Which form of Income Tax Return to be filed

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The CBDT notifies Form Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6, Form ITR-7 and Form ITR-V for A.Y. 2019-20 / F.Y. 2018-19 vide Notification No. 32/2019 dated 1st April, 2019. The new ITR form seeks a detailed salary break up from salaried class assesses, detailed break up of Income from House properly and GST number and turnover from businessmen. Although there is no change in the manner of filing the ITRs as compared to last year, some fields have been rationalised in the latest form. Every person has to file their income tax return online only except super senior citizens having the age of above 80 years i.e.Super senior citizens can file their return in paper form.

 

ITR-1 is not applicable for an individual who is either Director in a company or has invested in unlisted equity shares as per notification no.32/2019 dated 01.04.2019. The most basic-ITR-1 or Sahaj this time seeks salaried taxpayers’ salary break up for clarity of deductions. Details such as allowances that are not exempt, value of perquisites, profit in lieu of salary and deductions claimed under section 16 should be mentioned in separate fields. All these information’s are available in the Form 16 issued by the employer. The new form provides a relief for NRIs as they can now provide details of their foreign bank accounts to claim credit or refunds. However, they will have to use ITR-2 instead of ITR-1.

The following incomes are covered under ITR 1-

Resident Indian individuals having total income not exceeding Rs. 50 lakhs during the year -

• Income from Salary/ Pension; or

• Income from One House Property (excluding brought forward and carry forward losses); or

• Income from Other Sources (Other than Winning from Lottery and Race Horses, Dividend received from Indian company exceeding Rs. 10 lakhs, Unexplained income taxable u/s 115BBE)

The following incomes not covered under ITR 1-

• Income from any foreign assets

• Income from agricultural more than Rs. 5,000,

• Income from capital gains or losses

• Income from business or profession

• Income from more than one house property

• Total Income exceeds Rs. 50 lakh

The ITR -2 has also been rationalised for individuals and HUFs (Hindu Undivided Families) having income under any head other than business or profession. The new form provides a relief for NRIs as they can now provide details of their foreign bank accounts to claim credit or refunds. However, they will have to use ITR-2 instead of ITR-1.

The following incomes are covered under ITR 2-
a) Income exceeding Rs. 50 lakhs- (which is not covered under ITR-1)

• Income from Salary/Pension; or

• Income from House Property; or

• Income from Other Sources (also includes Winnings from Lottery and Income from Race Horses).

b) The following incomes also includes-

• Income from Capital Gains; or

• Income from Foreign Assets/Foreign income or

• Income from Agricultural exceeding Rs. 5,000

• Dividend received above Rs. 10 lakhs during the year

• Unexplained Income under section 115BBE

The following Income are not covered under ITR-2-

• Income from “Profits and Gains from Business or Profession”

• Income from Partnership Firm as a partner.

Further, in a case where the income of another person like spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this Return Form can be used if income to be clubbed falls in any of the above categories.

    Now, the individuals and HUFs having income under the head business or profession shall file either ITR-3.
The following incomes are covered under ITR 3-

• Income from “Profits and Gains from Business or Profession”

• Income from Partnership Firm as a partner

• Income from Salary/Pension, Income from House Property, Income from Capital Gain or Income from Other Sources.

• Income from winning of Horse Races/ Lottery Tickets, or Income from Speculation Business etc.

The following Income are not covered under ITR-3-

• Income under “Presumptive Taxation Scheme” covered under section 44AD, 44ADA & 44AE

 

ITR-4 is not availble for an Individual who is either Director in a company or has invested in unlisted equity shares vide notification no. 32/2019 dated 01.04.2019. It is available for presumptive businesses with a turnover of less than Rs 2 crore can do away with the requirement of maintaining books of accounts and instead pay a tax on the basis of a certain percentage of their turnover.

The following incomes are covered under ITR 4-

Individuals/Hindu Undivided Family and Firms (excluding LLPs) having the following income during the year-

• Business Income under “Presumptive Taxation Scheme” Section 44AD

• Professional Income under “Presumptive Taxation Scheme” Section 44ADA

• Transporters Income under “Presumptive Taxation Scheme” Section 44AE)

• Income from Salary/Pension

• Income from House Property (excluding brought forward and carry forward losses)

• Income from Capital Gain or Income from Other Sources (excluding Winning from Lottery and Income from Horse Race.

Note-

However, if the turnover of the business exceeds Rs 2 crores, the taxpayer will have to file ITR-3.

Now, there is an additional requirement to quote GSTR No. and Turnover/Gross receipts as per GST return filed. Further, fields have been added under financial particulars as under-

-Partners/ Members Capital, b. Secured Loan, c. Unsecured Loan, d. Advances, e. Fixed Assets

 

ITR 5 is for Firms (including LLPs), AOPs (Association of Persons) and BOIs (Body of Individuals), Local Authority or Artificial Judicial Persons.

For Companies other than companies claiming exemption under section 11 (Income from property held for charitable or religious purposes)
  For Persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139 (4E) or section 139 (4F)-

• Section 139(4A): is required to be filed by every persons having income from property held under trust or other legal obligation wholly for charitable or religious purpose.

• Section 139(4B): is required to be filed by a political party.

• Section 139(4C): is required to be filed by every scientific research association, news agency, medical institution etc.

• Section 139(4D): is required to be filed by every university, college or other institution as referred in Section 35 are also covered.

• Section 139(4E): is required to be filed by every business trust which is not required to furnish return of income or loss under any other provision falls under this section.

• Section 139(4F): Investment fund referred under section 115UB falls under this section.

  Cannot Carry forward losses-

• If you have filed a belated return, you cannot carry forward losses (except loss from house property). Losses under the following heads of income: Income from business and profession including speculation business, capital gains, and income from other sources cannot be carried forward in case a belated return is filed by the assessee.

Interest u/s 234A for late Filling-

• If a belated return is filed after the Income tax due date, the assessee has tax liability, he will be liable to pay tax along with interest @ 1% per month.

• If a belated return is filed after the Income tax due date, the assessee has no tax liability, he will not be liable to pay any interest.

Penalty u/s 234F for Late Filing of Income Tax Return-

• If the taxable income is below Rs. 5,00,000 Penalty will be Rs. 1,000
• If the taxable income is above Rs. 5,00,000:-
  1. -filed before 31 December   : Penalty will be Rs. 5,000
  2. -after 31st December           : Penalty will be Rs. 10,000