Income Tax Return: Know the key changes in ITR Forms, filing processes before you start

The all new e-filing web site is scheduled to grow to be practical from June 7, 2021.

The e-filing of Earnings Tax Return (ITR) has grow to be standstill from June 1, 2021 because of the ongoing technique of migration from the previous ITR submitting web site – incometaxindiaefiling.gov.in – to a all new e-filing web site – incometax.gov.in – which is scheduled to grow to be practical from June 7, 2021.

Nevertheless, other than the change within the e-filing web site, some modifications are additionally made within the ITR Kinds for the Evaluation Yr (AY) 2021-22 compared to the final AY (2020-21) in addition to within the technique of submitting your return of revenue during the last yr.

In line with Dr. Suresh Surana, founder, RSM India, following are among the key modifications within the ITR kinds and Submitting course of for AY 2021-22:

1. Introduction of JSON Utility

The Earnings Tax Division has launched a JSON utility for offline submitting of Earnings Tax returns. This utility for offline return submitting is anticipated to extend the return submitting comfort. Additionally, the CBDT has introduced speedy processing of ITR, extra interactive return preparation software program and likewise, new on-line tax cost system. The brand new e-filing portal might be built-in with speedy processing of Earnings Tax Returns.

2. Non-Permissibility to make use of ITR 1 in case of TDS Deducted u/s 194N

Part 194N of the IT Act gives for deduction of TDS in case of money withdrawal by any particular person exceeding the desired restrict as talked about therein. Nevertheless, in case of any one who is claiming TDS credit score pertaining to Part 194N wouldn’t be eligible to file his return of revenue in ITR1.

Additionally, since TDS deducted u/s 194N of the IT Act may be solely claimed as a refund pertaining to such yr of deduction, the ITRs have been amended as a way to prohibit the carry ahead of such TDS to subsequent evaluation years.

3. Modification in Schedule UD to provide impact to part 115BAC

Part 115BAC present for particular tax regime for people or HUFs. These particular tax regimes present for concessional tax charges, nonetheless, the taxpayer is just not eligible to sure deductions and exemptions below the IT Act. Since, these tax regimes have been made relevant by Finance Act, 2020 w.e.f. 1 April 2020 i.e. AY 2021-21, the ITRs have been revised as a way to incorporate the non-compulsory tax regimes. Accordingly, the taxpayer must present info Half-A (Basic Data) whether or not they can be choosing the Concessional Tax regime or not.

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Additional, as a way to avail these sections, the assessee has to forego the extra depreciation whether it is forming a part of unabsorbed depreciation for earlier years. Nevertheless, a one time adjustment within the opening WDV is allowed in such case and accordingly the Schedule UD in ITR 3 has been revised to supply for such revision within the unabsorbed depreciation which represented further depreciation on account of choosing part 115BAC.

As talked about above, any particular person choosing the concessional tax regime wouldn’t be eligible to say sure deductions and exemptions and likewise any losses attributable to such exemptions and deductions wouldn’t be allowed for the present in addition to any subsequent years as the identical can be deemed to have been given full impact to. Accordingly, the ITR Kinds have been accordingly revised to supply for adjustment of such losses.

4. Incorporation of modifications within the Dividend Regime

Earlier, the Firm paid Dividend Distribution Tax (DDT) on Dividends and consequently, shareholders had been taxed solely in case of dividends exceeding the edge restrict of Rs. 10 lakhs. Nevertheless, the Finance Act 2020 made an overhaul of the whole Dividend Tax regime by the use of abolishing DDT and accordingly, Schedule OS (Different Sources) has been revised to supply for dividend taxable within the palms of the shareholders. Additional, a quarterly breakup of dividend revenue can be required to be offered in all of the ITR kinds which might additional allow computation of curiosity legal responsibility below part 234C. Correspondingly, Schedule EI (Exempt Earnings) which offered for exemption of dividend revenue as much as Rs 10 lakh has been correspondingly revised.

5. Extra reporting requirement of nature of safety

Schedule 112A and Schedule 115AD require reporting of assorted particulars in respect of long run capital good points arising on switch of securities, being fairness shares, models of equity-oriented mutual fund or models of enterprise belief, offered switch of such capital asset is chargeable to Securities Transaction Tax (STT). Now, a brand new column has been added below each the schedules for reporting the character of safety i.e. whether or not it’s a share or unit. Additional, because the good points in such a case is grandfathered until 31 January 2018, the related particulars pertaining to Sale worth, FMV as on 31 January 2018, and many others. in accordance with Part 55 of the IT Act can be required to be reported within the ITR.

6. Reporting of particulars of tax deducted below part 194M

Part 194M gives for TDS to be deducted on the price of 5 per cent from the cost made to a contractor or fee agent or dealer or skilled by an Particular person/HUF (who aren’t subjected to the tax deduction provisions below part 194C, 194H & 194J) and accordingly, for particulars of tax deducted below part 194M, certificates in Kind 16D might be issued below Rule 31. The ITR kinds have been amended to supply reference of Kind 16D in case of tax deducted at supply below part 194M. Nevertheless, it’s notable that no such deduction below this part shall be made if such sum or, because the case could also be, combination of such sums, credited or paid to a resident throughout a monetary yr doesn’t exceed Rs 50 lakh.

7. Different Adjustments

• For workers who’ve obtained ESOPs from an eligible start-up referred to in part 80-IAC, the Half B of Schedule TTI now requires disclosure of the quantity of tax which has been deferred referring to revenue on ESOP obtained as perquisite.
• Separate impact of Marginal aid on Surcharge must be disclosed
• Schedule DI required bifurcation of the tax investments in accordance with the prolonged due dates of final yr has been faraway from the ITR Kinds as it’s now not relevant.
• Earlier, all of the revenue chargeable below part 115A learn with part 194LC had been topic to deduction of tax at a uniform price of 5 per cent. On account of the amendments led to by the Finance Act, 2020, the speed of deduction is now 4 per cent in respect of curiosity payable in sure circumstances. This results in two separate charges for deducting tax from revenue chargeable below part 115A learn with part 194LC. Consequent modifications have been made for separate disclosures within the ITR Kinds.