Rule 12 of the Income Tax Rules, 1962

The Central Board of Direct Taxes, vide notification no. 32/2019 dated 1

st April 2019, introduced the Income Tax (Second Amendment) Rules, 2019 which are made effective from 1st April 2019. Vide the said Income Tax (Second Amendment) Rules, 2019, rule 12 of the Income Tax Rules, 1962 has been amended and format of Form ITR-1 (SAHAJ), Form ITR-2, Form ITR-3, Form ITR-4 (SUGAM), Form ITR-5, Form ITR-6, Form ITR-7 and Form ITR-V has been updated. In this article, we look at the various changed introduced by the new Rule 12 of the Income Tax Rules, 1962.

Form ITR-1 (Sahaj)

With effect from 1

st April 2019, additionally, the following categories of person will not able to a file income tax return in Form ITR-1:

Individuals claiming deduction under section 57 (other than deduction claimed under section 57 (iia);
Individuals being the director in any company;
Individual holding unlisted equity shares at any time during the previous year;
Individual who is assessable for the whole or part of the income on which TDS has been deducted in the hands of a person other than the assessee.

Form ITR-4 (Sugam)

With effect from 1

st April 2019, additionally, the following categories of person will not able to file a return in Form ITR-4 i.e. SUGAM

The person who has assets located outside India (assets includes financial interest in any entity);
The person having signing authority in any account being located outside India;
The person having income from any of the source outside India;
The person having the income to be apportioned as per provisions of section 5A;
Person being director in any company;
The person holding any unlisted equity shares at any time during the previous year;
The person having total income more than INR 50 Lakhs;
The person who is the owner of more than one house property and the income of such house property is chargeable under the head ‘Income from House Property’;
The person who is assessable for the whole or part of the income on which TDS has been deducted in the hands of a person other than the assessee.

Amendment in Mandatory Electronic Filing of Income Tax Return

As all are aware, electronic filing of income tax return is mandatory, however, the following categories of persons are exempted from the same –

An individual having an age of 80 or more at any time during the previous year; and
An individual who is furnishing a return of income in Form ITR-1 (SAHAJ) or Form ITR-4 (SUGAM).

The above categories of person can file their return of income in any of the following manner –

Electronically under digital signature;
Filing the return electronically under EVC (electronic verification code);
Filing the return electronically and submitting the verification of return in Form ITR-V; or
Filing the return in paper form.

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Frequently Asked Questions

Common questions about Income Tax Rule 12 Amendment.

The new Rule 12 has introduced changes to the eligibility criteria for filing income tax returns in Forms ITR-1 (Sahaj) and ITR-4 (Sugam). Certain categories of individuals, such as those holding unlisted equity shares, directors in companies, or those with income from sources outside India, will no longer be able to file their returns using these simplified forms.

From the assessment year 2019-20 onwards, individuals claiming deduction under section 57 (other than deduction claimed under section 57 (iia)), individuals being directors in any company, individuals holding unlisted equity shares at any time during the previous year, and individuals who are assessable for the whole or part of the income on which TDS has been deducted in the hands of a person other than the assessee, cannot file their income tax return using Form ITR-1 (Sahaj).

From the assessment year 2019-20, individuals having assets located outside India, having signing authority in any account located outside India, having income from any source outside India, having income to be apportioned as per provisions of section 5A, being directors in any company, holding unlisted equity shares during the previous year, having total income more than INR 50 Lakhs, owning more than one house property with income chargeable under 'Income from House Property', and those assessable for income on which TDS has been deducted in the hands of a person other than the assessee, cannot file their returns using Form ITR-4 (Sugam).

An individual having an age of 80 or more at any time during the previous year, and an individual furnishing a return of income in Form ITR-1 (SAHAJ) or Form ITR-4 (SUGAM), are exempted from mandatory electronic filing of income tax returns.

Individuals exempted from mandatory electronic filing of income tax returns can file their returns in any of the following ways: electronically under digital signature, electronically under EVC (electronic verification code), electronically and submitting the verification of return in Form ITR-V, or filing the return in paper form.

No, an individual holding unlisted equity shares at any time during the previous year cannot file their income tax return using Form ITR-1 (Sahaj) from the assessment year 2019-20 onwards, as per the new Rule 12 of the Income Tax Rules, 1962.

The article does not mention any changes in the eligibility criteria for filing income tax returns using Form ITR-2 or Form ITR-3. The changes discussed are specific to Form ITR-1 (Sahaj) and Form ITR-4 (Sugam).

No, an individual having income from any source outside India cannot file their income tax return using Form ITR-4 (Sugam) from the assessment year 2019-20 onwards, as per the new Rule 12 of the Income Tax Rules, 1962.

The article does not mention any change in the eligibility criteria for mandatory electronic filing of income tax returns. It only specifies the categories of individuals who are exempted from mandatory electronic filing.

No, an individual being a director in any company cannot file their income tax return using Form ITR-1 (Sahaj) from the assessment year 2019-20 onwards, as per the new Rule 12 of the Income Tax Rules, 1962.