Guidelines for filling Income Tax Returns

The Central Board of Direct Taxes (CBDT) notified the instructions are guidelines to help the taxpayers for filling the particulars in ITR-1 SAHAJ, ITR-2, ITR-3 ITR-4, ITR-5, ITR-6, and ITR-7,  for the Assessment Year 2021‐22 relating to the Financial Year 2020‐21.

The CBDT has not made significant changes to ITR forms in comparison to last year to help the taxpayers in view of the ongoing crisis due to the COVID pandemic. There is no change in the manner of filing of ITR Forms as compared to last year either, the tax body further mentioned.

1. Form ITR-1 Sahaj is a simple form mostly filed by a large number of small and medium taxpayers, which can be filed by an individual having income up to Rs 50 lakh and who receives income from salary, one house property, or other sources, like interest, etc.
2. Similarly, ITR-4 Sugam can be filed by individuals, Hindu Undivided Families (HUFs), and firms (other than limited liability partnerships (LLPs)) with total income up to Rs 50 lakh and income from business and profession computed under the presumptive taxation provisions.
3. ITR-2 can be filed by the Individuals and HUFs that do not have income from business or profession, and are not eligible for filing ITR-1 Sahaj.
4. Taxpayers earning from business or profession can file Form ITR-3.
5. Taxpayers other than individuals, HUFs and companies, i.e. partnership firms, LLPs etc., can file Form ITR-5.
6. ITR-6 can be filed by the companies. Trusts, political parties, charitable institutions, etc., claiming exemption income under the Income-Tax Act will have to file ITR-7.

Extension of the due dates under Income Tax

 The Central Board of Direct Taxes (CBDT) has notified the extension of the due dates for filing Income Tax Return, Tax Audit, TDS Statement etc vide Circular No. 9 of 2021, F. No.225/49/2021-ITA-II, dated 20^th May, 2021. The Board has issued a circular under section 119 of the Income-tax Act, 1961 providing relaxation in respect of the 14 compliances as below:

As per the circular, the Statement of Financial Transactions (SFT) for the Financial Year 2020 21, required to be furnished on or before 31st May 2021 under Rule 114E of the Income-tax Rules, 1962 and various notifications issued thereunder, may be furnished on or before 30th June 2021.

      Further, the Statement of Reportable Account for the calendar year 2020, required to be furnished on or before 31st May 2021 under Rule 114G of the Rules, may be furnished on or before 30th June 2021.

     The Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21, required to be furnished on or before 31st May 2021 under Rule 31A of the Rules, may be furnished on or before 30th June 2021.

     Also, the Certificate of Tax Deducted at Source in Form No 16, required to be furnished to the employee by 15th June 2021 under Rule 31 of the Rules, may be furnished on or before 15th July 2021.

    TDS/TCS Book Adjustment Statement in Form No 24G for the month of May 2021, required to be furnished on or before 15th June 2021 under Rule 30 and Rule 37CA of the Rules, may be furnished on or before 30th June 2021.  

      The Board further said that the Statement of Deduction of Tax from contributions paid by the trustees of an approved superannuation fund for the Financial Year 2020-21, required to be sent on or before 31st May 2021 under Rule 33 of the Rules, may be sent on or before 30th June 2021;  

     The Statement of Income paid or credited by an investment fund to its unit holder in Form No 64D for the Previous Year 2020-21, required to be furnished on or before 15th June 2021 under Rule 12CB of the Rules, may be furnished on or before 30th June 2021.

       The Statement of Income paid or credited by an investment fund to its unit holder in Form No 64C for the Previous Year 2020-21, required to be furnished on or before 30th June 2021 under Rule 12CB of the Rules, may be furnished on or before 15th July 2021.

    Further, the due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31 July 2021 under sub-section (1) of section 139 of the Act, is extended to 30th September 2021.  

     Also, the due date of furnishing of Report of Audit under any provision of the Act for the Previous Year 2020-21, which is 30th September 2021, is extended to 31st October 2021.  

    The due date of furnishing Report from an Accountant by persons entering into international transaction or specified domestic transaction under section 92E of the Act for the Previous Year 2020-21, which is 31 October 2021, is extended to 30th November 2021.  

     The due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 31 October 2021 under sub-section (1) of section 139 of the Act, is extended to 30th November 2021.

     Further, the due date of furnishing of Return of Income for the Assessment Year 2021-22, which is 30th November 2021 under sub-section (1) of section 139 of the Act, is extended to 31st December 2021.

     Lastly, the due date of furnishing of belated/revised Return of Income for the Assessment Year 2021-22, which is 31 December 2021 under sub-section (4)/sub-section (5) of section 139 of the Act, is extended to 31st January 2022.

The CBDT clarified that the extension of the dates as referred to in clauses (9) (12) and (13) above shall not apply to Explanation 1 to section 234A of the Act, in cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of sub-section (1) of that section exceeds Rs. 1 lakh.

The Board further clarified that in case of an individual resident in India referred to in sub-section (2) of section 207 of the Act, the tax paid by him under section 140A of the Act within the due date (without extension under this Circular) provided in that Act, shall be deemed to be the advance tax.

Budget 2021- Direct Tax

The Union Budget 2021-22 was presented by the Hon’ble Finance Minister Nirmala Sitharaman on 1st February 2021 in the Parliament. Highlights of Direct Tax Proposals are: Budget 2021- Highlights of Direct Tax Proposals

TCS on sale of goods

In order to widen and deepen the tax net the Finance Act, 2020 has amended the provisions of section 206C to levy TCS on sale of goods by inserting a sub-section (1H) to section 206C. Which is effective from 01.10.2020.

Salient features

New Income Tax Return Forms effective from Financial year 2019-20/ Assessment year 2020-21.

Central Board of Direct Taxes (CBDT) has notified the new Income Tax Return (ITR) forms for FY 2019-20/ AY 2020-21 (i.e. ITR 1 Sahaj, 2, 3, 4 Sugam, 5, 6, 7 and ITR-V), vide Income-Tax (12th Amendment) Rules, 2020.

Few key changes notified in the Income Tax Returns (ITR) for the F/Y 2019-2020:

• House ownership: Individual taxpayers who are joint owners of house property cannot file ITR 1 or ITR 4, from now on wards.
• Passport: You have to disclose the Passport number if held by the taxpayer. This is to be furnished both in ITR 1-Sahaj and ITR 4-Sugam. Hopefully, it will be made mandatory in other ITR Forms as and when they are notified.
• Cash deposit: For those filing ITR 4-Sugam, it has been made compulsory to declare the amount deposited as cash in a bank account, if such amount exceeds Rs 1 crore during the FY.
• Foreign travel: If you have spent more than Rs 2 lakh on travelling abroad during the FY, you need to disclose the actual amount spent.
• Electricity Bill: If your electricity bills have been more than Rs 1 lakh in aggregate during the FY, you need to disclose the actual amount.
• Subsequent Investment details: Details of investment/ expenditure qualifying for deduction under chapter VIA with bifurcation of details of investment/ expenditure made during the period from April 1, 2020 to June 30, 2020. Details of payment/ acquisition/ purchase/ construction for the purpose of claiming under section 54 to 54GB, utilized between April 1, 2020 to June 30, 2020. Information regarding compliance of conditions during April 1, 2020 to June 30, 2020 for claiming deduction under section 10AA. A new schedule “Schedule DI” has been added.
• In ITR-4, PAN number is made optional if the Aadhaar number is provided; in section 44AD, one new clause has been added as the electronic mode in addition to electronic clearance and reduced the presumptive income from 8% to 6%. In section 44AE for presumptive income from goods carriages, the ceiling of maximum row is removed and a new validation “Number of vehicles should not exceed 10 vehicles at any time during the year” is added.  

Find attached CBDT notification of ITR forms: ITR 1 to ITR 7 

NEW CRITERIA FOR MSME CLASSIFICATION

Ministry of Micro, Small and Medium Enterprises [MSME] has vide Notification dated 1st June, 2020 revised definition of MSME.

Earlier, the criteria for manufacturing units and service units were different. Now those distinctions between Manufacturing and Service MSMEs are being removed. They will all be defined similarly.

Criteria for classification of micro, small and medium enterprises, namely:— 

• A micro enterprise is defined as one where the investment in Plant and Machinery or Equipment does not exceed one crore rupees and turnover does not exceed five crore rupees; 
• A small enterprise is defined as one where the investment in Plant and Machinery or Equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and
• A medium enterprise, where the investment in Plant and Machinery or Equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees. 

Please find attached notification or can be referred at:  https://pib.gov.in/PressReleasePage.aspx?PRID=1628345

Notification: MSME definition Gazette Notification

Changes in CARO 2020 in comparison to CARO 2016

MCA Notifies Companies (Auditor’s Report) Order, 2020 (CARO 2020). The CARO, 2020 is applicable for audit of financial statements of eligible companies for the financial years commencing on or after the 1st April, 2019.

 Read more: Changes in CARO 2020 in comparison to CARO 2016