For the financial year 2019-20 (assessment year 2020-21), the Central Board of Direct Taxes (CBDT) has revised its income tax return (ITR) forms, especially to allow taxpayers to claim deductions for the extended tax-saving deadline due to the coronavirus pandemic.
You may be aware that since many investors were unable to make offline payments due to the nationwide lockdown that was imposed on 25 March, to comply within the deadline of 31 March 2020, the finance ministry allowed the extension of the deadline for tax savings. Payments made towards tax-saving investments between 1 April 2020 and 30 June 2020 can also be claimed for deductions for the financial year 2019-20 under the "Schedule-DI" in the ITR form.
Note that it is only additional time provided to pay towards premium, interest, etc and not an extension of the financial year which ended on 31 March 2020.
Another relief provided by the government amid the pandemic is that the due date of filing ITR forms for the last financial year will be 30 November 2020 for all taxpayers.
Another change is the absence of details such as passport number, employer, tenants in case of rented house property from the newly notified forms.
As you prepare to file your income tax returns for the previous financial year, here is the description for ITR-1 to ITR-7. Read on to find out which one fits you.
ITR-1 or Sahaj
It is a simple form with some areas being pre-filled. It is meant for an ordinary resident whose total income does not exceed Rs 50 lakh. It is for a taxpayer with income from salary, one house property and interest income. Agricultural income should be limited to Rs 5,000.
Those will business income, capital gains, professional income or more than one house property cannot use the Sahaj form.
Individuals and HUFs not having any business income but are not eligible to file ITR-1, due to income from capital gains/ agricultural income in access of Rs 5,000, etc, must file ITR-2.
ITR-4 or Sugam
Resident individuals, HUFs and firms (other than LLP) with total income limited to Rs 50 lakh for the financial year and with income from small business or profession taxable under presumptive income provisions of Sections 44AD, 44ADA or 44AE of Income Tax Act, 1961 should file ITR-4. However, those with income from capital gains cannot use this form.
Individuals and HUFs who have business income, but are not eligible for ITR-4 can file ITR-3.
For charitable trusts/ institutions.
Except for individuals and HUFs, all categories of taxpayers including companies, charitable trusts or institutions, partnership firms, LLPs, Association of Persons, Body of individuals, etc. to whom no other form applies to, can file ITR-5.
- Both ITR-1 and ITR-4 have minimum disclosure requirements to help small taxpayers provide minimal details and file returns easily.
- An individual who is either director in a company or has invested in unlisted equity shares can also not file form ITR-1 and ITR-4.
- For FY 2019-20, those with a cash deposit of over Rs 1 crore in a current account, electricity bill payment of Rs 1 lakh or more and spent Rs 2 lakh or more on foreign travel during the year are mandatorily required to file income tax returns.