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

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 notification 31/2020 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 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 Rule 12 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 press note 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

Section 194-IB 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.

Through this article, we have tried to cover the changes that have taken in the form ITR-1 for the AY 2020-21 since the last notification i.e. notification 01/2020 was issued on 3rd January 2020. For more information regarding income tax return filing, you may click here.

Post by Niti Gupta

Niti Gupta is a Chartered Accountant who has experience working with different industries. She loves to write about anything and everything, but majorly research and write about finance and taxation.