ITR-1 has to be filed by individuals whose total income does not exceed Rs 50 lakh in a financial year. The income sources for ITR 1 include income from salaries, one house property, other sources such as interest income etc. and agriculture income up to Rs 5,000.
The government has notified the income tax return filing forms for the financial year 2020-21 via a notification dated March 31, 2021. As per the notification, some of the new elements in the forms are: ITR-1 cannot be used by an individual for whom income tax is deferred on ESOPs; if the return is being filed in response to any tax notice then DIN has to be mentioned; the ITR forms also ask the filer to specify the tax regime – new or old- for which he/she has opted.
ITR-1 also asks for quarterly breakup of dividend income which became taxable in FY 2020-21. This information is required for claiming relief on payment of advance tax under section 234C on the dividend income.
The press release issued by the Central Board of Direct Taxes (CBDT) states: “Keeping in view the ongoing crisis due to COVID pandemic and to facilitate the taxpayers, no significant change have been made to the ITR Forms in comparison to the last year’s ITR Forms. Only the bare minimum changes necessitated due to amendments in the Income-tax Act, 1961 have been made.”
Archit Gupta, Founder and CEO, Cleartax says, “Tax filing exercise this year will be very important for every single taxpayer as this is the first time that taxpayers will have the option to choose a more beneficial tax regime. This year’s ITR forms do not have any major changes, as it should be. There should be as little change as possible so taxpayers find it easy to comply and are able to report information consistently. Besides the choice between the regimes, taxpayers need to report quarterly dividend income earned in FY 2020-21 in order to comply with advance tax provisions similar to how advance tax is calculated and paid on capital gains.”
ITR-1 has to be filed by individuals whose total income does not exceed Rs 50 lakh in a financial year. Those filing ITR1 can only have income from: salaries, one house property, other sources such as interest income etc. and agriculture income up to Rs 5,000.
ITR-1 cannot be used by an individual who is either a director in a company or has invested in unlisted equity shares or in cases where TDS has been deducted under section 194N of the Income-tax Act, 1961. TDS under section 194N is deducted for cash withdrawal exceeding Rs 1 crore in a financial year from a bank account.
Further, ITR-1 cannot be used by an individual for whom income tax is deferred on ESOPs.
In the new ITR 1 and 2 forms, an individual is required to select the option whether the ITR is filed under the new tax regime or old/existing one.
ITR-2 form has to be used by an individual having income/losses from capital gains, or having more than one house property. However, this form cannot be used by an individual who has income from profits and gains from business and profession.
ITR-2 also asks for the Document Identification Number (DIN) of the notice if the ITR-2 is filed in response to any tax notice.. A tax payer is also required to provide the date of that notice.
Those individuals having income from business or profession can file ITR Form 3. Persons other than the individual, HUF and companies i.e. partnership firm, LLP etc. can file ITR Form 5. Companies can file ITR Form 6. Trusts, political parties, charitable institutions etc. claiming exempt income under the Act can file ITR-7. There is no change in the manner of filing of ITR Forms as compared to last year, said the CBDT.
(Click here to know how to save on taxes for the financial year 2020-21.)