BENGALURU: With the central government extending the last date for submission of ITR ( Income tax returns) forms for Assessment Year (AY) 2020-21 to December 31, 2020, taxpayers who hadn’t filed returns yet have been offered a little more time.
The new ITR forms notified for AY 2020-21 (and financial year 2019-2020) consist of a ‘Schedule DI’ which can be used to claim deductions on investments made during April 1-July 31, 2020-the extended period during which the government has permitted investors to make tax-saving investments for FY2019-20, since many had been prevented from doing so before the end of the FY on March 31 due to the Covid-19 lockdowns.
In this Schedule DI, taxpayers will have to provide details of their investments and expenditures, and payments for which they wish to claim a tax deduction or exemption. The claim for deductions should, however, not exceed the yearly limit applicable to the FY2019-20.
The government has also made it mandatory to file the ITR forms online for all for registered taxpayers, except those above 80 years of age and do not have any business or professional income. Effective from April 1, 2017, if you do not file your return within the due date, there will be a levy up to Rs 10,000 under Section 234F. In fact, ClearTax says there is a field on the forms specifically to furnish details of fees payable under Section 234F. However, a lot of confusion still prevails amongst the salaried class on whether one should file the returns at all.
Experts say that anyone who has an annual income of more than Rs 2.5 lakh and under the age of 60 years has to file the ITR forms. For the age brackets above 60 years, the minimum income slab has been increased to Rs 3 lakh (60-80 years old) and Rs 5 lakh ( above 80 years old). There are also other criteria for filing tax returns which include details on electricity bill payments higher than Rs 1 lakh or more for one year, incurring Rs 2 lakh expenditure or more on overseas travel, or having deposited Rs 1 crore or more in an account during that period.
One also has to keep in mind that s/he needs to show the interest on other sources of income including fixed deposits, recurring deposits, savings schemes, etc.-all of which are fully taxable. “This is often the mistake taxpayers make while reporting their income on ITR forms . While many generally assume that the tax deducted at the source (TDS) by the banks for their deposits is usually the solution.
The fact is that they have to report the income from interest for instance if they are eligible to pay higher taxes, since TDS deducts only 10% of the income,” Sagar Mehrotra, a tax professional said. Other than this, taxpayers are also expected to report their capital gains from investments in stocks, mutual funds, and real estate sale. There are, of course, tax rebates under each one of these categories for short-term and long-term gains.
New requirements for ITR AY2020-21
There have been several new aspects introduced in this year’s ITR returns (AY2020-21) including a new Schedule DI form, and details on high EB bills, travel expenses, etc.