Which ITR Form should be used for FY2018-19 (AY2019-20)?
Few days back, Central Board of Direct Taxes (CBDT) has issued notification about new ITR forms that are applicable for A.Y. 2019-20 (Financial year 2018-19). While there is no change in ITR1/Sahaj, there are some modifications done for ITR1, ITR2, ITR3, ITR4, ITR5 and ITR7. Since the ITR deadline is 31-Jul which is far away, many of you are yet to file income tax returns. Which ITR Forms to be used for last financial year and assessment year 2019-2020? Who need to file income tax Returns in FY2018-2019? This article would help you to clarify these points.
What is Income Tax Return?
If you are already aware, skip this section.
An ITR is the tax form that is used to file income tax with the income tax department. The return is filed in a predefined work sheet format where the income figures are written to calculate the tax liability. The Income Tax Department has released the ITRs for the financial year 2018-19 (Assessment Year 2019-20) with few major changes in the forms. The last date of submission of these ITR forms will be 31st July.
According to the income tax act, 1961 every income earned by an individual, HUF, firm, LLP, company or any other artificial person has to fall amongst these five categories
Income from salary
Income for household property
Income from business and profession
Income from capital gains
Income from other sources
The income tax department has issued seven types of ITRs as specified, all the above five heads in different ITRs. One has to choose the right ITR in which his income is falling.
Who needs to file the income return?
As per the Income Tax Act 1961, every person should file the income tax return if his income exceeds the limit prescribed by the income tax department on their respective due dates. The due dates are 31 July for salaried individuals and non-auditable firms. For companies and auditable firms, it is 30 September. A person has to file IT return if his income exceeds basic exemption limit, the slab rates and the applicable rate of income tax has been tabulated below.
What are the Income tax slabs and rates for FY 2018-19 (AY2019-20)?
Before we jump into ITR forms, let us look at the income tax slabs and rates that are applicable for Financial year 2018-19.
What are the major changes done in ITR Forms for FY2018-19 (AY2019-20)?
Here are the changes made compared to last year ITR forms.
1) No Change in ITR-1 (Sahaj) which need to be filed by salaried employees.
2) for ITR 2, 3, 4, 5 and 7 some sections are updated.
3) We are aware that from FY2018-19, there is a standard deduction of Rs 40,000 in lieu of transportation and medical expenses allowed earlier. One need to ensure that this deduction is considered when filing ITR.
4) One more change was about the applicability of section 80TTA upto Rs 10,000 for deduction of interest received from Savings Account. However, this deduction is not applicable if you file ITR lately.
5) Regarding interest received on bank FDs / Fixed Income for Sr. Citizens’s this was increased from Rs 10,000 to Rs 50,000 from this financial year. Section 80TTB was introduced to claim this amount.
6) Long Term Capital Gains (LTCG) of 10% over and above Rs 1 Lakh exemption was introduced for returns from Equities and mutual funds. This is shown in new ITR forms.
7) There was a 3% education cess earlier. This is now replaced with 4% health and education cess.
8) As per the new guidelines introduced from last financial year, Residential status with additional details needs to be shown. Necessary ITR form modifications are done to this effect.
9) 80DDB section limit is now increased to Rs 1 Lakh for treatment and expenses of Critical Illness. Necessary ITR form modifications are done.
Currently CBDT has issued only PDF copies of these ITR forms and online/utility on income tax website would be updated in coming days.
Which ITR Form should be used for FY2018-19 (A.Y.2019-20)?
The CBDT notified new income tax return forms for filing of returns for the assessment year 2019-20 (Financial year 2018-19).
Which ITR form is applicable to you, would depend on the source of income and other parameters.
1) Who can file ITR -1 / Sahaj for FY2018-19?
Salary or pension income
Income / Loss from one house property
Agricultural income less than Rs 5,000
Income from other sources like Fixed Deposits / Equity / Small saving schemes etc.,
Individuals who are resident Indian and, other than not ordinarily resident with income upto Rs 50 Lakhs (from salary/pension, income from home property, income from FD/equity etc.,) can file this form.
Who cannot file ITR-1?
If you have business income or capital gains.
Income from lottery or horse racing.
If you are salaried person and has income/loss from house property with investments in bank FD/small saving schemes, you can simply use this form.
2) Who can file New ITR – 2 for FY2018-19?
Individuals or HUF’s can file this ITR provide they meet the following criteria:
Income from salary or pension income
Income through head capital gains
Income from multiple residential or commercial houses
Asset in foreign country and source of income outside India
Agricultural income of over Rs 5,000
If you have income from lottery or racing
If your total income is exceeding Rs 50 Lakhs.
If you have business income or income from profession, you cannot file ITR-2.
Most of the salaried individuals would have income from house property and capital gains (through mutual funds or stocks), hence they need to file New ITR-2.
3) Who can file Modified / New ITR – 3 for Assessment year 2019-2020?
One can file ITR-3 if you fulfill below criteria
Individuals or HUFs having income from proprietary business.
Individuals or HUFs having income from profession.
Income from partnership firm.
Individuals who might have salary income or income from multiple houses along with above mentioned incomes, one can file ITR-3
4) Who can file New ITR – 4 for financial year 2018-19?
Any individual, HUFs and Firms whose income is less than Rs 50 Lakhs and having income from business or profession, income from house property and other income can file this ITR.
One cannot file this ITR-4 if their agricultural income is more than Rs 5,000 and who has capital gains and who has income outside India.
Remaining forms are more for others/companies, hence we would limit our discussion up to ITR-4.
What happens in case wrong ITR is filed?
The assessee has to choose from these IT forms which are applicable to him/her according to income earned by him. If a wrong IT return has been filed by the assessee, then it is treated as defective and return will be deemed as not been filed. Rectification has to be made under Section 139 (5). It has to be done within the 15 days (or prescribed) of receiving the notice from the CPC office in Bangalore. It is always advisable that the right forms are filled with accurate information to avoid all the inconveniences.
What documents required to file income tax returns?
There is a set of a few documents that are required for filing the return. These would depend on source of incomes too.
a) PAN – Permanent Account Number
b) Bank Account Details
c) Last year’s return
d) TDS Certificates
e) Financial Statements and Audit Report, if applicable
f) Details of investments as per Sec.80C and details of donations as per Sec 80G
g) For reporting of salaried income
iii. Rent receipts for claiming HRA.
h) For reporting of house property income
Details of Home Loan
iii. Details of rental income if the property is rented.
i) For reporting of capital gain –
Stock Trading Statement in case of Capital Gains from Shares.
Sale, purchase, registration and Capital Gains details in case of property.
iii. Details of fund statement for Mutual Funds, equity funds etc.
j) For reporting of other income
Bank account statement for interest income
Income details from Post Office saving account / small saving schemes.
iii. Details if there are other sources of income.
Conclusion: Keeping, the new requirements / sections in mind, go ahead, select the appropriate IsTR and file your returns on time to avoid penalties and interests levied as per Income Tax Act, 1961. One have to ensure to file income tax returns by 31st July.
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Which ITR Form should be used for FY2018-19 (AY2019-20)?
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