Income Tax Department issues new ITR forms. Find out which form is for you!

Author: Dhruv Anand

Income Tax Department issues new ITR forms. Find out which form is for you

The Income Tax Department has notified forms for filing income tax returns with few changes. These forms include Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form Sugam (ITR-4), Form ITR-5, Form ITR-6 and Form ITR-7. ITR forms can be used by taxpayers to file their income tax return online. The process of filing of an I-T return online is known as e-filing. These tax forms are applicable for assessment year 2020-21, which means they relate to income earned in financial year 2019-20. Usually, the Income Tax Department notifies the ITR forms in the first week of April of the relevant assessment year. However, this year, the department has notified all ITR forms in the last week of May in view of the unprecedented situation prevailing in the country due to the COVID-19 pandemic. The Central Board of Direct Taxation (CBDT) had earlier notified ITR-1 and ITR-4 forms but they were later withdrawn to incorporate changes made in income tax rules in the wake of the pandemic. This time some of the key changes notified in the forms include declaration from taxpayers in detail if they have paid over Rs 1 lakh in electricity bills in a year. Taxpayers have also been given a dedicated column to declare their expenditures/income/ investments/donations made between April 2020 till June 2020, for which they can claim I-T benefits. "Taxpayers must assess their tax liability for FY 2019-20 and make sure they are maximising their Section 80C benefits if not already done so,” says Archit Gupta, founder and CEO of ClearTax. Key things to know about Income Tax Return (ITR) forms for assessment year 2020-21: ITR 1, also known as Sahaj, is available for individuals who are residents having total income up to Rs 50 lakh, having income from salaries, one house property, other sources (interest etc.), and agricultural income up to Rs 5,000. ITR-2 is available for individuals and HUFs (Hindu Undivided Families) not carrying out business or profession under any proprietorship. ITR-3 is available for individuals and HUFs having income from profits and gains in business or profession. ITR-4, also known as Sugam, is available for Individuals, HUFs and firms (other than LLP) being a resident having total income up to Rs 50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE under Income Tax Act. LLP or limited liability partnership is a partnership in which some or all partners have limited liabilities. ITR-5 is available for persons other than individual, HUF, company and person filing Form ITR-7. ITR-6 is available for companies other than companies claiming exemption under section 11 of Income Tax Act. ITR-7 is available for persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only under Income Tax Act. Additionally, ITR-V is available for verification. ITR-V is received when taxpayers file their I-T return online—without using a digital signature.

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