It is very important to know the changes that are made in the ITR forms including ITR-1 for FY 2018-19 or AY 2019-20 for true and correct usage of forms and disclosure of income and other particulars. The changes made in the ITR forms this year are very significant. Even there are head-wise changes that vary from ITR forms to forms. For example, the detail reporting of Salary in ITR 2 is different from the detailed reporting of salary in ITR-1.
Everyone gets busy in July every year and rush to file his or her Income Tax Return disclosing the income, claim the deduction and pay tax or claim refund of income-tax. It's an annual affair.
The disclosures are required to be made in the Income Tax Returns or ITRs is made as per the requirements of the ITR forms which are notified by the CBDT, the apex administrative body of the income-tax, at the beginning of the relevant assessment year.
The forms are notified for various categories of persons and the forms, as applicable to the category of taxpayers, are used by the respective assessees or taxpayers.
The ITR forms are notified by the CDBT every year to incorporate the changes or amendments made by the Budget of the relevant year. The new forms also take care of any lacuna or additional information or validation that was missed out in a preceding year(s).
The Income Tax Returns or ITRs for FY 2018-19 (or Assessment Year 2019-20) were notified by the CBDT vide Notification No. 32/2019 dated 01.04.2019. Rule 12 of Income Tax Rules, 1962 contains the provisions of ITRs which is amended by the said notification for AY 2019-20.
The Rules state which ITR form shall be used by a particular type of assessee and under what circumstances. Apart from the rules, changes are also made in the ITR forms regarding the information or disclosures which an assessee is required to be made while filing the ITR forms.
Like preceding year, this year also 7 ITR forms were notified and those are ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 (Sugam), ITR-5, ITR-6, and ITR-7. Besides, ITR-V or acknowledgment is also there.
In this year, all the assessees or taxpayers are mandatorily required to file their income tax returns online electronically except individuals over the age of 80 years (very senior citizen) who have the option of filing the tax return in paper format as well but only for ITR 1 or ITR 4. If the very senior citizen uses any other form other than ITR 1 or ITR 4, he or she cannot file ITR in paper format.
One needs to be cautious while choosing the appropriate form. In this article, we will be discussing the changes that are made in ITR 1 for FY 2018-19 or AY 2019-20 compared to earlier year(s).
1. Changes in Rule 12 of Income Tax Rules for ITR 1 for AY 2019-20-
ITR 1 can be filed only by an individual under specified circumstances. HUF cannot use ITR 1.
ITR 1 for AY 2019–20 has been notified by the CBDT on 01.04.2019 and online form is also released by now.
As per the notification dated 01.04.2019, the rules for the filing of ITR 1 are given below-
As per the notification dated 01.04.2019, the rules for the filing of ITR 1 are given below-
The individual must be a resident. Thus a non-resident cannot file ITR 1.
An individual can file a return of income in ITR 1 only and only if the Total Income of the individual includes the following incomes-
a) Income chargeable under the ‘Salaries’
b) Family Pension Income u/s 57(iia)
c) Income from ONE House Property without any carry forward or brought forward of loss. This means the house property must be a self-occupied house property. If the house property is let-out, the interest paid on the home loan shall not exceed Rs. 2,00,000 during FY 2018-19. If the interest paid on the home loan exceeds Rs. 2,00,000 and the individual assessee wants to carry forward the loss, then such individual shall use ITR-2 and not ITR 1.
d) Income from Other Sources like bank interest, interest on income tax refund, etc. The income from other sources shall not include winnings from lottery or income from race horses.
An Individual cannot file ITR-1 if the following conditions are satisfied if he-
- has any foreign assets including shares and bonds.
- any foreign bank accounts.
- any income from foreign sources.
- any income to be apportioned in accordance with provisions of section 5A i.e. Portuguese Civil Code applies.
- claimed deduction u/s 57, other than deduction claimed u/s 57(iia). Section 57(iia) deals with standard deduction from family pension income.
- is a director of any company, listed or unlisted.
- has held any unlisted equity share at any time during the previous year. It is immaterial whether the shares are in physical form or dematerialized form. This does not cover listed equity shares. Unlisted equity shares are the shares of companies which are not listed and traded on stock exchanges like NSE or BSE.
- is assessable for the whole or any part of the income on which tax has been deducted at source in the hands of a person other than the assessee.
- has claimed any relief of tax under section 90 or 90A or deduction of tax under section 91.
- has agricultural income, exceeding Rs. 5,000.
- his total income, exceeding Rs. 50 Lakh during FY 2018-19. If the total income exceeds Rs. 50 Lakh then details of Assets and Liabilities are required to be reported. ITR 1 does not have such a schedule.
- has income taxable under section 115BBDA. Section 115BBDA deals with dividend income from domestic company above Rs. 10 lakh.
- has income of nature referred to in section 115BBE which deals with tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69 - all are related to undisclosed income.
In the above circumstances, ITR 1 cannot be filed. If any of the above restrictions apply to an individual, he or she has to use ITR 2 or ITR 3 or any other appropriate form.
After discussing the rules for filing the ITR-1, let us look into the changes in information that is required to be given in ITR-1.
After discussing the rules for filing the ITR-1, let us look into the changes in information that is required to be given in ITR-1.
2. Changes in ITR-1 for 2019 for information with respect to ‘Salary Income’
A new category of ‘Pensioners’ is included in the ‘Nature of employment’ in ‘Part-A General Information’ for pension holders.
3. Changes in ITR-1 for 2019 with respect to Salary Details
Details of salary are required to be reported in ITR-1. The details have been synchronized with Form 16. There is a deviation in the reporting of salary income in ITR 1 than the preceding year. Last year, it was required to report salary amount excluding all exempt and non-exempt allowances, perquisites and profit in lieu of salary. These items were reported separately and had no impact on the calculation of income chargeable under the head salary. This information can be filled from the Form 16 issued by the employer. The Part-B of Form 16 contains the details of salary income and computation thereof. One should ensure that the employer has issued the New Form 16 as applicable for FY 2018-19 or AY 2019-20.
In ITR 1, the 'Salary as per section 17(1)' is disclosed as one consolidated figure. No component-wise break-up of salary into Basic Salary, Allowances, Exgratia, etc. are required to be reported in ITR 1. However, ITR 2 or ITR 3 required reporting of the component-wise break-up of salary as per section 17(1) is mandatory.
In ITR 1, the 'Salary as per section 17(1)' is disclosed as one consolidated figure. No component-wise break-up of salary into Basic Salary, Allowances, Exgratia, etc. are required to be reported in ITR 1. However, ITR 2 or ITR 3 required reporting of the component-wise break-up of salary as per section 17(1) is mandatory.
Read more on Changes in Form 16 for 2019
4. Changes in ITR-1 for 2019 for Exempt Allowances
Detailed break-up of allowances exempt u/s 10 of the Income Tax Act, 1961 is required to be reported in ITR-1. This year the notified ITR-1 requires reporting of clause-wise exemption from salary income. For this, the Form 16 has also been amended. One should ensure that the employer has issued New Form 16 as applicable for FY 2018-19 or AY 2019-20. This information is required to be filled from the Form 16 issued by the employer. The exempt allowances are listed below. If ‘Any Other’ is selected then the nature of such exempt allowance shall be written in the ‘Description’.
5. Changes in ITR-1 for 2019 for Standard Deduction
The Budget 2018 has introduced the standard deduction to be allowed from income chargeable under the head 'Salary'. The maximum amount of standard deduction to be allowed from salary income for FY 2018-19 is limited to Rs. 40,000. This limit is increased to Rs. 50,000 by Interim Budget 2019 to be applicable from FY 2019-20. Since Standard Deduction is allowed from AY 2019–20, the ITR-1 requires reporting the same. This information is required to be filled from the Form 16 issued by the employer. For this, the Form 16 has also been amended. One should ensure that the employer has issued New Form 16 as applicable for FY 2018-19.
Read more on Standard Deduction in Income Tax
7. Changes in ITR-1 for 2019 for information with respect to ‘Income from House Property’
6. Changes in ITR-1 for 2019 for section 16 deduction
There is a change in reporting requirement of other deductions under section 16 for Entertainment Allowance and Tax on employment known as Professional tax. Last year ITR 1 required the consolidated figure of deduction under section 16. ITR 1 for FY 2018-19 or AY 2019-20 requires deduction under section 16 to show the deduction separately for Standard Deduction, Entertainment Allowance, and Professional Tax. These fields are enabled or disabled based on the selection of the nature of employment. As per the drop-down list, the 'nature of employment' is - Government, Public Sector Unit, Pensioners, Others, and Not Applicable. When 'Others' is selected, the 'Entertainment Allowance' field is disabled but is enabled for 'Government' and 'Public Sector Unit'. For 'Pensioners', only the 'Standard Deduction' filed is enabled, rest are disabled. This minimizes the risk of misplacing of data in the wrong fields.7. Changes in ITR-1 for 2019 for information with respect to ‘Income from House Property’
Type of House Property - The income from House Property should be reported on the basis of Self Occupied, Let-out or Deemed to be let out for the AY 2019–20.
8. Changes in information in ITR-1 for 2019 with respect to ‘Income from Other Sources’
Detailed break-up of income from other sources should be given instead of one consolidated figure. In case ‘Any Other’ is selected then the nature of such other income shall be written in the ‘Description’. The income from other sources shall not include winnings from lottery or income from race horses. Therefore, in 'Any Other' heading, these nature of income cannot be included.
In ITR-1, only expenses u/s 57(iia) can be claimed. Section 57(iia) is a deduction available from family pension income and is equal to 33 1/3 percent of such income or Rs. 15,000, whichever is less.
9. Changes in ITR-1 for 2019 with respect to Donation
In case of deduction u/s 80G and 80GGA, Donation in cash is required to be reported separately. Please note that in case of donation made in cash in excess of Rs. 2,000, no deduction will be allowed.
A new tab for Deduction u/s 80GGA is inserted in ITR-1. This section provides a deduction for the donations made for scientific research or rural development. One should claim the deduction under the relevant clauses.
10. Changes in ITR-1 for 2019 for prevalidating a bank account for getting the refund into the bank account
In addition to the above, one should prevalidate the bank account for getting the refund. To prevalidate a bank account, the prerequisites are -
- A bank account of any type - savings bank account, current bank account, overdraft account.
- The IFSC code of the bank - which is available on the bank passbook or cheque leaf.
- The Account Number of the bank account.
- The bank account must be linked with the PAN of the taxpayer.
- If the bank account must be linked with a mobile number which may be different from the mobile number used in e-filing website.
- Email-id linking with the bank account is optional and not mandatory.
Last date or Due date of filing of ITR 1 for FY 2018-19 or AY 2019-20
When return filing is compulsory - According to section 139(1) of the Income Tax Act, 1961, an Individual or HUF is required to file a return of income in the prescribed form (ITR 1 in this case) if the 'total income' during a previous year exceeds the maximum amount which is not chargeable to income-tax (popularly known as basic exemption limit). However, for determining the threshold limit of the basic exemption limit, the 'total income' shall be increased by the following amount-
Amount exempt u/s 10(38) - This exemption is related to long term capital gain or profit on the sale of listed equity shares or equity oriented mutual fund units. This exemption is now withdrawn.
Amount exempt u/s 10A, 10B, or 10BA.
Amount of deduction claimed under chapter VI-A - related to the deduction claimed on life insurance premium, PPF contribution, mediclaim premium, etc.
If the Total Income plus the above-mentioned amount exceeds the basic exemption limit, one has to compulsorily file a return of income for that year.
The basic exemption limit for FY 2018-19 or AY 2019-20 is given below-
Type of taxpayer
|
Basic Exemption Limit for FY 2018-19
|
Individual below 60 years or HUF
|
Rs. 2,50,000
|
Individuals being Senior Citizens above 60 years
|
Rs. 3,00,000
|
Individuals being Very Senior Citizens above 80 years
|
Rs. 5,00,000
|
Due date of filing of return of income in ITR 1
According to Explanation 2 of section 139(1), the due date for filing of ITR 1 for FY 2018-19 (or AY 2019-20) is 31st July 2019, unless extended.Read CBDT EXTENDED TIME LIMIT FOR FILING OF 24Q TDS RETURN and Form 16 for FY 2018-19
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