Income Tax Return (ITR) Forms have been released by the Central Board of Direct Taxes (CBDT) a few days back. As it happens every year there are some major and minor changes in these forms. These changes are mainly due to 2 factors:
- To reflect the new tax law changes that were introduced/changed in FY 2018-19 (AY 2019-20)
- To collect more information about tax payer so that the IT department can have better assessment of them.
- 1 Tax Rules changes in FY 2018-19 (AY 2019-20)
- 2 Changes in ITR Forms for AY 2019-20 (FY 2018-19)
- 2.1 1. Some Tax Payers cannot file ITR 1 this year
- 2.2 2. Salary Structure In ITR Form (Schedule S)
- 2.3 3. Additional disclosure for income from Other Sources (Schedule OS)
- 2.4 4. Additional Deduction 80TTB for Senior Citizens (Schedule VI-A)
- 2.5 5. Residential/NRI Status
- 2.6 6. Long term Capital Gains on Shares/Mutual Funds (Schedule CG)
- 2.7 7. Details about Buyer of Property (Schedule CG)
- 2.8 8. Additional disclosure of Agriculture income (Schedule EI)
- 2.9 9. More detailed disclosure on foreign assets (Schedule FA)
- 3 New ITR Forms for AY 2019-20
Tax Rules changes in FY 2018-19 (AY 2019-20)
Before we look at the changes in the form, lets briefly recall the rules that were changed/introduced in FY 2018-19.
- Standard Deduction of Rs 40,000 for Salaried and Pensioners. Transport Allowance & Medical Reimbursement No more tax exempt for salaried
- Cess hiked from 3% to 4% (renamed as Health & Education cess)
- Rs 50,000 interest income for senior citizens tax exempted u/s 80TTB
- 10% tax on long term capital gains (above Rs 1 Lakh) on stocks & equity based mutual funds
- Also 10% dividend distribution tax on dividend paid by equity mutual funds
- Health Insurance Premium Tax exemption limit increased to Rs 50,000 u/s 80D for senior citizens
- Increased deduction for medical treatment u/s 80DDB for senior citizens up to Rs 1 lakh
For more details: 13 Important Changes in Tax Rules from FY 2018-19
Changes in ITR Forms for AY 2019-20 (FY 2018-19)
We list down the important changes in the ITR forms to be used for AY 2019-20 (FY 2018-19)
1. Some Tax Payers cannot file ITR 1 this year
Following 2 categories of tax payers who used to file ITR 1 until last year have to file ITR 2 for AY 2019-20:
- Individuals being a director in a company
- Individuals who have investment in unlisted equity shares at any time during the FY
ITR 2 Form asks for more discloses from the above tax payers.
Director in a company has to provide name of company, PAN, DIN and if the company is listed or not as shown in the table below:
For investment in unlisted equity, people need to provide details of the company, PAN and transactions done in the financial year.
2. Salary Structure In ITR Form (Schedule S)
ITR Form asks for breakup of salary. Thankfully this time they have aligned it to Form-16 fields. Last year a lot of people found it difficult to understand and there were issues.
The row reflecting standard deduction also appears in the form as it was introduced in FY 2018-19. The limit for the same has been increased to Rs 50,000 from FY 2019-20.
3. Additional disclosure for income from Other Sources (Schedule OS)
For income from Other Sources, the ITR Form asks for more details like income from Savings Account, from deposits (banks/post office), from income tax return, etc. This was required as Section 80TTA only exempts interest income up to Rs 10,000 from savings account but many people were misusing the same.
4. Additional Deduction 80TTB for Senior Citizens (Schedule VI-A)
Section 80TTB had been introduced in FY 2018-19 and it exempts Rs 50,000 interest income for senior citizens. The same is now reflected in ITR Form. Just to remind in case you take benefit 80TTB, you cannot take benefit of 80TTA.
Also Read: Highest Interest Rate on Bank Fixed Deposits
5. Residential/NRI Status
The new ITR Forms ask about the number of says individuals have stayed in India in last financial year. This is to determine the residential status – NRI, Resident Indian, etc. For NRIs, POIs he/she needs to report the total period of stay in India during FY 2018-19 and during the preceding four years.
Also Read: NRE Vs NRO Accounts for NRIs
Long Term Capital gains on equites and equity based mutual funds were introduced in last financial year. The gains would be taxed at 10% in case it exceeds Rs 1 lakh. The ITR forms have been modified accordingly to mention these capital gains.
7. Details about Buyer of Property (Schedule CG)
In case taxpayer has sold any immovable property in the financial year, he needs to furnish the details of the buyer such as Name, PAN, Percentage share, address of the property, etc.
Download: Capital Gains Calculator for Property
8. Additional disclosure of Agriculture income (Schedule EI)
Taxpayers with agriculture income of more than Rs 5 lakhs, have to fill up ITR 2. ITR 2 asks for additional details such as the name of the district with pin code, measurement of agricultural land, whether owned/leased, etc. under exempt income schedule.
Also Read: 25 Tax Free Incomes & Investments in India
9. More detailed disclosure on foreign assets (Schedule FA)
This year the disclosures regarding foreign assets have increased in the ITR form. Now it also includes details of foreign depository accounts, foreign custodian accounts, equity or debt interest in a foreign entity and foreign cash value insurance contract or annuity contract.
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Here are some posts which can help you with e-filing of ITR 2019:
New ITR Forms for AY 2019-20
Everyone filing their income tax return must be aware of the above changes in the form for ITR (Income Tax Return) AY 2019-20 and be careful while filling the same to avoid any complications/tax notices in future.