the first week of April but it has been done earlier this year.
The ITR 1-Sahaj is for individuals being a resident (other than not ordinarily resident) having total income up to Rs.50 lakh, having income from salaries, one house property (single ownership), interest income, family pension income etc.
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 (dealing with presumptive income) or interest income, family pension etc. and agricultural income up to Rs.5,000. Presumptive taxation scheme (PTS) allows you to calculate your tax on an estimated income or profit. The scheme can be used by businesses having a total turnover of less than Rs.2 crore and eligible professionals with gross receipts of less than Rs.50 lakh in a financial year.
From AY20-21 you cannot use ITR-1 form if you jointly own a house property. You will have to fill the ITR-2 that requires extensive disclosures. This restriction is also valid for ITR-4.
The new forms now ask you whether you hold an Indian passport. If you do, you will have to mention your passport number. This is applicable to both ITRs 1 and 4, and perhaps also to other forms that will be notified in due course.
If you have taken international vacations with your family in FY19-20, you will have to make additional disclosures. If you have spent Rs.2 lakh or more on foreign travel, you cannot use ITR-1. If the form applicable to you is ITR-4, you will have to mention the amount in the form.
Similarly, ITR-4 seeks to know if your electricity consumption during the FY9-20 was in excess of Rs.1 lakh. If you answer in the affirmative, you will have to state the amount. Such individuals, too, cannot use ITR-1.
If you deposited over Rs.1 crore in your current accounts during the year, you will not be allowed to use ITR-1. You will need to disclose the aggregate amount deposited in FY19-20 across current accounts in ITR-4.
The new-look ITR-4 has phased out certain disclosures, while requiring some additional information in certain cases. In the case of 44AD or 44ADA or 44AE (dealing with presumptive income), now the assessee will be required to give opening balance of cash in hand and opening balance of bank accounts and also will be required to give total amount received in cash during the year. Now there will be no need to provide figures of unsecured loans, sundry debtors, sundry creditors, amount of closing stock, etc. as was required in the earlier years.
Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 12 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’