ITR-1 For AY 2020-21 Notified: Key Changes

CBDT has notified the ITR-Forms for AY 2020-21 relevant to FY 2019-20 vide

on 29th May 2020. Earlier the due dates for filing income tax returns for AY 2020-21 had been extended to 30th November 2020 for all taxpayers by the Finance Minister as a part of

relief measures

provided on account of COVID-19 pandemic. In this article, we are going to discuss solely the changes that have been made to

ITR-1 return filing

notified for AY 2020-21. To understand what was contained in ITR-1 for AY 2020-21 prior to this notification, you may click here. Let us discuss the changes that can be found in the current version of ITR-1.

Eligibility criteria for ITR-1 modified by amending Rule 12

Clause “a” of sub-rule 1 of

of Income-Tax Rules provides for criteria under which an individual shall file Form ITR-1 (Sahaj). The proviso to the said clause provides for restrictions under which an individual shall not be eligible to file ITR-1. Conditions “VII” and “VIII” as stated below are now being omitted: VII: Owns a house property in joint-ownership with two or more persons VIII: Is required to furnish a return under the seventh proviso to sub-section (1) of section 139 These two items had been added by CDBT vide its

notification

01/2020 dated 03.01.2020. These items have been omitted now. The effect of this amendment is that now an individual who owns a house property in joint-ownership or a person who is required to furnish a return under the seventh proviso to Section 139(1) is eligible to file ITR-1 (Sahaj).

Taxpayer to state whether the return is filed under the seventh proviso of section 139(1)

Section 139(1) provides for conditions under which a taxpayer is compulsorily required to file its income tax return within the prescribed due date. The seventh proviso to this sub-section states conditions in which a person though not required to furnish a return under the said sub-section shall furnish a return if the person has during the financial year:

Deposited more than one crore rupees in one or more current accounts
Incurred travel expenses exceeding two lakhs rupees either for self or anyone else in relation to foreign travel
Incurred expenses towards consumption of electricity in excess of one lakh rupees
Fulfills other conditions as may be prescribed

If an individual is furnishing his return for AY 2020-21 under seven proviso to Section 139(1), then he is required to disclose the same fact.

Details regarding current account deposits, foreign travel expenses and electricity expenses

The return requires an individual to disclose whether the following holds true. If the answer to the below questions is yes then the amount is required to be mentioned.

Whether the amount deposited in one or more current accounts during the financial year exceeds Rs. 1 crore?
Whether travel expenses incurred on self or any other person for travel to a foreign country during the financial year exceeds Rs. 2 lakhs?
Whether expenditure incurred on the consumption of electricity during the financial year exceeds Rs. 1 lakh?

Disclosure of investments made during the period 01.04.2020 to 30.06.2020 that are eligible for deduction under Chapter VI-A The Finance Minister Smt. Sitharaman had addressed a press conference on 24th March 2020 to discuss the relief measures for various statutory and regulatory compliance matters. The

states that the time limit for making investments by the taxpayers in tax-saving instruments has been extended to 30th June 2020. Thus, for FY 2019-20 the taxpayers were given a relaxation to make tax-saving investments up to 30th June 2020 to avail a

deduction

for the same in the Income Tax return. Accordingly, ITR-1 introduces Schedule DI (Details of Investment) to disclose the details of all tax-saving investments made during the period 01.04.2020 to 30.06.2020. Details have to be disclosed for deductions being claimed under each section contained under Part B of Chapter VIA

Aadhaar No. of the tenant can be provided instead of PAN in Schedule-TDS

of the Income Tax Act, 1961 mandates an individual or a

HUF

(other than those liable to tax audit) to deduct tax on the rent paid to a resident in excess of Rs. 50,000 per month @ 5%. The tax has to be deducted for the entire year in the last month of the year for which rent is to be paid and the same has to be deposited with the government. TDS return has to be furnished in

Form 26QC

and the TDS certificate has to be issued by the deductor in the

Form 16C

. It is worthy to note that it is not important to obtain

TAN

to file the TDS return under Section 194-IB. Till AY 2019-20, PAN of the tenant could be quoted for the tax deducted by the tenant. Now, an option has been provided to quote the Aadhaar No. of the tenant if the PAN is not available.

Back to Learn

Frequently Asked Questions

Common questions about ITR-1 Key Changes.

ITR-1 (Sahaj) is the income tax return form that can be filed by resident individuals whose total income for the year does not exceed Rs. 50 lakhs. The eligibility criteria for filing ITR-1 has been modified for AY 2020-21, allowing individuals who own a joint house property or those required to file a return under the seventh proviso of Section 139(1) to file ITR-1.

The seventh proviso to Section 139(1) mandates individuals to file an income tax return, even if they are not required to do so, if they have deposited more than Rs. 1 crore in one or more current accounts, incurred foreign travel expenses exceeding Rs. 2 lakhs, or spent more than Rs. 1 lakh on electricity during the financial year. ITR-1 for AY 2020-21 requires individuals to disclose if they are filing the return under this proviso.

Due to the COVID-19 pandemic, the government extended the deadline for making tax-saving investments under Chapter VI-A until June 30, 2020, for FY 2019-20. ITR-1 for AY 2020-21 has introduced Schedule DI to disclose the details of such investments made during this extended period.

Yes, ITR-1 for AY 2020-21 has provided an option to quote the Aadhaar number of the tenant instead of their PAN while reporting TDS deducted on rent paid under Section 194-IB, if the PAN is not available.

The due date for filing income tax returns, including ITR-1, for AY 2020-21 has been extended to November 30, 2020, for all taxpayers, as a relief measure announced by the Finance Minister due to the COVID-19 pandemic.

An individual can file ITR-1 (Sahaj) only if their total income for the financial year does not exceed Rs. 50 lakhs.

No, individuals who own more than one house property are not eligible to file ITR-1 (Sahaj) and must file the appropriate ITR form based on their income sources.

Yes, ITR-1 for AY 2020-21 requires individuals to disclose whether they have deposited more than Rs. 1 crore in one or more current accounts, incurred foreign travel expenses exceeding Rs. 2 lakhs, or spent more than Rs. 1 lakh on electricity during the financial year. If the answer is yes, the corresponding amount must be mentioned.

No, ITR-1 (Sahaj) can be filed only by individuals whose income is from salary, one house property, and other sources such as interest income. If an individual has income from capital gains, business or profession, or any other sources, they must file the appropriate ITR form based on their income sources.

No, it is not mandatory to obtain a Tax Deduction and Collection Account Number (TAN) for filing the TDS return under Section 194-IB, which pertains to the deduction of tax on rent paid to a resident exceeding Rs. 50,000 per month.