6 changes in Income Tax Return forms for AY 2019-20 that you must know

Here we take a look at changes you need to know in the two most popular ITR forms: ITR-1 and ITR-2

Kumar Shankar Roy Jun 24, 2019

income tax everificationThe time for filing income tax returns (ITR) for assessment year (AY) 2019-20 is here. The tax man has made a few changes in ITR forms. These tweaks have been made to sort of standardise income declaration so that returns can be auto-processed while any tax evasion can be quickly spotted. Do note to a simple taxpayer so many changes and rules may make the tax return filing process chaotic. But, there is no recourse. Once rules are declared, you have to follow them to a tee. Let us have a look at changes you need to know in the two most popular forms: ITR-1 and ITR-2.

1. ITR-1 cannot be used by a resident individual who is either a director in a company or has investments in unlisted equity shares of a company even if she has income below Rs 50 lakh. That is because the Central Board of Direct Taxes requires additional details. So, such persons cannot use ITR-1, popularly called the Sahaj Form.

2. In the new ITR-2, there is a change in terms of disclosure of the company in which you are a director. The taxpayer has to disclose the name of the company, PAN of the company and director’s identification number, also called DIN. Plus, he/she needs to reveal investments in unlisted equity shares such as the name of the company, the opening number of shares, the cost, the details of shares acquired and sold during the year, plus the closing number of shares and their cost

3. In the ITR-2, you will need to give full details of the buyer of any property – immovable property or capital assets – sold in FY 2018-19. Details like the address of the property transferred, name and permanent account number (PAN) of the buyer has to be included in the form. If there are multiple buyers in the transaction, the share of each buyer in the transaction has to be reported.

4. Reporting of salary details is now easier in ITR-1. This has been made possible due to synchronisation with Form-16. Form 16 part B has been standardised, which earlier was not so and caused confusion.

5. The new ITR-2 requires individuals to disclose residential status. The non-resident individuals, or NRIs, are required to mention the country of residence and the taxpayer identification number of that country. In case of a citizen of India or Person of Indian Origin (PIO), the total period of stay in India during the FY 2018-19 and in preceding four financial years needs to be revealed. Such disclosure will help tax man check if the taxpayer has rightly determined residential status or not. Misrepresentation by a resident as NRI can help a person avoid disclosure of global income in India.

6. In ITR-1, you now have to give the details of the source of any income from other sources head.

Watch out for – Budget 2018 introduced taxation on long-term capital gains over Rs 1 lakh arising from the sale of listed equity shares or an equity-oriented mutual fund unit. 2019-20 will be the first assessment year when reporting of such LTCG will become applicable. So, do take note of this. There must be uniformity in how LTCG is calculated by you and the tax department.

If you want to know which form you should use to file your ITR, here is a an excellent compilation.


Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at [email protected].

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