ITR Forms FY 2020-21: Check Latest Changes Made In Tax Forms

Earlier, dividend income up to Rs10 lakh was exempt from tax under Section 10(34) and such income were shown under the exempt income section.

Representative Image

The Central Board of Direct Taxation (CBDT) had notified new income tax return forms — ITR-1 to ITR-7 — for the assessment year 2021-22. At the time of notification, the tax body mentioned that no significant changes have been made this year because of the pandemic, but certain small changes have been incorporated in the forms.

Here are the key changes to note for taxpayers

Disclosure of dividend income:  As per the report in Mint, the dividend income has to be disclosed under “income from other sources". It is to be noted that dividends were made taxable in the hands of the taxpayers in the Finance Act, 2020, instead of dividend distribution tax to be deducted by the company or payment or declaration of dividend.

According to tax research firm Taxmann note mentioned in the Mint report, until AY21, only dividend income that was not exempt was required to be disclosed in the section ‘income from other sources’. But now all types of dividend incomes will have to be disclosed in the form.

Such incomes under the exempt income section will have to be mentioned. Earlier, dividend income up to Rs 10 lakh was exempted from tax under Section 10(34). The reference to dividend income up to Rs 10 lakh from a domestic firm has been removed from the exempt income section.

New tax regime: Under Section 115BAC, the government had introduced a new concessional tax regime in FY20 giving option to taxpayer to pay tax at lower slab rates but only after forgoing 70 deductions. Now, the taxpayer can chose to opt for the concessional tax regime under Section 115BAC in Part A of the tax forms.

Also, note that the Excel and Java versions of ITR utilities will not be available as of AY 2021-22. However, JSON as an alternative to the Excel and Java versions of ITR utilities will be available. For now ITR-1 and ITR-4 have this Offline Utility available but in the future other ITRs will be included as well. The utility built on the latest JSON technology can import and pre-fill data from the e-filing portal.