The CBDT has extended the date for employers to issue form 16 from June 15 to July 10 and as a result it is highly likely that the deadline for filing income tax return may be extended beyond the usual July 31. And while you get started with the process, it is worth noting a few points when you are about to select the ITR form relevant to you for filing tax return for FY 2018-19.
Before we list out some of the major changes in tax return forms, here is a summary of tax return forms applicable basis the category of taxpayer and income source:
|ITR form number||Category of taxpayer||Residential Status||Income source|
|ITR 1 or SAHAJ||Individuals*||Resident and Ordinarily Resident (ROR)||Income from salary, one house property, other source of income (interest etc.). Total income should not be more than Rs. 50 lakhs|
|ITR 2||Individuals and HUFs||i)Non-resident (NR), ii) Resident but nor ordinarily resident (RNOR) iii) ROR||Income from salary, more than one house property, income from other sources and capital gains|
|ITR 3||Individuals and HUFs||i)NR, ii) RNOR iii) ROR||Income from salary, income from business or profession, house property, capital gains and income from other sources|
|ITR 4 or SUGAM||Individuals*, HUFs and firms (other than LLP)||ROR||Salary, one house property, other sources, business or professional income under Section 44AD, 44ADA and 44AE. Total income should not be above Rs.50 lakhs|
* Notably director in a company or an individual with investment in unlisted equity of a company cannot file ITR 1 and ITR 4.
Few important changes in tax return forms that need your attention:
• Now salary has to be reported in the ITR in consistency with the salary shown in form 16. Until last financial year, net taxable salary after available deductions and exemptions had to be reported in ITR 1 and ITR 4.
• Individuals who hold directorship in a company or have investment in unlisted equity shares of a company cannot file ITR 1 and ITR 4 forms. There was no such criterion in the previous years and the move aims to target shell firms. Also, some of the details concerning the company in which the individual is a director need to be given in ITR 2 and ITR 3. Investment details made in unlisted equity of a company needs to be also specified in ITR 2 and ITR 3.
• In ITR 2 and ITR 3, a column has been introduced to report long term capital gains on sale of equity shares or equity-oriented funds which now from FY 2018-19 have become taxable.
• Further in ITR 2 and ITR 3, to appropriately determine the residential status of the taxpayer, a column is inserted wherein you need to give the exact number of days for which you have lived in India. And if you qualify as a non-resident individual or NRI, the country where you qualify as the resident needs to be given together with the taxpayer's identification number of that resident country.
• In ITR1 and ITR 2, a distinct schedule has been added for reporting donations made towards scientific research or rural development under Section 80GGA of the Income Tax Act 1961.
• In ITR 2 and ITR 3 forms, in the Schedule EI that is for exempt incomes, a distinct column has been introduced for reporting income exemption claimed under Double Taxation Avoidance Agreement (DTAA).
• Also ITR 2 and ITR 3 tax forms require detailed reporting for assets located outside India.