The notified income tax return forms enable taxpayers to claim tax deductions for tax-saving investments, payments, donations and investments for capital gains exemption, made during the extended period until 30 June 2020.
The Central Board of Direct Taxes has recently notified the income tax returns for the AY 2020-21. The tax returns are in line with the Finance Act amendments for the FY 2019-20 and include relief measures announced due to COVID-19. For the FY 2019-20, the government had earlier provided relief by extending the time for making tax-saving investments until 30 June 2020.
The notified income tax return forms enable taxpayers to claim tax deductions for tax-saving investments, payments, donations and investments for capital gains exemption, made during the extended period until 30 June 2020. The income tax returns consist of a separate schedule (Schedule DI) requiring a taxpayer to specify the amount of the investment or expenditure in respect of which they wish to claim a deduction. The deduction is allowed within the aggregate eligible limits available for FY 2019-20 under the different provisions of the Income Tax Act.
The scope of filing income tax return has been expanded to include taxpayers who are individuals, Hindu Undivided Family (HUF) and partnership firms who are not otherwise required to file an income tax return. Such taxpayers should file a tax return if they meet any of the below criteria:
# Deposit of an aggregate amount which exceeds Rs 1 crore in one or more current accounts with a bank (including a co-operative bank).
# Incurred expenses of an aggregate amount which exceeds Rs 2 lakh on themselves or any other person for foreign travel.
# Payment of an aggregate amount which exceeds Rs 1 lakh towards electricity charges.
The taxpayers should also disclose the amount of expenditure and deposit where the amounts exceed the threshold limits mentioned above.
The income tax forms released do not ask for passport details of a taxpayer. Also, the government withdrew the amendments prohibiting a joint owner of a single house from filing ITR-1 or ITR-4.
Individual taxpayers resident in India can file ITR-1 for reporting income from salaries, one house property, other sources and agricultural income up to Rs 5,000. In the case of joint owners of house property, the joint owners can file ITR-1 where they own only one property. However, resident individuals can file ITR-1 only if their income does not exceed Rs 50 lakh.
Non-residents and not ordinarily residents should file ITR-2. Individuals and HUFs can file a return in ITR-2 to report capital gains, losses and deductions, other than income from business or profession. Individuals having income from business/profession should file ITR-3.
Residents individuals, HUFs and partnership firms declaring income under the presumptive scheme of taxation can file ITR-4, for total income up to Rs 50 lakh. Under the presumptive scheme of taxation, gross turnover now includes revenue received through prescribed electronic modes as part of revenues from banking channels. The prescribed electronic modes include UPI, IMPS, BHIM Aadhar Pay and other regular banking channels.
Taxpayers who are partnership firms (total income above Rs 50 lakh), LLP, AOP and BOI should file a return in ITR-5. The form ITR-6 continues to apply for companies other than those claiming tax exemption under section 11. Trusts, companies and associations claiming tax exemptions continue to file ITR-7.
As part of the COVID-19 relief measures, the government has extended the due date for filing income tax returns for all taxpayers to 30 November 2020. The due date for the tax audit also stands extended to 31 October 2020. In case of taxpayers who are subject to transfer pricing certification, the due date for tax audit continues to be 30 November 2020.
(The author is Founder and CEO, ClearTax)