Blog

2020

Important Announcements by CBDT in Relation to ITR 1 & ITR 4 for AY 2020-21

Important Announcements by CBDT in Relation to ITR 1 ITR 4 for AY 2020 21 

The Central Board of Direct Taxes notified the Income Tax returns ITR 1 and ITR 4 for the Assessment Year 2020-21 (FY 2019-20) on 3rd January 2020.

Afterwards on receipt of representations from tax payers, CBDT issued a press release on 9th January 2020 relaxing the eligibility criteria for filing ITR 1 and ITR 4. In this article we will discuss the key changes announced in relation ITR 1 and ITR 4.

ITR – 1:

  • An individual taxpayers having total income up to Rs 50 Lakhs can file ITR 1.
  • Earlier restriction was imposed on assesses who co-own one house property for filing of ITR – 1 and 4. However, relaxation has been granted to them by way of a press release.
  • ITR-1 form for AY 2020-21 is valid for individuals who have:
    • Deposited more than Rs. 1 crore in bank accounts; or
    • Have incurred Rs. 1 lakh on electricity expenses; or
    • Rs. 2 lakh on foreign travel.

Who cannot file ITR 1?

  • An individual who is a director in company.
  • An individual with a brought forward/carry forward loss under the head ‘Income from house property’.
  • Taxpayers who have invested in unlisted shares.
  • A person who co-owns more than one house property.

Details to be furnished / Changes made in ITR 1:

  • Passport Number: You also need to mention your passport number, if you have a valid Indian passport, in ITR-1, whether you went abroad or not during the assessment year.
  • Details of Tenant: In case the house property is rented out, the taxpayer will have to provide the name and PAN or Aadhaar of the tenant in the ITR-1.
  • Employment Details: The ‘Nature of Employment’ has been moved from Part A- General Information to B1 of Part B- Salary Schedule of ITR-1.
  • Income from Other Sources: A separate column has been introduced under ‘Income from other sources’ for deduction u/s 57(iv) – in case of interest received on compensation or enhanced compensation under section 56(2)(viii).
  • Details of unrealized rent in case of income from house property must be disclosed.

ITR 4:

  • A resident individual, HUF and Firm (other than LLP) having total income up to 50 lakh can file this return.
  • Single co-ownership in a house property is allowed just like ITR 1.

Disclosure Requirements:

  • Disclosure of passport details applies to ITR 4 as well.
  • Details of Tenant: In case the house property is rented out, the taxpayer will have to provide the name and PAN or Aadhaar of the tenant in the ITR-4.
  • ITR-4 form for AY 2020-21 is valid for individuals who have:
    • Deposited more than Rs 1 crore in bank accounts; or
    • Have incurred Rs 1 lakh on electricity expenses; or
    • Rs 2 lakh on foreign travel.
  • In case ITR-4 is being filed by a representative, Aadhaar number of the representative is required to be provided in ITR-4 from FY 2019-20 onwards.

Disclosure requirement for tax payer being a partner in a firm:

  • Details of the Firm:
    • Name of the Firm;
    • PAN Card of the Firm;

  • Details of Partners:
    • Name and Address;
    • Percentage of Share;
    • PAN;
    • Aadhar Card/ Enrollment Number;
    • Rate of Interest on Capital;
    • Remuneration Paid/ Payable;

Other Changes:

  • The ‘Nature of Employment’ has been moved from the Part A- General Information to B1 of Part B- Salary Schedule of ITR-4.
  • The ‘Financial particulars of the business’ section of the ITR-4 has been replaced by “Particulars of cash and bank transactions relating to presumptive business”. Under this tab, the taxpayer will have to enter the opening balance of cash and bank (aggregate of all bank accounts), receipts during the year, and payments or withdrawals made in the previous year.
  • A separate column has been introduced under ‘Income from other sources’ for deduction u/s 57(iv) – in case of interest received on compensation or enhanced compensation under section 56(2)(viii).

Who cannot file ITR 4?

  • An individual who is a director in company.
  • An individual with a brought forward/carry forward loss under the head ‘Income from house property’.
  • Taxpayers who have invested in unlisted shares.
  • A person who co-owns more than one house property.

Blog Archive


Financial Management