filing of income tax returns for ay 2019-2020 27 may, 2019

BCAS LECTURE MEETING

Filing of Income Tax Returns for

AY 2019-2020

27th May, 2019

1

Index

Sr.

No

Topics

1 General Amendments from Finance Act 2018

2 Who has to file return electronically for A.Y.2019-20?

Applicability of ITR Forms

3 Income from Salaries, HP, CG –Amendments and Changes in ITR

4 Income from PGBP & IFOS -Amendments and Changes in ITR

5 Amendment to Income from Trusts & Changes in ITR 7

6 Changes in ITR Forms - Static Information and Schedules

2

General Amendments from Finance Act 2018

1.Individuals (other than category 2 & 3)

2. For Senior Citizens (Age: 60 – 80 Yrs.)

3. For Super Senior Citizens (Age: 80 Yrs. or above)

Slab (Rs.) Tax Rate (%)

Up to 2,50,000 NIL

2,50,001 to 5,00,000 5

5,00,001 to 10,00,000 20

Above 10,00,000 30


Up to 3,00,000 NIL

3,00,001 to 5,00,000 5

5,00,001 to 10,00,000 20

Above 10,00,000 30


Up to 5,00,000 NIL

5,00,001 to 5,00,000 20

Above 10,00,000 303


Changes in Tax Rates

A resident individual, whose taxable income does not exceed Rs.

3,50,000, can claim a tax rebate under section 87A. The amount of

rebate shall be lower of 100% of income-tax or Rs. 2,500.

Increase in cess from 3% to 4% and named as Health and Education

cess.

Surcharge for Individuals & HUFs: 10% of income tax, where total

income exceeds Rs.50 lakh up to Rs.1 crore and 15% of income tax,

where the total income exceeds Rs.1 crore.

Surcharge for firms, LLP, Co-operative societies or local authorities:

12% if total income is more than 1Cr.

Surcharge for Domestic Companies: 7% if total income is more than

1Cr. but less than 10 Cr and 12% if total income is more than 10Cr.

Surcharge for other than Domestic Companies: 2% if total income is

more than 1Cr. but less than 10 Cr and 5% if total income is more than

10r. 4


Changes in Tax Rates

10% tax on LTCG (u/s112A) exceeding Rs. one lakh.

In case of domestic companies:

Particular of turnover Tax Rates

Turnover > Rs. 50 cr. in FY

15-16 & <= Rs. 250 cr. in FY

16-17

25%

Turnover < Rs. 50 cr. in FY

15-16 & > Rs. 250 cr. in FY

16-17

30%

5


Wider scope of ‘Business connection’

w.e.f 1st April 2019, clause (a) in Explanation 2 to Section 9(1)(i)

shall be substituted.

“business connection’’ shall also include any business activities carried

through a person who, acting on behalf of the non-resident or

habitually concludes contracts or habitually plays the principal role

leading to conclusion of contracts by that non-resident and the

contracts are –

(i) in the name of the non-resident; or

(ii) for the transfer of the ownership of, or for the granting of the

right to use, property owned by that non-resident or that non-

resident has the right to use; or

(iii) for the provision of services by the non-resident; or”;

It will help in preventing base erosion and profit shifting. This will

mainly impact non - residents from non – DTAA countries

6


‘Business connection’ to include Significant Economic

Presence

In section 9,new insertion of Explanation 2A, the Significant

Economic Presence of non-resident entities in India shall be

deemed as business connection in India. (Applicable w.e.f.

1/4/2019).

It enables Govt. to levy tax on dot com companies who have

digital presence in India without any physical presence.

7


Incentive for Start-ups

Eligible Startup: Company or LLP incorporated up to 1st April

2021 and total turnover does not exceed 25 crore in 7 previous

years from the date of incorporation and hold a certificate of

eligible business from inter ministerial board of certification.

Eligible business : Innovation or development or improvement of

products or processes or services or a scalable business model with a

high potential of employment generation or wealth creation.

100% profits derived from such eligible business exempt from

income tax for any 3 consecutive assessment years out of seven

years beginning from the year in which the eligible start up is

incorporated.

8


Rationalization of Taxation provisions for Start-ups

As per Section 115BA , domestic company can opt to pay taxat the rate of 25% if they are engaged in the business ofmanufacturing or production of any article or doing research inrelation thereto.

Disputes and uncertainty on the taxability of other incomeearned by these start-ups arised whether other income of suchentities are taxable at the rate of 25% or as per other applicablerates.

The Finance Bill provides a retrospective clarificatoryamendment (effective from 01st April, 2017) that the beneficialrate of taxation of 25% is available only in respect of incomearising from the business operations of manufacturing,production, etc.

9


100% Deduction for farm producer companies

A new Section 80PA has been inserted under the Act in order

to provide 100% deduction from the gross total income of

Producer Company if following criteria are satisfied:

• Turnover in the relevant previous year does not exceed

Rs. 100 crores.

• Such Producer Company shall be engaged in marketing,

processing of agricultural produce of members,

purchase of agricultural implements, seeds, livestock for

the use of members

• Deduction can be taken from FY 2018-19 to FY 2023-

24 (period of 5 years)

10


Trading in Agriculture Commodities

Section 43(5) considers a transaction of trading in commodity

derivatives carried on a recognised association which is

charegable to Commodities Transactions Tax (CTT) as non -

speculative

However, agricultural commodity derivatives are out of the

purview of Commodity Transaction Tax (CTT). Thus trading

in agricultural commodity derivatives were treated as

speculative transactions. However, after amendment trading in

agriculture commodities are treated as non-speculative

transactions.

11


Mandatory Application of PAN in certain cases

Section 139A of Act has been amended in order to

provide that:

• PAN is mandatory for non-individual entities which enters

into financial transaction more than INR 2.50 lakhs.

• PAN is also mandatory for the authorized signatories of

such entities irrespective of their financial transactions and

income.

• It may be noted that the term “financial transaction” has not

been defined.

12


Relief from MAT who have applied for insolvency

Before amendment, while calculating book profit for MAT under

Section 115JB, lower of brought forward loss and unabsorbed

depreciation, is allowed as deduction. The amount of deduction

becomes nil if either brought forward loss or unabsorbed

depreciation is also nil.

By this amendment, company against which an application for

corporate insolvency resolution process under the IBC - 2016 has

been admitted by the Adjudicating Authority are allowed to claim

deduction of both unabsorbed depreciation and brought forward

losses from the book profit while calculating MAT.

13


Non-applicability of MAT in case of foreign company

(Retrospective Amendment from AY 2001-02 and subsequent)

As per Explanation 4A to section 115JB, MAT provisions shall

not be applicable to a foreign company whose total income solely

comprises of profits and gains arising from business referred to in

section 44B (Shipping Business), 44BB (Exploration etc. of

mineral oils), 44BBA (Operation of Aircraft), or 44BBB (Civil

Construction etc. in certain turnkey power projects).

14


Measures to promote International Finance Service Centre

(IFSC)

Amendment in section 47 of the Act, to provide exemption for the

capital gains arising from transactions entered into by a non-

resident on a recognized stock exchange located in any IFSC, if

the consideration is paid or payable in foreign currency for the

bonds or GDRs, Rupee Denominated Bonds of an Indian

company or Derivative.

AMT chargeable at the rate of 9% instead of 18.5%

In order to promote the International Financial Service Centre

(IFSC), tax to units located in IFSC, the alternate minimum tax

shall be calculated @ 9%.(applicable from A.Y.2019-20)

15


Rationalization of provisions related to prosecution for failure

to furnish return

Section 276CC of the Act provides that in case an assessee wilfully

fails to furnish ROI up to the end of assessment year, then he shall

be liable to following:

• Imprisonment of 6 Months – 7 Years with fine: If tax evaded

exceeds INR 25 lakhs;

• Imprisonment of 3 Months – 2 Years with fine: If tax evaded is

up to INR 25 lakhs.

The above provisions are not applicable if tax amount is less than

INR 3,000.

Amendment under section 276CC of the Act in order to provide that

the limit of INR 3,000 is not applicable to a Company in order to

mandate all companies to file ROI.16

Who is required to file the return of income

electronically?

Particulars

• Every tax payer shall file the income tax return

electronically except a super senior citizen (whose age is 80

years or above) who furnishes the return either in ITR-1 or

ITR-4.

• The option available with a tax payer, whose income was

below Rs. 5 lakhs during the previous year (i.e. FY 17-18),

to file the return in physical form has been withdrawn.

17


• ITR – 1 Sahaj:- For a Resident & ordinarily resident

individual (other than not ordinarily resident) having total

income upto Rs.50 lakh (which may include income from

salaries, one house property, income from other sources

(interest etc.), and agricultural income upto Rs.5,000)

• This form cannot be used for an individual who is either a

director in a company or has invested in unlisted equity

shares

• ITR – 2 :- For Individuals (other than those covered by ITR 1)

and HUFs not having income from profits and gains of

business or profession – Partners of partnership firm cannot

use ITR – 2

• ITR – 3 :- For Individuals & HUFs having income from

profits & gains of business or profession 18


• ITR – 4 (Sugam):-For Individuals, HUFs and Firms (other than

LLP) being a resident having total income upto Rs. 50 Lakh and

having income from business and profession which is computed

under sections 44AD, 44ADA or 44AE – It cannot be filed by

an individual who is either a director in a company or has

invested in unlisted equity shares

• ITR – 5 :- For persons other than (i) individual, (ii) HUF, (iii)

company and (iv) person filing Form ITR-7

• ITR – 6 :- For companies other than companies claiming

exemption under section 11

• ITR – 7 :- For Charitable Trust & Associations claiming benefit

of exemption under Section 11; For Persons including

companies required to furnish return under sections 139(4A) or

139(4B) or 139 (4C) or 139 (4D)19

Journey now on….

• CBDT notified Income Tax Returns on 05th April,2019.

• CPC released ITR 1, ITR 4 on 24/04/2019, ITR 2 on

08/05/2019 and ITR 3 on 14/05/2019 .

• TDS Returns due date 31.05.2019 hence Form 26AS

will be updated only after 10.06.2019 onwards

20

Changes in Finance Act,2018- Income from Salaries

Particulars Amendment Impact of amendment

in ITR

Standard

deduction

from salary

income

• The Finance Act, 2018

introduced standard deduction

upto Rs. 40,000/- or the amount

of salary received whichever is

less in place of transport

allowance and medical

reimbursement.

•This Standard Deduction can

even be claimed against Pension

from the employer.

ITR 1,2,3 and 4 have

been amendment

wherein a new row is

added to enable the

assessee to claim the

benefit of standard

deduction.

21

Changes in ITR Form -Income from Salary

Particulars Change in Return Impact in ITR

Salary

Income to

be reported

on gross

basis

• For A.Y. 2019-20, an individual has to

mention his gross salary and then the

amount of exempt allowances u/s 10 shall

be deducted to arrive at the net figure of

salary. Further new ITR forms seek

separate reporting of all deductions u/s 16:-

-Standard deduction

- Entertainment allowance

-Professional tax

• The new ITR forms are in sync with

amended Form 16 notified on 12th April

2019

• Earlier forms required an individual to

report salary amount excluding all exempt

and non exempt allowances, perquisites and

profit in lieu of salary.

ITR 1,2,3 & 4

22

Changes in ITR Form -Income from Salary

Deductions under salary are bifurcated into standard

deduction, entertainment allowance and professional tax.

23

Changes in ITR Form-Income from Salary


TAN of

employer

mandatory

in Salary

Schedule

• TAN(Tax Deduction and Collection

Account Number) of the employer is

required to be furnished if tax is

deducted by the employer on the said

income from salary.

• Previously, PAN of the employer was

required to be quoted which wasn’t

mandatory.

ITR 2 & 3

ITR 1 & 4 are not

impacted by this

change as the

relevant forms do not

have a separate

Schedule of Salary.

24

Changes in ITR Form-Income from Salary


Pensioners’

Checkbox

• Under Part A, ‘Pensioners’ checkbox has

been introduced under the ‘Nature of

employment’ section.

ITR 1 ,2, 3 &4

25

Changes in ITR Form –Chapter VIA


Assesse

claiming

Deduction

u/s 80 GGA

• New Schedule has been inserted asking

for details of donations for scientific

research or rural development:-

i) Relevant clause under which deduction

is claimed

ii) Name and address of the donee

iii) PAN of Donee

iv) Amount of deduction with breakup of

cash and other mode

v) Eligible amount of donation

ITR 2 & 6

26

Chapter VI-A deductions and other amendments

affecting individuals

Section 80D of the Act has been amended, to provide the deduction in

respect of Senior Citizen to Rs. 50,000/- instead of Rs. 30,000/-.

Under section 80DDB, the monetary limits for medical treatment of

specified diseases (certain critical illness, as specified in Rule 11DD) is

increased to Rs.1,00,000/- in case of both senior and super senior citizens.

Under Donation entitled for Deduction under section 80G – bifurcation is

provided between donation given in cash and by other mode

Sec. 10(12A)

• Tax free withdrawal from National Pension Scheme (NPS) referred to in

section 80CCD extended to non-employee.

• However, the exemption given for partial withdrawal form NPS to

employees u/s 10(12B) from A.Y. 2018-19 has not been extended to non-

employees.

27

Changes in ITR Form- Income from House Property


Deemed let out

property

option now in

ITR 1 & 4

• The option of deemed let out

property shall be selected in respect of

that house property which has not

been claimed as SOP by the assessee.

• ITR 1 & 4 can be used only in case

of income from only one house

property.

ITR 1 &4

ITR 2,3,5,6 and 7

already had three

options namely:-

-Self Occupied

Property

- Let Out Property

- Deemed Let Out

Arrears/unreal

ised rent

received to be

reported

property wise

• ‘Arrears and Unrealised rent

received during the year less 30%’ is

added as a new row and shall be

reported Property wise.

•Special Provision for the same was

brought by Finance Act, 2016

ITR 1,2,3,4,5,6 &7

Up till last year

assessee was unable to

file ITR 1 & 4 if

income from

arrears/unrealised rent

was received.28

Changes in ITR Form- Income from House Property


PAN of tenant • Furnishing of PAN of tenant is

mandatory, if tax is deducted u/s

194-IB and TAN of tenant is

mandatory if tax is deducted

under section194-I.

ITR 2,3,5 & 6

Additional line item added in computation

29

Changes in Finance Act, 2018- Income from Capital

Gains


in ITR

Withdrawal

of Section

10(38)

• The Finance Act,2018

withdrew exemption of tax on

long term capital gains arising

from transfer of securities, being

equity shares, units of equity

mutual fund or units of business

trust by inserting Section 112A

w.e.f A.Y. 2019-20.

• Separate entry of transfer of

securities will have to be inputed

in the ITR as a separate column

of FMV.

• ITR 2,3,5 and 6

30


Gains


in ITR

LTCG u/s

112A

• 10% tax on LTCG will be

taxed if LTCG exceeds Rs.1

lakh.

• It shall be charged on the

capital gains as computed

without giving the benefit of

indexation (i.e. without

giving effect to the first and

second provisos to section

48)

• ITR 2,3,5 and 6

31


Gains


in ITR

LTCG u/s

112A

• Applicable to LTCG arising

from transfer of a long term

capital asset being an equity

share in a company or a unit

of an equity oriented fund or

a unit of a business trust.

• In case of shares, STT has

been paid on acquisition and

transfer of such shares

• In case of Units of Equity

Oreinted Fund of a Mutual

Fund and Business Trust on

which STT is paid at the time

of redemption of such units

• ITR 2,3,5 and 6

32


Gains


in ITR

Cost of

acquisition in

respect of

LTC asset

acquired

before 1st Feb

2018

•Cost of acquisitions shall be

deemed to be the higher of

a)the actual cost of

acquisition of such asset; and

b) the lower of –

(I) the fair market value of

such asset; and

(II) the full value of

consideration received or

accruing as a result of the

transfer of the capital asset.

• ITR 2,3,5 and 6

33


Gains

Particulars Amendment Impact of

amendment in ITR

Fair market

value mean

Highest price of the capital asset

quoted on such exchange on 31st

January, 2018,where the capital

asset is listed on any recognized

stock exchange, if no trading in

such shares on such exchange on

31st January 2018, the highest price

of such asset on such exchange on

a date immediately preceding 31st

January 2018. Net asset value of

such asset as on the 31st January,

2018 where capital asset is a unit

and is not listed on recognized

stock exchange

•ITR 2,3,5 and 6

34


Gains

35


Gains

36

Changes in Finance Act,2018-

Income from Capital Gains

S. N.Year of Purcha

se

Cost Price

Fair Market Value

on 31.01.1

8

Year of sale

Sale Price

Lower of MV & SP

Cost u/s.

55(2) (ac)

Capital Gains u/s.

112AScripHigher of (A) & (B)

(A) (B)1 INFY 2011 700 1,500 2018 2,000 1,500 1,500 5002 RIL 2014 500 900 2018 1,100 900 900 200

3 L & T 2015 800 1000 2019 900 900 900 0

4 HUL 2017 600 550 2019 450 450 600 -150

2,600 3,950 4,450 3,750 3,900 55037


Income from Capital Gains

38


Income from Capital Gains• There is a difference in computation in utility .

• The utility would compute capital gains as Rs. 500

while the correct capital gains are Rs. 550.

• Therefore, we would like CPC to address this issue so

that capital gains will be computed correctly and tax

payers can file their return correctly.

39


Gains


in ITR

Section 54 EC

exemption can be

claimed on

transfer of Land

& Building only

• The scope of this

exemption is significantly

curtailed and now it is

allowed only if long term

capital gain arising from

transfer of an immovable

property is invested in

specified bonds.

• The time limit of such

bonds is increased to 5

years from 3 years.

ITR 2,3,5& 6 have been

amended to restrict this

exemption to transfer of

immovable property

only.

40


Gains

Particulars Amendment Impact in ITR

Full Value of

consideration in

case of transfer of

land or building

(Section 43CA, 50C

and 56(2)(x))

• Actual sales consideration shall

be deemed to be the full value of

consideration if stamp duty value

does not exceed 105% of actual

sales consideration.

ITR 2,3,5 & 6

41


Gains


Profit on

Conversion of

inventory into

capital asset to be

reported under

profit and loss

account

• Finance Act 2018 brought

amendment to tax any profit or

gain arising on conversion of

inventory into capital asset.

• Insertions have been under profit

and loss account to report such

income.

ITR 3,5&6

42

Changes in ITR Form changes-Income from Capital Gain


Transfer of

Immovable

property,

additional

information

now

required

• Mandatory to furnish the following

information about the buyer, if assessee

transfer immovable property:-

-Name of the buyer

- PAN of the buyer

- Percentage share

- Amount

- Address of property

- Pin code

• It is mandatory to furnish the PAN of the

buyer in ITR form if tax has been deducted

u/s 194IA or PAN is quoted by buyer in the

registration documents.

•ITR 2,3,5 &6

43

Changes in ITR Form changes-Income from Capital Gain

Transfer of Immovable property, additional

information now required

44

Changes in ITR Forms-Income from Capital Gains

Changes in ITR-6

In schedule on set-off of current year capital losses with current year

capital gains, includes details of capital gain chargeable under

DTAA.

45


amendment in ITR

Tax Rate for

small domestic

companies

• The Finance, Act 2018 has

increased the turnover limit from

50 crores to 250 crores to apply

concessional rate of 25% tax rate.

• ITR 6

Gain/Loss on

account of

foreign

exchange

fluctuations

• The Finance Act,2018 has

inserted a new section 43AA to

provide for the tax treatment of

foreign exchange fluctuations

other than those dealt with Section

43A.

•ITR 3,5 and 6 have

been amended in

Part A-P&L wherein

clause for “profit on

account of currency

fluctuations” have

been replaced with.

Changes in Finance Act,2018-Business/Profession

Income

46


Income


in ITR

• Gains/Loss arising from

foreign exchange

fluctuations shall be allowed

as income/loss u/s 43AA if

computed in accordance with

ICDS-VI.

Effect of this will have

to shown under

Schedule ICDS.

47


amendment in

ITR

Presumptive

Income u/s

44AE in case of

goods carriage

• The Finance Act,2018 made an

amendment u/s 44AE to provide

that in case of heavy goods

vehicle(> 12MT gross vehicle

weight), income would be deemed

to be an amount equal to Rs.1,000

per ton of gross vehicle weight or

unladen weight per month for

each goods vehicle.

• The vehicles other than heavy

goods vehicle will continue to be

taxed as per the existing scheme.

ITR 3,4,5 & 6

One cannot add

vehicle details of

more than 10 as

the addition of

rows is restricted

in the utility.

Changes in Finance Act,2018- Business or Profession

Income

48


Income


in ITR

• Gains/Loss arising from

foreign exchange

fluctuations shall be allowed

as income/loss u/s 43AA if

computed in accordance with

ICDS-VI.

“ Gain or loss on

account of Foreign

exchange fluctuations

under section 43AA.

49

Particulars Changes in ITR Impact in ITR

No separate

reporting of

interest paid to

partners by

firms

• ITR 5 doesn’t require bifurcation

anymore of Interest Paid to Partners

and Non Partners unlike last year.

• The Interest paid to Foreign

company, Outside India, Non

Resident & Others remains as a

bifurcation.

ITR 5

Schedule P&L

to seek more

information

• New parts have been inserted in place

of existing Part A P&L.

ITR 3,5& 6

Changes in ITR Form -Business or Profession Income

50


- Manufacturing Account

- Trading Account

- Profit & Loss Account.

• For assessee engaged

in manufacturing shall

be required to fill all

three account to arrive

at profit and loss

account whereas

service providers and

traders can directly

start from trading

account.


51


Income

generated from

partial

agricultural

and partial

business

operations to

be reported

separately

• A person having

business income from

agricultural activities

will have to disclose

income in Schedule BP

• And Exempt amounts in

Schedule EI as per Rule

7,7A and 7B of the IT

Rules,1962

ITR 3,5 &6


52


Disclosure of

name and

address of

debtor in case

of bad debts

• Bad debts claimed of an

amount of more than Rs 1

lakh would have to be

disclosed with PAN of such

debtor.

• No information of debtors

was required to be furnished

in old ITR’s if PAN was not

available.

• Now, name and address of

debtor is required to be

furnished in case of PAN of

such debtor is not available.

ITR 3,5 & 6


53


GSTIN and

GST turnover

• Last year forms had a

new Schedule requiring

GSTIN of the assessee

and turnover as per

GST return filed by

the assessee, only for

who had opted for

presumptive taxation

and filing return in ITR

4.

• Same schedule has been

incorporated in ITR’s

3,5& 6.

ITR 3,4,5&6

Tax Audit report has

deferred clause asking for

the details of the turnover as

per GST Returns.

Having the same in ITR will

increase the burden of data

collation.


54


Disclosure of

turnover and

profit from

speculative

activities

• A separate schedule has

been inserted in

Schedule P&L which

has the following

information:-

- Turnover from

speculative activities.

- Gross profit

- Expenditure

- Net income from

speculative activities.

ITR 3,5& 6

Under ITR 6, turnover and

income from intra day

trading are required to be

reported under trading

account.

This is informative, it does

not seem to total up to any

other Schedules


55


No reporting of

transactions

with registered

and

unregistered

suppliers under

GST

• Last year every company,

whose accounts are not

required to get their accounts

audited u/s 44AB had to report

details of transaction entered

with registered or unregistered

suppliers under GST. This

requirement has been removed

in new ITR 6.

ITR 6

THE ONLY

CHANGE TO

MAKE YOU

HAPPY ….

Disallowance

under Section

14A, separate

reporting

• Separate reporting in Schedule

OI is required for disallowance

made under Section 14A.

ITR 3,5& 6


56

Particulars Changes in ITR Impact in

ITR

Set off of

losses against

income from

life insurance

business

• Initially, Income from Life Insurance

business would not allow to set off any

losses as the income would not reach

Schedule CYLA & BFLA

• Income from LI Business is separately

reportable for inter head set off of Current

year and then intra head set off of losses

for Previous years’

ITR 5 & 6

Reporting of

audit under

any Act

separately in

ITR

• New clause asking for details regarding

the liability of assessee for audit under any

Act other than Income Tax Act under ITR

3. – Only possibility for GST Audit but

HOW?

ITR 3


57


ITR

Reporting of

ultimate and

immediate

parent

company

• Foreign companies are required to

report the following information:-

- Name of the parent company

- Address

- Country of residence

- PAN(if allotted)

- Tax Identification No. or Unique

Identify No. of the parent company.

ITR 6

Gross Receipts

through A/c

payee cheque

/draft or any

mode

• Assesses not liable to maintain books

of account u/s 44AA are required to

report Gross Receipts by splitting

receipts through a/c payee

cheques/draft/ECS AND any other

mode.

ITR 3,5 & 6

i.e.

Cash/PAYTm,

BHIM/Bearer

cheq etc….


58


Foreign

companies to

report Gross

Receipts and Net

profit if on

presumptive

scheme

• Foreign Companies whose total

income comprises solely of

presumptive income computed in

accordance with Section

44B,44BB,44BBA are now

required to furnish gross receipts

and net profits from such business

computed under each provision in

Part A-P&L

ITR 6

Changes in ITR Form- Business or Profession Income

59

Changes in Finance Act,2018- Income from OS


amendment in

ITR

Section 80TTB

deduction to

senior citizens

• Interest income earned from savings

deposits, deposits with banks or post

office or co-operative banks by a

senior citizen shall be allowed a

deduction of Rs.50,000/-.

ITR 1,2,3 & 4

DDT on deemed

dividend

covered under

section 2(22)(e)

Dividend distribution tax @ 30% has

been levied on loan/advance given by

a closely held companies to its

shareholders who have substantial

interest in such company, or to a

concern in which such shareholder has

been substantially interest is deemed

dividend u/s 2(22) (e) of the Act.

ITR 6

New rate in

Schedule DDT

with 15% -

Now you can

see 30%

60

Changes in Finance Act,2018- Income From OS


amendment in ITR

Consequently shareholder is not

liable to pay any tax on such

deemed dividend.

A new entry for deemed dividend

has been inserted in Schedule

DDT.

61


Recognized PF

needs to be

reported

separately

• Taxable portion of Recognized

Provident Fund now requires

disclosure assessment year wise,

Income Tax benefit and Tax benefit

as against a consolidated figure in

previous year ITR.

ITR 2,3,5,6 & 7

No. of

employees

deployed in and

outside India

Nature of

residuary

income

• It is mandatory for an assessee to

specify the nature of income

taxable under the head income

from other sources for ITR 1 and 4.

• Even SAHAJ – no more simple

ITR 1 &4

Changes in ITR-Income from Other Sources

62


ITR

Bifurcation of

interest income

• Separate reporting of interest

income from

- Savings Bank Interest

- Deposits

- Income Tax Refund

- In the nature of pass through

- Others

ITR

1,2,3,4,5,6&7

Accrual or

receipt of

dividend and

income by way of

lotteries,

crossword puzzle

• Assessee can disclose the accrual

or receipt of dividend income

taxable u/s 115BBDA and income

by way of winnings from lotteries,

crosswords puzzle for each quarters

of Advance Tax

ITR 2,3,5,6&7

– Schedule OS

Changes in ITR- Income from Other Sources

63


• Such disclosures are specifically

inserted for determining when

such income has accrued and

when it has been received so that

liability for advance tax can be

determined accordingly.

Details of

agricultural land

to be furnished if

agriculture

income exceeds

Rs. 5 lakhs

• Additional details in new ITR

forms if net agricultural income

earned during the year exceeds

Rs. 5 lakhs:-

- Name of the district(with PIN

code) where agricultural land is

located

ITR 2,3,5 & 6


64


- Measurement of agricultural land

in Acres.

- Whether land is owned/held on

lease

- Whether land is irritated/rain-

fed.


65


amendment in

ITR

Amounts

disallowed u/s

40/40A for

charitable or

religious trusts

or institution

• Section 11 was amended to provide

that trusts/institutions shall be

required to follow the provisions of

TDS and make all expenses in excess

of Rs.10,000 through banking

channels.

• The provisions of Section 40(a)(ia)

and expenses disallowed under

Section 40A(3) and 40A(3A) were

made applicable while computing the

application of income in case of trusts

or institution.

ITR 7

Schedule ER and

Statement of

Income

-How linked

unknown …..

Changes in Finance Act,2018-Trust

66


Business Trust

and Investment

Fund now to use

ITR 5 instead

ITR 7

• Persons who are required to

furnish Income Tax Return u/s

139(4A),139(4B),139(4C),139(4D)

,139(4E) or 139(4(F) use ITR -7.

• Amendment in Rule 12 of the IT

Rules to exclude Section 139(4E)

and Rule 139(4F) which are

applicable to Business Trust and

Investment , they must use ITR-5

ITR 5 &7

Changes in ITR Form- Trust

67


• New rows have been added in

ITR 5 to claim deduction of

income as referred to in

Section

10(23FB),10(23FBA),10(23F

C) & 10(23FCA).

Aggregate Annual

Receipts for

projects/institution

column has been

removed

• Column of Aggregate Annual

Receipts from

projects/institution run by

assessee in Schedule of

Personal Information has

been removed for AY 2019-20

ITR 7 – Not to

inform the various

projects run by

the trust anymore

Changes in ITR Form - Trust

68


ITR

Registration under

any other law needs

to be reported

• Apart from the registration

number allotted by the IT, now…

From AY 2019-20, further details

of registration under any other law

are now required to be reported.

ITR 7

Schedule AI, ER &

EC applicable only

to trusts/institution

claiming exemption

u/s 11,12 & 10(23C)

(iv),(v),(vi),(via)

• Now the Political Parties and

Electoral Trusts are not required to

Fill Schedules AI,ER and EC.

ITR 7


69


• For AY 2019-20 , only trust

claiming exemption under

Section 11,12 or 10(23C)

(iv),(v),(vi),(via) are only

required to fill Schedule

AI,ER & EC.

Schedule ER

amended with more

details of

expenditure incurred

by trust/institution

• Expenses reported in

Schedule ER have been

bifurcated into two

categories:-

- Establishment and

Administrative Expenses

ITR 7


70


- Expenses incurred on objects of

trusts/institution.

• Further, in Schedule ER , the trust is

required to mention following sources of

funds:-

- Income derived from the property/income

earned during previous year.

- Income deemed as application in any

preceding year

- Income of earlier years up to 15%

accumulated or set apart

- Borrowed Funds

- Others


71


Application of

income from

borrowed funds or

previous year’s

not allowable

• Out of 100% of the income, 15%

is automatically deemed to be

applied for the objects of the trust

and balance 85% of its income to

get exemption under section

11/12.

• If application is made out of

borrowed funds then exemption

under section 11 is allowed not at

the time of application of such

funds but at the time of

repayment of borrowed funds.


72


ITR

• New ITR 7 has been amended to exclude

the amount of application of income:-

- Application of borrowed funds

- Income which has been deemed to be

applied in preceding year on filing Form 10.

- Previous years accumulation upto 15% of

income.

New

Schedules

for different

classes of

assessees

• Four New Schedules IE-1,IE-2 , IE-3 and

IE-4 for trusts claiming exemption u/s

10(21),10(22B),10(23B), 10(23D),

10(23DA),10(23EC),10(23ED),10(23EE),

10(29A),10(46), 10(47) 10(23A),

10(24),10(23C)(iiiab),10(23C)(iiiac),210(2

3C)(iiiad) and 10(23C)(iiiae).

ITR 7

Exempt

income u/s

10


73


ITR

Exemption u/s

11(1A) removed

from Capital

Gain

• When a property held under trust is

transferred and consideration is

utilized for acquiring another capital

asset, then capital gains is deemed to

have been applied for

charitable/religious purposes as per

Sec 11(1A).

• It was required to be reported in

Schedule Capital Gains up till AY

2018-19,now it is reported in

Schedule EC(Application of Income

on Capital Account) as it is allowed

on application on capital account.

ITR 7


74


ITR

Separate

fields

inserted for

claiming

exemption

u/s 10

• Separate fields have been inserted for

claiming exemption u/s 10 for the following

provisions:-

- Section 10(23AAA)

Income of a fund established for welfare of

employees.

- Section 10(23EC)

Income of the notified investor protection fund set

up by commodity exchange.

- Section 10(23ED)

Income of Investor Protection Fund set up by a

depository.

- Section 10(23EE)

Income of Core Settlement Guarantee Fund.

- Section 10(29A)

Income of coffee board, rubber board etc.

ITR 7


75


ITR

Schedule

MAT and

AMT

removed from

ITR 7

• Schedules relating Minimum Alternate

Tax and Alternate Minimum Tax have

been removed from ITR 7.

• Persons filing ITR-7 for AY 2018-19

now have to file ITR 5/ITR 6 if they are

liable to pay AMT and MAT.

ITR 7

? Trust

having

exempt and

business

income

Violation of

Section

13(1)(c)/(d)

• Income of trust shouldn’t be used for the

benefit of its trustees and their relatives.

If the trust fails to comply with any of

such conditions, exemption shall be

withdrawn.

• Separate reporting under ITR 7 is

required if exemption is denied to due

aforesaid reasons

ITR 7


76


ITR

Additional

information with

respect to

residential status

• Assessee is now required to

provide inform with respect to

his/her residential status such as:-

- No. of days stay in India.

- Jurisdiction of his residence

- Tax identification Number in case

of a non-resident.

• Earlier forms, only required the

assessee to declare the residential

status as resident, resident but not

ordinarily resident and non-

resident.

ITR 2,3

New columns to be

reported for pass

through income

• Reporting of pass through income

in Schedule OS, Schedule HP and

Schedule CG.

ITR 2,3,5,6

& 7

Changes in ITR Form – Static Information & Schedules

77


ITR

Schedule

AMT inserted

under new

ITR 2

• If an Individual/HUF who don’t have

income from business or profession can

use ITR 2 for filing his return of income

if he is liable to pay AMT.

ITR 2

ITR 4 cannot

be used by

Non Residents

/if total

income is

more than

Rs.50 lakhs

• From AY 2019-20 , a taxpayer whose

total income is more than Rs.50 lakhs

shall not be able to file the return of

income ITR 4.

• Hence, Schedule AL has been removed

from ITR 4.

ITR 4


78


ITR

Who cannot

use ITR 4

• Following person cannot use ITR 4 for

AY 2019-20:-

- HUF, being a not ordinarily resident

- Not Ordinarily or Non-Resident

Individual

- Non-resident Partnership Firm

- Ordinarily Resident Individual, HUF or

Resident Firm:

whose income is more than 50 lakhs

who held unlisted shares during the year

- A Ordinarily Resident Individual who:-

o wished to claim deduction u/s 80QQB/

80RRB


79


ITR

o is governed by the Portuguese Civil

Code

o is a Director in a Company

o is taxable for an income in respect of

which tax is deducted in the name of

other person

Separate

schedules for

income taxable

on presumptive

basis

• Separate schedules for computation of

income taxable on presumptive basis

u/s 44AD/44ADA/44AE have been

inserted under Profit & Loss account.

• Separate disclosure for all the 3

sections

ITR 3,5 &6


80


ITR

Business Name,

Code &

Description for

assessee opting

for presumptive

scheme

• The requirement to disclose

Business Name , code & description

was required to be reported for ITR

3,5 & 6 only. From AY 2019-20,

now even ITR 4 seeks these details.

ITR 3,4,5 & 6

Information to

be furnished by

an Artificial

Juridical

Person(AJP)

• Executor of Artificial Juridical

Person is now required to mention

yes or no if it’s a Foreign company

ITR 5


81


ITR

Identification of

ghost directors

and shell

companies

• Government has made it

mandatory for every director in a

company to e-file KYC Form

DIR 3,otherwise his DIN shall be

deactivated.

• To identify shell companies and

ghost directors, every director in

a company shall Only use ITR 2

or ITR 3 as the case may be.

• If only you have salaries and

director of a company, then you

need to file ITR 2.

ITR 1,2,3 & 4


82


ITR

• If an individual has been a director in a

company at any time during the previous

year, following information has to be

provided:-

- Name of the Company

- PAN

- Whether shares of the company are

listed/unlisted?

- DIN

Schedule FA

expanded

• Following changes have been made in

Schedule FA:-

- Details of Foreign Depository account

are also required besides foreign bank

accounts.

ITR 2,3,5,6

& 7


83

Particulars Changes in ITR Impact

in ITR

Depository accounts are the account in which cash or

securities are deposited by the account holder.

- Foreign Custodial accountsCustodial account is an account which is set-up for the

benefit of any other person called beneficiary and is

managed and administrated by a representative known

as custodian.

- Foreign equity and debt interest held in any entity

- Foreign cash value insurance contract or annuity

contract.

Cash value insurance is a particular form of life

insurance whereby the premium typically remains same

throughout life of the policy and a portion of that

premium goes towards the death benefit while another

portion goes towards cash a/c that earns interest for the

policy holder


84


ITR

Investment in

unlisted

companies

• To keep a check on issue of shares by

a closely held companies and

investment made therein by

shareholders , a new table has been

inserted in new ITR form to seek the

following details:-

- Name of the company

- PAN of the company

- No. and cost of acquisition of shares

held at the beginning of the year

- No. of shares, face value, issue

price(purchase price) and date of

purchase of shares acquired during

the year.

ITR 2,3 &5


85


ITR

- No. and sale consideration of shares

transferred during the year

- No. and cost of acquisition of shares

held at the end of the previous year.

Reporting of

assets and

liabilities by

start-ups and

unlisted

companies

• New Schedules AL1 and AL2 have

been inserted in ITR forms where in

details about the assets and liabilities

are required to be furnished such asdate and cost of acquisition of asset,

purpose for which asset is used, PAN of the

person from or to whom loan or advance is

given or accepted, vehicle registration

number, etc.

ITR 6 –

Unlisted

Companies


86


ITR

Reporting of

shareholding

by start-ups

and closely

held

companies

• ITR forms have introduced a new

schedule “Schedule SH 2” wherein

start-ups are required to provide the

following information on the

shareholders and the share applicant

(in case allotment is pending):-

- Name of the shareholder

- category of shareholder

- Type of share

- PAN of shareholder

- Date of allotment/Date of application

of shares

- Number of shares held/No. of shares

applied for by the shareholder

ITR 6


87

Particulars Changes in ITR Impact of

amendment

in ITR

- Face value per share

- Issue value per share

- Paid up value per share

- Share application money in case allotment

is pending

- Share premium

• In case a person is a shareholder during the

previous year but ceased to be a shareholder

at the end of the previous year following

additional information is required:-

- Date on which he ceased to be shareholder.

- Mode of cessation

- PAN of new shareholder in case of transfer.


88

A Word of caution to avoid any filing errors

89

• Instructions for all ITR Forms are available on thewebpagewww.incometaxindia.gov.in/pages/download/incometaxreturns

• Refund reissue are causing and will cause troubles incase your bank account and CPC account are not pre-validated. Use of DSC and EVC have becomeinevitable

90

http://www.incometaxindia.gov.in/pages/download/incometaxreturns

Thank You!!!!

CA Divya Jokhakar

Partner

B.D. Jokhakar & Co.

Chartered Accountants

[email protected]

CA Hardik Mehta

Partner

M.B. Nayak & Co

Chartered Accountants

[email protected]

91

filing of income tax returns for ay 2019-2020 27 may, 2019

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