#FinancialBytes: New income-tax return forms released; Here's everything to know
The Central Board of Direct Taxes (CBDT) released new income tax return (ITR) forms for the Assessment Year 2019-20. These are applicable to file ITRs for the income earned in the previous year. CBDT made changes to ITR forms with two objectives: incorporating changes made by the Finance Act, 2018 and seeking additional disclosures. Here's what salaried individuals should know about the new forms.
ITR-1 form or Sahaj can't be used by company directors
ITR-1 form or Sahaj is meant to be filled by salaried individuals. Those with an income of Rs. 50 lakh or less from their salary, one house property, and other sources like interest income. However, from this year, ITR-1 form cannot be used by any person who is either a director of a company or someone who has invested in unlisted equity shares.
Mandatory for all taxpayers to file returns electronically
Also, from this year, it's mandatory for all taxpayers to file ITRs electronically, except for super senior citizens whose age is 80 years or above in the previous year (2018-19). Taxpayers with an income less than Rs. 5 lakh in the previous year were allowed to file a physical return, but this option has now been withdrawn.
All income details must be mentioned in new ITR-1
In the new ITR-1 form, taxpayers who have a house are required to specify if their house is self-occupied, let-out, or deemed to let-out. They should also provide details of income from other sources unlike earlier when they just had to specify the income amount.
The mechanism for reporting salary income has changed
With new ITR forms, the mechanism for reporting salary income has changed. For AY 2018-19, individuals were required to report salary amount excluding all exempt and non-exempt allowance, perquisites, and profits in lieu of their salary. These items were reported separately and didn't impact the net salary calculation. This reporting mechanism has been changed that's now in sync with the Form 16 columns.
Individuals must now mention amount of allowances, perquisites, and profit
From now onwards, taxpayers must mention their gross salary as well as the amount of exempt allowances, prerequisites, profits in lieu of salary. The new ITR forms seek separate reporting of all deductions allowed under Section 16, including standard deduction, entertainment allowance, and professional tax.