Income Tax Return Be aware of major changes to ITR forms

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Completion of the Income Tax Return (ITR) e-filing has been suspended since June 1, 2021, due to the ongoing process of migration from the old ITR filing site - incometaxindiaefiling.gov.in - to the entire new e-filing site - incometax.gov.in - scheduled for June 7, 2021.

However, in addition to the changes to the e-input site, other changes were made to the ITR Forms for the Annual Examination (AY) 2021-22 in comparison with the final AY (2020-21) and in the process of inserting revenue returns in the previous year.

According to Dr.Suresh Surana, founder, RSM India, the following are some of the key changes to the ITR forms and the process of submitting AY 2021-22:

1. Introduction to JSON Utility

The Tax Department has introduced the JSON service for submitting offline Revenue tax forms. This offline retrieval utility is expected to increase the usability of complete repositioning. Also, CBDT has announced the immediate processing of ITR, a highly interactive return preparation software, and a new online tax payment system. The new e-filing site will be integrated with a quick review of Income Tax Returns.

2. Prohibition set out thereto of using ITR 1 in the event of TDS Deducted / s 194N

Section 194N of the IT Act provides for the deduction of TDS in the event of a transfer of funds by any person exceeding the prescribed limit. However, in the event of any person filing a TDS debt in terms of Section 194N, they will not be eligible for a refund of ITR1 revenue.

Also, since TDS was deducted in 194N of the IT Act can only be claimed as compensation in respect of that year of detention, ITRs have been amended to prevent the transmission of such TDS to subsequent testing years.

3. Amendment to Schedule UD to give effect to section 115BAC

Section 115BAC provides for a special tax regime for individuals or HUFs. These special tax regimes provide permit rates, however, a taxpayer is not eligible for certain deductions and exemptions under IT Act. Since then, these tax regimes have been implemented through the Finance Act, 2020 w.e.f. 1 April 2020 ie AY 2021-21, ITRs updated to include optional tax regimes. Accordingly, the taxpayer will be required to provide Part A information (General Information) as to whether or not they will choose the Permit Tax Administration state or not.

In addition, to benefit from these components, the prospective person should reduce the further decline if it is part of a decline that has not been held in recent years. However, a one-time adjustment to WDV openness is permissible in such a case, and accordingly, Schedule UD in ITR 3 has been updated to provide such an update on the unauthorized reduction that had to be further reduced due to the section 115BAC selection.

As mentioned above, any person who chooses a consenting tax regime will not be eligible for certain deductions and exemptions and any losses resulting from such exemptions and reductions would not be permitted at present and for any subsequent years as will always be considered complete. Accordingly, the ITR Forms have been duly updated to provide for the correction of these losses.

4. Addition of changes to Dividend Regime

Previously, the Company was paying Dividend Distribution Tax (DDT) to Dividend and as a result, shareholders were taxed only if shares exceeded the Rs limit. 10 lakhs. However, the Financial Act of 2020 made changes to the entire Dividend Tax regime in the form of eliminating DDT, and accordingly, Schedule OS (Other Sources) has been revised to provide a paid share in the hands of shareholders. In addition, quarterly dividends of benefits may need to be provided in all ITR forms, enabling interest rate calculations under section 234C. Accordingly, Schedule EI (Exempted Income) which provided for the disbursement of dividends up to Rs 10 lakh has been revised.

5. Additional reporting requirements for environmental safety

Schedule 112A and Schedule 115AD require the reporting of various details regarding the long-term financial benefits arising from the transfer of shares, be they shares, equity fund units, or business trust units, as long as the transfer of the principal asset is subject to a Transaction Tax (STT). Now, the new column is added under both security reporting schedules, whether it is an assignment or a unit. In addition, as profits in such a case are created until 31 January 2018, the relevant details relating to the sale price, FMV from 31 January 2018, etc. In terms of Section 55 of the IT Act, it will have to be reported to the ITR.

6. Reporting of tax information deducted under section 194M

Section 194M provides that TDS is deducted at a rate of 5% from payments made to a contractor or commission agent or seller or specialist by Individual / HUF (not subject to the tax deduction terms under section 194C, 194H & 194J) and, as appropriate, with tax details deducted under section 194M, a certificate in Form 16D will be issued under Rule 31. The ITR forms have been amended to provide a reference to Form 16D in the event of a tax deducted from a source under section 194M. However, it is noted that no such deductions under this section will be made if the amount or, as the case may be, the collection of these contributions, deposited or paid to the occupier during the financial year does not exceed Rs 50 lakh.

7. Other Changes

  • For employees who have acquired ESOPs from the eligible start mentioned in section 80-IAC, Part B of the TTI Schedule now requires disclosure of the deferred tax amount relating to the ESOP income earned as a liability.
  • The distinctive effect of a slight exemption on Tax Payments needs to be disclosed.
  • ACCORDING TO LAST YEAR'S EXTENDED DATES, the DI system that requires the abolition of tax revenues has been removed from the ITR forms as it is no longer valid.

Previously, all revenue charged under section 115A read with section 194LC was tax-deductible at the same rate of 5 percent. As a result of amendments brought in by the Finance Act, 2020, the deduction rate is now 4 percent in respect of interest payable in certain circumstances. This leads to two different levels of tax deductions on taxable income under section 115A read with section 194LC. Sequential changes have been made to separate disclosures in ITR Forms.