The ITR filing due date for AY 2020-21 stands extended to 31 December 2020, and 31 January 2021 for tax audit circumstances. The ITR types notified carry some substantial alterations such as in reporting needs, tax deductions and alterations introduced in Budget 2019. Taxpayers need to bear in thoughts these alterations when filing their ITR for AY 2020-21 (FY 2019-20).
The Budget 2019 introduced interchangeability of PAN and Aadhaar. An person who does not have a PAN can quote Aadhaar quantity at many locations in the ITR. For instance, the ITRs allow quoting of Aadhaar in the case of a purchaser of immovable home, a tenant when reporting earnings from residence home, ITR filing by representative assessee and so on.
The ITR also incorporates new criteria introduced for mandatorily filing of tax return even although the gross total earnings of the person is under the simple exemption limit. The compulsory filing is applicable in case any of the under criteria are happy:
1. Deposited in 1 or far more present account(s) an quantity or aggregate of amounts exceeding Rs 1 crore throughout the FY 2019-20
2. Expenditure on travel to a foreign nation incurred of an quantity exceeding Rs 2 lakh in aggregate for self or any other individual
Expenditure on consumption of electrical energy exceeding Rs 1 lakh in the aggregate throughout the FY 2019-20.
The government gave more time till 31 July 2020 for generating tax-saving investments for the FY 2019-20. The ITRs give for a Schedule DI to disclose the information of the investments and claim deduction. Similarly, the ITRs also give for disclosing capital gains exemptions for investments created up to 30 September for exemptions below section 54 to 54GB.
The ITRs also need disclosure of the name of the enterprise in which an person is a director or shareholder of unlisted equity.
The ITRs give for an expanded list of nature of employment to include things like bifurcation among the central government and state government workers. Also, a further category stands integrated for ‘not applicable eg. family members pension.
The earnings-tax rebate below section 87A was enhanced to Rs 12,500 for a total earnings up to Rs 5 lakh. The ITRs accordingly permit for a tax rebate up to Rs 12,500 in case of resident folks whose total earnings (following claiming deductions and exemptions) does not exceed Rs 5 lakh. The quantity of the rebate was Rs 2,500 for the final AY 2019-20 for a total earnings up to Rs 3.5 lakh. The Income-tax Returns need to be mandatorily filed if the gross total earnings is above the simple exemption of Rs 2.5 lakh. The filing is mandatory even if the person is eligible for a rebate and their tax liability is nil.
The regular deduction for the AY 2020-21 permitted below Income from Salaries has been enhanced to Rs 50,000 from Rs 40,000.
From the AY 2020-21, when declaring earnings from residence home, an person can classify two properties as “self-occupied”. Until AY 2019-20, an person who had a second vacant residence home had to spend the taxes for the notional rent calculated for the stated home.
The Budget 2019 amended capital get exemption below section 54 to permit claim for the acquire or building of two residential properties as an alternative of 1 for claiming the deduction. This situation to claim this deduction is that it can be availed only as soon as in a lifetime and the extended term capital get arising need to be much less than Rs 2 crores.
The ITRs also give for claiming more interest deduction below section 80EEA for reasonably priced housing in case of a very first time residence purchaser exactly where the stamp worth of home does not exceed Rs 45 lakh. The maximum deduction permitted is Rs 1,50,000 on loan availed by an person from any monetary institution. Similarly, the ITRs carry an allowance for interest deduction introduced in price range 2019 for loans taken to acquire electric automobiles.
(The author is Founder and CEO, ClearTax)