All you need to know about the revised tax filing forms
The Central Board of Direct Taxes (CBDT) has notified on May 29, 2020, new ITR Forms for the Financial Year (FY) 2019–20. Earlier, ITR1 (SAHAJ) and ITR-4 were released in the month of January.
However, the updated ITR Forms (ITR1 to ITR-7) were released on May 29, 2020, after the amendments that were made to the Finance Act 2019 and Ordinance issued by CBDT on March 31, 2020, in view of the COVID-19 pandemic. The new forms will replace those released earlier in January (ITR1 and ITR-4).
These fresh forms are designed to capture relaxations announced by the government in view of the COVID-19 pandemic, such as the extension in timelines for making tax-saving investment or re-investment of funds from capital gains transactions during the period April 1, 2020 to June 30, 2020.
Applicability of forms
Before we delve into the changes in the ITR Forms, let us see the applicability of Forms ITR1 and ITR2:
ITR1 is applicable for individuals satisfying the below conditions:
- Individual qualifies as Resident and Ordinarily Resident
- Total income does not exceed Rs 50 lakh
- Individual has income from salaries, one house property, other sources and agriculture income up to Rs 5,000.
It is important to know that even if an individual satisfies all the above criteria, ITR1 is not applicable in case such an individual is a Director in a company or has invested in unlisted equity shares. Also ITR2 is applicable to individuals and to HUFs not having income from profits or gains from business or profession.
Key changes in ITR1 and ITR2
In order to combat the difficult times due to COVID–19, the CBDT has also extended the due date for filing the return from July 31, 2020 to November 30, 2020.
It is worthwhile noting that with this relief, individuals will have adequate time to not only collate information required to meet the new reporting requirements of ITR Forms, but also to make arrangement for funds if required for payment of taxes, if any.
While the return filing utility for ITR1 is already released by CBDT and individuals can go ahead and file their income tax return, the return filing utility for ITR2 is yet to be released by the CBDT. Hence individuals will have to wait till the filing utility is released to file the tax returns for FY 2019-20.