CBDT notifies ITR-1 and ITR-4 for Assessment Year 2020-21

cbdt-notifies-itr-1-and-itr-4-for-assessment-year-2020-21

The CBDT has notified the Income Tax Return Form in ITR-1 and ITR-4 for the Assessment Year 2020-21 (Financial Year 2019-20) Vide Notification No. 01/2020 dated 03-01-2020. Certain new conditions have been added restricting from the use of ITR-1 and ITR-4 which are discussed in this article.

No corresponding utility for e-filing of the return of income is yet released.

Every year the CBDT notifies ITR forms for various categories of persons and the forms, as applicable to the category of taxpayers, are used by the respective assessees or taxpayers.

The ITR forms are notified by the CDBT every year to incorporate the changes or amendments made by the Budget of the relevant year. The new forms also take care of any lacuna or additional information or validation that was missed out in a preceding year(s).

The Income Tax Return or ITR Forms in ITR-1 and ITR-4 for FY 2019-20 (or Assessment Year 2020-21) were notified by the CBDT vide Notification No. 01/2020 dated 03.01.2020. Rule 12 of Income Tax Rules, 1962 contains the provisions of ITRs which is amended by the said notification for AY 2020-21.

The Rules state which ITR form shall be used by a particular type of assessee and under what circumstances. 

Apart from the rules, changes are also made in the ITR forms regarding the information or disclosures which an assessee is required to be made while filing the ITR forms.


Following are the changes in ITR-1 notified on 03-01-2020 for the Assessment Year 2020-21:

1. Joint Owners of house property cannot use ITR-1 and ITR-4: Joint Owners of house property cannot use ITR-1 and ITR-4 even though he is otherwise eligible to file ITR-1 or ITR-4. The joint ownership may be with two or more than two persons.

In the case of joint-owners, the income is divided or appropriated between the joint owners. 

2. ITR-1 cannot be used for filing of return under seventh proviso to section 139(1): A person who is required to file the return for non-financial or non-income basis, as per the seventh proviso to section 139(1), is also restricted from the use of ITR-1.

There are certain non-income criteria on the basis of which a person, who is otherwise not required to file a return of income under the law, is required to compulsory file a return of income as introduced by the Finance (No. 2) Act, 2019 which are outlined below-

1. A person who has deposited amount of more than Rs. 1 crore in aggregate in one or more current accounts maintained with a bank in a financial year.

2. A person who has incurred more than Rs. 2 lakh in aggregate in a financial year for foreign travel for himself or any other person.

3. A person who has incurred more than Rs. 1 lakh in aggregate in a financial year for payment of electricity bills.

4. Any other prescribed conditions. No such condition is yet prescribed.

The above two amendments are made in Rule 12 of the Income Tax Rules, 1962.

Apart from the above, the following changes are noted in the ITR forms for AY 2020-21 so far notified on 03-01-2020:


Changes in ITR-1 for AY 2020-21

1. Income from House Property: In the case of reporting of income under the head 'Income from House Property', the taxpayer has to furnish the full Address of the house property in column B2 of the ITR-1.

2. Income from Other Sources: In the case of reporting of income under the head 'Income from Other Sources', a new row is added for claiming a deduction under section 57(iv).

Deduction u/s 57(iv) is allowed only for income chargeable to tax u/s 56(2)(viii) as income by way of interest received on compensation or on enhanced compensation referred to in sub-section (1) of section 145B.


Changes in ITR-4 for AY 2020-21

1. Income from House Property: In the case of reporting of income under the head 'Income from House Property', the taxpayer has to furnish the full Address of the house property in column B2 of the ITR-4.

2. Income from Other Sources: In the case of reporting of income under the head 'Income from Other Sources', a new row is added for claiming a deduction under section 57(iv).

Deduction u/s 57(iv) is allowed only for income chargeable to tax u/s 56(2)(viii) as income by way of interest received on compensation or on enhanced compensation referred to in sub-section (1) of section 145B.

3. Changes in the column for section 44AE: The changes in the column header for reporting income under section 44AE are tabulated below-


Column Header
Changes
Registration No. of goods carriage owned by the assessee
Retained
Whether owned/leased/hired
Absent in the Notification
Gross Vehicle Weight of goods carriage  (in MT)
Retained
Presumptive income u/s 44AE for the carriage of the goods (Computed @ Rs.1000 per ton per month in case tonnage exceeds 12MT, or else @ Rs.7500 per month) or the amount claimed to have been actually earned, whichever is higher
Column is bifurcated as mentioned below
Total Presumptive Income in respect of the Good Carriage
Added
Income claimed to have been actually earned in respect of goods carriage
Added
Presumptive income u/s 44AE 
Added

4. Summary of Cash and Bank account reporting: A new column is added to report summary of transactions in cash and bank account (all bank accounts in aggregate) during the FY 2019-20.

Column G requires reporting of 'Particulars of cash and bank transactions relating to presumptive business' in the following format-
cbdt-notifies-itr-1-and-itr-4-for-assessment-year-2020-21
5. Financial Particulars in ITR-4 is missing in the Notification: The requirement of furnishing the balance as on 31st March of the previous year is missing in the notification dated 03-01-2020 for AY 2020-21.

The financial particulars inter alia required to report Capital, Loan funds, Advances, Sundry Creditors, Fixed Assets, Inventories, Debtors, Cash and Bank Balances, etc.

All other conditions for filing of ITR-1 and ITR-4 as was applicable in the preceding assessment year shall remain unchanged for the current assessment year 2020-21.


Update:
CBDT grants relaxation in eligibility conditions for filing of Income-tax Return Form-1 (Sahaj) and Form-4 (Sugam) for Assessment Year 2020-21. Read more.....

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