The income tax return
(ITR) forms for FY 2018-19 notified by the government are different from those used to file the previous year’s returns. Some of the changes in the forms have been done in keeping with the changes in income tax
laws made in Budget 2018 for FY 2018-19 and onwards. Apart from that, there are other changes as well in the ITR forms which you should be careful about while filing your return for FY 2018-19.
Here are nine changes in ITR forms 1 & 2 that you should know about:
1. Online filing of ITR mandatory
In a departure from previous year, all individuals (except for super senior citizens) will be required to file their ITRs electronically. The ITR-1 for FY 2018-19 cannot be filed in paper format by the taxpayers having income below Rs 5 lakh with no refund.
Chartered Accountant, Naveen Wadhwa, DGM, Taxmann.com says, “In the previous year, CBDT allowed two types of individuals to file their ITR in paper format. These individuals were super senior citizens whose age is 80 years or above and individuals having income below Rs 5 lakh with no refund. However, for FY 2018-19, only super senior citizens can now file ITR-1 or ITR-4 in paper form and others will have to file their ITR electronically.”
2. Complete details of buyer to whom you have sold property
If you have sold a property in FY 2018-19, then while filing ITR-2, you will be required to provide complete details of the buyer to whom you have sold the property. Wadhwa says, “The buyer details have to be provided irrespective whether the capital gains accrued are of short-term or long-term in nature. The details of buyer will have to be given if TDS is deducted by your buyer while making payment.”
It is mandatory to deduct TDS if the sale value exceeds Rs 50 lakh. However, “If the sale value exceeds Rs 10 lakh but below Rs 50 lakh then deducting TDS is not mandatory but quoting of PAN of the buyer while filing ITR is mandatory for this year,” adds Wadhwa.
3. Property wise details of rent arrears
“While filing ITR-1 or ITR-2 as applicable, if there are any rent arrears that are received by you in FY 2018-19 then you have to report them property wise as received,” says Wadhwa. Remember, if an individual has one house property which is let out during FY 2018-19, then the rent received is required to be reported in ITR-1.
For individuals with more than one house property, they are required to file their ITR using ITR-2. “ITR-1 & ITR-2 has introduced an additional row ‘Arrears/Unrealized Rent received during the year less 30%’. This row was not available in both the forms in the previous year,” adds Wadhwa.
4. Specifying the type of house property
While providing details of your one house property in ITR-1, you are required to specify whether the house is – ‘Self Occupied’, ‘Let-out’ or ‘Deemed Let-out.’ In the previous year’s ITR-1, there was no such option of ‘Deemed Let-out’ in ITR-1.
5. Investment details in unlisted companies
If you are holding shares in an unlisted company then, you are required to disclose the details of your holdings in ITR-2. The details required are extensive – name of the company, PAN of the company, number and cost of acquisition at the beginning of the year, number of shares, face value, issue price (or purchase price) and date of purchase of shares acquired during the year, number and sale consideration of shares transferred during the year, number and cost of acquisition of shares held at the end of the previous year.
Wadhwa says, “Such information is being sought so as to get the footprints of transactions of purchase and sale of unlisted shares. It will also help the department to check whether income and net worth of a shareholder is in corroboration with the amount invested by him in an unlisted company. If it does not reconcile, the department can initiate the enquiry to verify if some unaccounted money is invested in an unlisted company.”
6. Reporting of salary details gets easier in ITR-1
This year providing details of your salary income will be easier as the details required are in sync with the information available in Form-16. In the last year, though taxpayers were required to provide the break-up of salary details, the information required was not in sync with information available in Form-16.
7. Full disclosure of interest income
Along with providing full break-up of salary income, taxpayers will be required to specify the full bifurcation details of the interest income or any other income received by them. Income from other sources head in ITR-1 has been updated to provide details of the source from where interest or any other income is received.
8. Residential status
The new ITR-2 form asks individuals not only to specify the residential status as resident, resident but not ordinarily resident or non-resident, but also to provide additional information with respect to his residential status, such as, number of days of stay in India, jurisdiction of his residence and tax identification number in case he is a non-resident.
“These details are being asked to check if a taxpayer has rightly determined his residential status in India which is entirely based on his number of days of stay in India. The Tax Identification Number will validate if a non-resident taxpayer is rightly claiming the DTAA benefit,” adds Wadhwa.
9. Mention of DIN number
If you are Director of a company, then you will be required to specify your DIN (Director Identification Number) in ITR-2 or 3 whichever is applicable. Along with this you will also be required to provide information – name of company, PAN, whether shares are listed or unlisted.
Wadhwa says, “The purpose of seeking DIN no. of directors might be to identify the inactive directors whose qualifications and taxable income does not justify him to remain on board. If a person has been a director of a company but his income over the period had been negligent, it can raise doubt on the purpose for which he was appointed as director in a company.”