Identifying the different categories of taxpayers, the Central Board of Direct Taxes (CBDT) has notified seven types of ITR forms for each class of taxpayer
ITR Filing 2019: The last date for filing Income Tax Returns (ITRs) is just around the corner. Taxpayers are required to furnish the details of income earned, source/ nature of the same and the tax paid or payable for financial year 2018-19. All individuals who have gross total income (before deduction under Chapter VI A) of over Rs 2.5 lakh are required to file ITRs. For those above 60 and below 80 years of age, the basic exemption limit is Rs 3 lakh and for those above 80 years, it is Rs 5 lakh.
Types of ITRs
Identifying the different categories of taxpayers, the Central Board of Direct Taxes (CBDT) has notified seven types of ITR forms for each class of taxpayer. However, ITR-1 to 4 have been identified for individuals and HUFs. ITR-1, widely known as SAHAJ, is a simple form and can be filed by resident individuals having total income up to Rs 50 lakh, having income from salaries, one house property, other sources and/or agricultural income up to Rs 5,000.
ITR-2 is required to be filed by individuals and Hindu Undivided Families (HUFs) not having income from Profits and Gains from Business and Profession (PGBP) and ITR-3 is for individuals and HUFs having income under head PGBP. Further, ITR-4 is for persons (Individuals/HUFs/ Firms), being residents and having income below `50 lakh and who have opted for presumptive taxation under section 44AD, 44ADA or 44AE. ITR-2 and ITR-4 cannot be filed by an individual who is a director in a company or has invested in unlisted equity shares.
What is different this year?
In the new ITR forms, some of the existing schedules have been modified and some new schedules have been introduced, seeking additional information from the taxpayers. The new forms have taken into account the changes introduced in Budget 2018-19. Resultantly, taxpayers can claim standard deduction of Rs 40,000 from their salary income and the elderly can claim higher deduction of Rs 50,000 under section 80TTB of interest on savings, fixed as well as post office deposits.
Additionally, ITR forms now require taxpayers to provide more details. For instance, ITR-1 now requires the taxpayers to indicate the nature of income from other sources and the nature of exempt income. Further, taxpayers shall have to disclose the basis while asserting the residential status.
Residents shall have to indicate the period of their stay in India based on which they were classified as residents. Similarly, not ordinarily resident individuals will also have to disclose the condition, based on which they are claiming to be classified so. Non-residents shall have to disclose the number of days for which they were in India, jurisdiction(s) of residence abroad and Taxpayer Identification Number of the country.
Due date of filing/penalty
All individual taxpayers are now required to file ITRs electronically; the sole exception being super senior citizens (of age more than 80 years), who can choose to file the return in paper form. Missing the August 31 deadline for filing ITRs can be costly. The late filing fee for ITRs furnished after due date but on or before December 31 is Rs 5,000, and is Rs 10,000 post this date. However, if the taxable income is below Rs 5 lakh, the maximum penalty shall be restricted to Rs 1,000.
In addition to the above late fees, if there is unpaid tax, interest under section 234A at 1% per month or part thereof will be charged on the tax payable till the date of payment thereof. Further, interest under section 234B and 234C may also apply.
(The writer is executive director, Nangia Advisors (Andersen Global).
Inputs from Vasudha Arora)