Govt Notifies ITR Forms 2020-21, Taxpayers Can Opt For New Tax Regime; Check Details Here

The new forms incorporated the bare minimum changes necessitated due to amendments in the Income-tax Act, 1961, the tax body added.

Govt Notifies ITR Forms 2020-21, Taxpayers Can Opt For New Tax Regime; Check Details Here

In a notification, the Central Board of Direct Taxation (CBDT) has intimated about new income tax return forms — ITR-1 to ITR-7 — for the assessment year 2021-22. According to the finance ministry, the new IT forms have been released. “Keeping in view the ongoing COVID-19 crisis and to facilitate the taxpayers, no significant changes have been made to the ITR forms in comparison to the last year’s forms," the CBDT said.

The new forms incorporated the bare minimum changes necessitated due to amendments in the Income-tax Act, 1961, CBDT added.

What are various ITR forms?

In order to describe investments, taxpayers will have dedicated space in each of the ITR forms — Sahaj (ITR-1), Form ITR-2, Form ITR-3, Form ITR-4 (Sugam), Form ITR-5, Form ITR-6, Form ITR-7, and Form ITR-V. 

ITR Form 1 (Sahaj) and ITR Form 4 (Sugam)

These two forms are simpler forms and means for a large number of small and medium taxpayers. Sahaj can be filed by an individual having income up to Rs 50 lakh and who receives income from salary, one house property/other sources (interest, etc.), as per the press release.

"Similarly, Sugam can be filed by individuals, Hindu Undivided Families (HUFs) and firms (other than Limited Liability Partnerships (LLPs)) having total income upto Rs. 50 lakh and income from business and profession computed under the presumptive taxation provisions, the statement mentioned. It is to be noted that both the ITR forms are not meant for individuals who are either director in a company or has invested in unlisted equity shares.

ITR-2 form

Individuals and HUFs not having income from business or profession (and not eligible for filing Sahaj) can file ITR-2. Those having income from business or profession can file ITR Form 3, it further stated.

ITR-6 form

"Persons other than an individual, HUF, and companies i.e. partnership firm, Limited Liability Partnerships (LLP) etc. can file ITR Form 5. Companies can file ITR Form 6. Trusts, political parties, charitable institutions etc. claiming exempt income under the Act can file ITR-7," the statement noted.

What are the changes?

There is no change in the manner of filing of ITR Forms as compared to last year, the tax body mentioned.  Taxpayers will have to specify if they are opting for a new tax regime. The ITR-1 Form, however, specifies that it cannot be used by an individual for whom income tax is deferred on ESOPs. Also, taxpayers will now have to mention quarterly dividend income, for the purpose of claiming relief on payment of advance tax.

The new I-T slabs will be for individuals not availing or foregoing certain specified deductions or exemptions while computing total income for tax purposes. Under this, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh will pay 5 per cent tax. Income between Rs 5 and 7.5 lakh will be taxed at 10 per cent, while those between Rs 7.5 and 10 lakh at 15 per cent.

Those earning between Rs 10 and 12.5 lakh will pay tax at the rate of 20 percent, while those between Rs 12.5 and Rs 15 lakh will pay at the rate of 25 percent. Income above Rs 15 lakh will be taxed at 30 per cent.

According to ClearTax founder and CEO Archit Gupta, this year's ITR forms do not have any major changes, and the little change as possible to make it easier for taxpayers to comply and are able to report information consistently.

Meanwhile, the Income Tax Department has issued refunds worth over ₹2.62 lakh crore to more than 2.38 crore taxpayers in 2020-21, as per the PTI report. This includes ₹87,749 crore personal income tax refunds to 2.34 crore taxpayers and ₹1.74 lakh crore worth corporate tax refunds in 3.46 lakh cases. The refunds issued in 2020-21 mark an increase of almost 43.2%, the I-T department said.