EY Tax Alert CBDT notifies tax return forms for tax year 2019-20

 
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3 June 2020

                                               EY Tax Alert
                                               CBDT notifies tax return
                                               forms for tax year 2019-20

Tax Alerts cover significant        Executive summary
tax news, developments and
changes in legislation that         This Tax Alert summarizes the key amendments made to the Income Tax Return (ITR)
affect Indian businesses. They      forms for tax year 2019-20, vide Notification No. 31/2020 dated 29 May 2020
                                    (Notification) issued by the Central Board of Direct Taxes (CBDT)[1]. The said
act as technical summaries to
                                    Notification has also amended Rule 12 of the Income Tax Rules 1962 (Rule 12) to
keep you on top of the latest tax   restore eligibility of the resident taxpayers to file ITR - 1 Sahaj and ITR - 4 Sugam which
issues. For more information,       was excluded by earlier Notification No. 1/2020 dated 3 January 2020 (January
please contact your EY advisor.     Notification). The January Notification earlier had debarred those taxpayers from filing
                                    ITR-1 Sahaj and ITR-4 Sugam who were jointly holding a house property, or, had
                                    deposited an aggregate amount exceeding INR 10M in one or more current bank
                                    accounts or, had incurred foreign travel expenditure of an aggregate amount
                                    exceeding INR 0.2M or, had incurred electricity expenditure of an aggregate amount
                                    exceeding INR 0.1M.

                                    [1] Apex   body of direct tax administration in India
shall not be eligible to file ITR-1 Sahaj.
The modifications made in the new ITR forms are majorly
                                                                               Such a taxpayer is:
consequential to amendments made in the provisions of
the Income-tax laws (ITL) such as option provided in                               ▪    A taxpayer who had deposited an
secondary adjustment to taxpayer to pay off additional                                  aggregate amount exceeding INR
tax, details of compliance of conditions for enhancement                                10M in one or more current bank
of limit for tax audit upto INR50M, interchangeable use                                 accounts; or
of Aadhaar number and Permanent Account Number
(PAN), Pass through of losses from investment fund to                              ▪    A taxpayer who had incurred
                                                                                        foreign travel expenditure of an
unit holders, etc.
                                                                                        aggregate amount exceeding INR
                                                                                        0.2M for himself/herself or any
Further, separate schedule is introduced for providing                                  other person; or
details of investment/deposits/payments made from 1
April 2020 to 30 June 2020 for claiming benefit in tax                             ▪    A taxpayer who had incurred
year 2019-20 in line with relaxation granted vide                                       electricity expenditure of an
Taxation and Other Laws (Relaxation of Certain                                          aggregate exceeding INR 0.1M.
Provisions) Ordinance 2020.

                                                                     Concerns were raised by the stakeholders on
Background                                                    ►
                                                                     curtailment of scope of simplified ITR forms. CBDT,
                                                                     addressing these concerns, released the Press
                                                                     Release dated 9 January 20204 (Press Release) to
                                                                     clarify that taxpayers who hold single house
►   The CBDT, vide the Notification, has amended Rule
                                                                     property in joint ownership shall also be allowed to
    12, as also notified the ITR forms, for all categories
                                                                     furnish their tax returns in simplified ITR forms if
    of taxpayers for tax year 2019-20 (Assessment Year
                                                                     they are otherwise eligible to file the same. This
    2020-21). However, the instructions for filing the
                                                                     clarification restores the pre-amendment position.
    ITR forms are awaited.
                                                                     Similarly, taxpayers satisfying the
                                                                     Deposit/Expenditure criteria shall be allowed to file
                                                                     their tax returns in ITR-1 Sahaj.

Changes in Rule 12 –                                          ►      The legislative amendment is made in Rule 12 to
                                                                     give effect to the clarification issued vide the Press
Applicability of simplified ITRs                                     Release.

widened again!
                                                              Key changes in ITR Forms
►   Rule 12 provides for specified taxpayers (e.g. small
    taxpayers and taxpayers offering income under             1.         Common amendment made in different ITR
    presumptive taxation) to file their returns under the                forms:
    simplified ITRs (ITR-1 Sahaj and ITR-4 Sugam)
    containing only few disclosure requirements.              1.1.       Amendment relating to Deposit/Expenditure
                                                                         Criteria (ITR 1, 2, 3): If a taxpayer is filing the
►   The CBDT vide Notification No. 1/2020 dated 3                        tax return on satisfaction of Deposit/
    January 2020 (January Notification2) had already                     Expenditure criteria, the taxpayer is required
    notified two ITR Forms, being ITR-1 Sahaj and ITR-4                  to disclose the criteria fulfilled and the
    Sugam for tax year 2019-20. Along with the same,                     aggregate amount of bank deposit or
    the CBDT had also amended Rule 12 to narrow down                     expenditure incurred on foreign travel or
    the eligibility of the taxpayers who were entitled to                electricity depending on such condition, as the
    file ITR-1 and ITR-4 in following two cases:                         case may be.

         o    Taxpayer who jointly owns a house property      1.2.       Disclosure of type of company for taxpayers
              with two or more persons shall not be                      being director in a company or taxpayers
              eligible to file ITR-1 Sahaj or ITR-4 Sugam;               holding unlisted equity shares:
              and
                                                                         (i)       If the taxpayer individual was director
         o    Taxpayer who is required to furnish tax                              in a company during the tax year,
              return only due to operation of seventh                              he/she was required to furnish
              proviso to Section (s.) 139 of the Indian Tax                        certain information, like name of the
              Law3 (ITL) (Deposit/Expenditure criteria)                            company, whether shares are listed,
                                                                                   PAN and Director Identification
                                                                                   Number. An additional disclosure

2                                                             4
  Refer our alert titled as “CBDT notifies two income-tax       Refer our alert tiled as “CBDT relaxes eligibility conditions
return forms (ITR-1 Sahaj and ITR-4 Sugam) for tax year       for filing of two income tax return forms (ITR-1 Sahaj and
2019-20” dated 7 January 2020                                 ITR-4 Sugam) for tax year 2019-20” dated 10 January 2020
3
  Income-tax Act 1961
requirement has been inserted, being                 disallowed under provisions of ITL are required
                   “Type of company”, wherein a                         to be reported separately.
                   dropdown list shall be provided to
                   identify types of company.5 (ITR 2 and      1.6.     Computation of income from life insurance
                   3)                                                   business (ITR 5 and 6): A separate line item is
                                                                        included for purpose of computation of income
         (ii)      Similarly, taxpayer is also to disclose              from life insurance business requiring details
                   “type of company” as an additional                   of net profit/loss from life insurance business
                   requirement while reporting the                      and additions/deductions made. Similar
                   disclosure of unlisted equity shares of              changes have also been made in other
                   any company held by the taxpayer                     schedules, such as separate disclosure of
                   during the year6 (ITR 2, 3, 5 and 7)                 losses to be carried forward from life
                                                                        insurance business is provided under Schedule
1.3.     Separate Schedule (Schedule 112A) for                          CFL.
         computation of capital gains arising on from
         sale of equity share in a company or unit of          1.7.     Expansion of depreciation schedule (ITR 3, 5
         equity oriented fund or unit of a business trust               and 6): Depreciation schedule is enlarged to
         on which Securities Transaction Tax (STT) is                   include separate block of assets7 which is
         paid (ITR 2, 3, 5 and 6): In case where the                    eligible for claiming deprecation at the rate of
         taxpayer has earned long term capital gains                    45%.
         from sale of equity share in a company or unit of
         an equity oriented fund/business trust on which       1.8.     Separate reporting of income from units of a
         STT is paid, the new ITR form requires asset-                  mutual fund purchased in foreign currency by
         wise detailed disclosure requirement which                     Offshore fund (ITR 5 and 6): Previously, there
         includes:                                                      was no separate reporting of the income from
                                                                        units of mutual fund purchased in foreign
         (i)       ISIN Code of security;                               currency by an offshore fund, which is taxable
         (ii)      Name of the share/unit;                              at special rate of 10%. Now, the ITR Forms
         (iii)     Number of share/unit;                                require a separate reporting of such income in
         (iv)      Sale price of share/unit;                            Schedule OS (Income from other sources).

                                                               2.       Key changes which are consequential to
         Further, the earlier details such as full value of             amendments made in the provisions of ITL:
         consideration, cost of acquisition, fair market
         value of the asset, expenditure wholly and            2.1.     Extension of time limit for claiming deduction
         exclusively incurred in connect with transfer,                 under Chapter VI-A of the ITL or investments
         etc. are now also to be reported asset-wise.                   for claiming exemption from capital gains
                                                                        (ITR 1, 2, 3, 4, 5 and 6): Due to explosion of
         Similarly, a separate schedule is introduced for               COVID-19 pandemic, the President has
         taxpayers being non-resident earning the said                  promulgated Taxation and Other Laws
         income for reporting the aforesaid details.                    (Relaxation of Certain Provisions) Ordinance
                                                                        20208 on 31 March 2020 to grant various
1.4.     Disclosure of Document Identification Number                   procedural relaxation for compliances under
         (DIN) (ITR 1 to 7): Pursuant to CBDT Circular                  various laws including ITL. It includes
         No. 19 of 2019 dated 14 August 2019 which                      extension of last date of carrying out requisite
         provides that no communication shall be issued                 investments/deposits/payments to claim
         by Tax Department relating to assessment,                      various benefits under ITL for tax year 2019-
         appeals, orders, etc. on or after 1 October                    20 from 31 March 2020 to 30 June 2020.
         2019, unless electronically generated DIN is                   Also, the time period for commencement of
         allotted and duly quoted on such                               business activity for claiming Special Economic
         communication, ITR forms require disclosure of                 Zone (SEZ) exemption which was to be time
         such DIN if tax return is furnished pursuant to                barred on 31 March 2020 was extended to 30
         any notice issued by the Tax Authority.                        June 2020. Pursuant to the said relief, now
                                                                        separate schedule is introduced to furnish
1.5.     Disallowance of amount paid to a member (ITR                   details of investments/deposits/payments
         3 and 6): Any payment of interest, salary,                     made on or after 1 April 2020 to 30 June
         bonus, commission or remuneration, by any                      2020 with respect to the deductions to be
         association of persons or body of individuals to               claimed under Chapter VI-A of ITL and with
         a member of such association or body which is                  respect to amount utilized from the Capital

5
  Since, currently the contents of the dropdown list are not   August 2019 but before 1 April 2020 and is put to use
known, greater clarity shall prevail once the same are made    before 1 April 2020. Refer CBDT Notification No. 69/ 2019
available in the instructions to ITR forms.                    dated 20 September 2019.
6                                                              8
  Since, currently the contents of the dropdown list are not     Refer our alert tiled as “COVID 19 Impact - Government
known, greater clarity shall prevail once the same are made    extends various timelines up to 30 June 2020 and provides
available.                                                     relaxations under various direct tax laws in India” dated 1
7
  Motor buses, motor lorries and motor taxis used in a         April 2020
business of running them on hire acquired on or after 23
Gains Account Scheme which are to be claimed               being treated as an advance. ITR form
       as deduction for tax year 2019-20.                         provides that if the taxpayer is availing such
                                                                  option, then requisite details in Schedule TPSA
2.2.   Amendment in conditions for carrying on tax                which includes amount of primary adjustment,
       audit (ITR 3, 5 and 6): Erstwhile provisions               computation of tax including surcharge and
       governing requirement to carry out tax audit               cess and details of payment of such taxes are
       provided that if the total sales/turnover/gross            required to be reported.
       receipts exceeded INR10M in a tax year for a
       person carrying on business, then such person is    2.5.   Change in taxation in the hands of unit holder
       required to undertake tax audit. This, threshold           (ITR 2, 3, 5, 6 and 7): Erstwhile provisions of
       was enhanced to INR 50M if following two                   the ITL provided that where the net
       conditions are met:                                        computation of income of an investment fund
                                                                  was a loss, such loss have to captured at the
       (i)     Aggregate of all amounts received,                 level of the investment fund only and the same
               including from sales/turnover/gross                cannot be passed on to the unitholders of the
               receipts, in cash, does not exceed 5% of           investment fund. However, such treatment
               the said amount; and                               has undergone a change vide Finance Act
                                                                  2020 as under:
       (ii)    Aggregate of all payments made,
               including amount incurred for                      (i)      For losses accumulated with the
               expenditure, in cash, does not exceed                       investment fund as on 31 March
               5% of said amount.                                          2019, with respect to income other
                                                                           than income from business and
       In consequence of the above amendment, ITR                          profession shall be considered as loss
       form provides for three new disclosure                              of the unitholders and shall be
       requirements, being:                                                allowed to be carried forward by such
                                                                           unitholders;
       (i)     Whether total sales/turnover/gross
               receipts of business exceeds INR 10M               (ii)     For losses arising from tax year
               but does not exceed INR 50M; and                            2019-20, with respect to losses other
                                                                           than arising under the head of income
       (iii)   Whether aggregate of all amounts                            from business and profession, such
               received, including from                                    losses shall be passed on to the
               sales/turnover/gross receipts or on                         unitholders meeting stipulated
               capital account such as capital                             conditions.
               contribution, loans, etc., in cash, does
               not exceed 5% of the said amount; and              In pursuance of the above amendment, the
                                                                  following consequent changes have been
       (iv)    Whether aggregate of all payments                  made in the ITR Forms:
               made, including amount incurred for
               expenditure or on capital account such             (iii)    Reference to pass through of “losses”
               as asset acquisition, repayment of                          alongside pass through of income
               loans, etc., in cash, does not exceed 5%                    have been added;
               of said amount.
                                                                  (iv)     Schedule PTI which provides for
2.3.   Payment based deduction (ITR 3, 5 and 6): As                        details of pass through income from
       part of amounts debited to the Statement of                         business trust/investment fund will
       Profit and Loss but not allowed as per s. 43B of                    require furnishing of additional
       the ITL requires additional disclosure                              disclosures, being current year
       requirement of interest payable to a deposit                        income, share of current year loss
       taking Non-banking financial company (NBFC) or                      distributed by investment fund, etc.
       systematically important non-deposit taking
       NBFC.                                                      (v)      Schedule CFL which provides for
                                                                           details of losses to be carried forward
2.4.   Reporting requirement in relation to secondary                      to future years, will now require a
       adjustment (ITR 3, 5 and 6): As per provisions                      separate bifurcation with respect to
       of ITL, where a primary adjustment is carried                       house property loss, short term
       out with respect to an international transaction                    capital loss and longterm capital loss,
       with an Associated Enterprise (AE), a secondary                     into normal losses and losses made
       adjustment is also required to be carried out in                    available due to pass through from
       the books of the taxpayer. Further, if the                          investment fund.
       adjusted amount is not received from the
       respective AE in stipulated time, it is deemed to          Apart from the above, with respect to long
       be treated as advance provided by the taxpayer             term capital gains earned by taxpayers by
       to AE and interest is charged thereof. However,            virtue of pass through taxation, bifurcation is
       an option is provided to taxpayer in such cases            required to be provided between the gains
       to pay an additional income tax on the adjusted            taxable under s. 112A @ 10%, other than s.
       amount and prevent the adjusted amount from                112A @ 10% and taxable @ 20% for other
cases. (ITR 2, 3, 5 and 6)                          3.3.   As part of disclosure of income chargeable to
                                                                  tax at special rates i.e. Schedule OS (Income
2.6.   Option to disclosure Aadhaar number in lieu of             from other sources) and Schedule SI (special
       PAN (ITR 1 to 7): Finance Act 2020 has                     rates), a new line item added, being tax on
       introduced a specific provision in the ITL for             dividend received by an Indian company from
       interchangeable use of Aadhaar number and                  specified foreign company i.e. a company in
       PAN if such Aadhaar number is linked with PAN              which the Indian company holds 26% or more
       following the prescribed procedure. ITR Forms              of equity, chargeable to tax @ 15% plus
       are amended to provide an option to taxpayer to            surcharge and cess as applicable.
       furnish Aadhaar number wherever there is
       requirement to quote PAN such as in case of         3.4.   Any capital gain or loss arising from the sale of
       property being co-owned the taxpayer can now               land or building or both is required to be
       either provide PAN or Aadhaar number of the                reported by taxpayer in Schedule CG of ITR
       co-owner.                                                  form. In the new ITR-6, a company is now
                                                                  required to report its share in land or building
2.7.   Option of “self-occupied” property introduced              in case of co-ownership.
       (ITR 5 and 6): While furnishing the details of
       income from house property in Schedule HP,          3.5.   As per the First Schedule of the Finance Act, a
       earlier only two options of let out and deemed to          foreign company is liable to pay tax at the rate
       be let out were provided in ITR 5 and ITR 6.               of 50% in respect of the following incomes:
       However, considering that the provisions are
       amended to provide that where the property                 (i)      royalties received from Government
       consisting of any building or land appurtenant                      of India (GoI) or an Indian concern in
       thereto is held as stock-in-trade and the                           pursuance of an agreement made by
       property or any part of the property is not let                     it with the GoI or the Indian concern
       out during the whole or any part of the previous                    after the 31 March 1961 but before
       year, the annual value of such property, for                        the 1 April 1976; or
       period up to two years from the end of the
       financial year in which the certificate of                 (ii)     fees for rendering technical services
       completion of construction of the property is                       received from GoI or an Indian
       obtained from the competent authority, shall be                     concern in pursuance of an
       taken to be NIL, thus now the ITR forms allow                       agreement made by it with the GoI or
       selection of self-occupied property option and                      the Indian concern after the 29
       claim annual value as NIL.                                          February 1964 but before 1 April
                                                                           1976, and where such agreement
3.     Key changes in ITR 6 – Applicable to corporate                      has, in either case, been approved by
       taxpayers:                                                          the Central Government.

3.1.   The Taxation Laws (Amendment) Act 2019                     In notified ITR-6, if a foreign company has
       provided for concessional tax regimes for                  earned such incomes, then it has to separately
       various specified domestic companies, wherein              report them in the Schedule OS (Income from
       the corporate tax rate stood reduced to                    other sources). Consequential change has also
       22%/15% for companies which met stipulated                 been made to Schedule SI (Special Income)
       conditions and also agreed to give away certain            which provides taxation at special rate. It may
       allowances. These provisions are introduced as             be noted that such provisions already formed
       optional provisions, wherein the company can               part of the ITL, however a separate disclosure
       decide to whether opt-in for it or not. In lines           is now required in the ITR Form for the sake of
       with the same, the ITR Form in Part-A of General           clarity.
       Schedule, requires the company to choose
       whether it is opting for any of the concessional    3.6.   Previously, the return of a company could be
       tax regimes.                                               signed and verified by its Managing Director
                                                                  (MD) or in his/her absence, by any other
3.2.   In case of companies covered by presumptive                director of the company. However, Finance
       taxation regime and do not maintain books of               Act 2020 amended the relevant provision to
       account, have to report certain specified items            enable “any other person, as may be
       of assets and liabilities as also gross receipts           prescribed by the Board”, to verify the return
       and expenses in lieu of reporting of detailed              of income of a company. In pursuance to such
       items of balance sheet and profits and loss                amendment, the ITR – 6 requires details of the
       account. Such reporting was applicable to                  eligible person verifying the return in the
       companies following Indian Accounting                      schedule of ‘Key Persons’, such as name,
       Standards (Ind AS). Considering that Ind AS                designation, address, PAN/Aadhaar Number
       companies are generally required to maintain               and director identification number, if he/she is
       books of account, requirement of reporting only            a director.
       specified items of balance sheet and profit and
       loss account under Schedule Part A-BS– Ind AS
       and Schedule Part A-P&L Ind-AS stand deleted.
4.          Key changes in ITR – 1 Sahaj – applicable to                (iii)   Taxpayer was required to provide the
            specified small taxpayers and ITR – 4 Sugam –                       movement of all transactions
            applicable to taxpayers offering income on                          undertaken through bank channel
            presumptive basis:                                                  (aggregate of all bank accounts) viz.
                                                                                details of opening balance, receipts
4.1.        Few additional reporting requirements                               during the tax year, payments/
            imposed through the January Notification                            withdrawals during the tax year and
            stands omitted: Following additional disclosure                     closing balance. Similar summary was
            requirements which were notified in the Form                        also to be provided for all
            ITR-1 Sahaj and ITR -4 Sugam through the                            transactions undertaken in cash
            January Notification now stand omitted by the                       during the tax year.
            present Notification:
                                                                                In lieu thereof, the earlier disclosure
            (i)       A taxpayer owning a single house                          requirement to provide exhaustive
                      property was required to provide                          details of financial information such
                      complete address of such house                            as details of capital balances, secured
                      property. Also, if the said property was                  and unsecured loans, creditors, fixed
                      let out at any time during the tax year,                  assets, inventories, cash and bank
                      details such as Name and PAN/Aadhaar                      balance, etc. stand restored as per
                      number of the tenant (if available) was                   present Notification.
                      to be provided.
                                                                 6.     Key changes in ITR – 7 – Applicable to
            (ii)      Under the house property schedule, the            specified taxpayers such as charitable trust,
                      taxpayer was required to separately               political parties, etc.:
                      disclose the amount of unrealized rent
                      along with amount of gross rent,           6.1.   While providing details of registration, the
                      though, unrealized rent is subsequently           taxpayer is required to specify whether
                      excluded from gross rent in the                   application for registration is made as per new
                      computation of taxable rent income.               provisions, provision under which registration
                                                                        is applied, date on which the application for
            (iii)     Salaried taxpayer was required to                 registration as per new provisions is made and
                      provide various details of employer               specific provision of exemption opted for
                      such as name, address and Tax                     under the new provisions9.
                      Deduction and Collection Account
                      Number (TAN) of the employer.

            (iv)      Requirement to furnish details of Indian
                      passport

5.          Key changes in ITR – 4 Sugam – Applicable to
            taxpayers offering income on presumptive
            basis:

5.1.        Few additional reporting requirements
            imposed through the January Notification
            stands omitted: The following additional
            disclosure requirements which were notified in
            the Form ITR - 4 by the January Notification,
            now stand omitted by the current Notification:

            (i)       A taxpayer, being a partner in a
                      partnership firm was required to
                      disclose the name and PAN of such
                      partnership firms.

            (ii)      Taxpayer, being a partnership firm, was
                      required to provide details of all the
                      partners which include name, address,
                      PAN and Aadhaar number (if eligible
                      for Aadhaar) of the partner,
                      percentage of share in the partnership
                      firm, rate of interest on partner’s
                      capital and remuneration paid or
                      payable.

9
    Exact scope of this reporting requirement is not clear
Comments
The new ITR Forms majorly cover modifications
which are consequential to the various amendments
made in the provisions of ITL.

While notifying new ITR forms for tax year 2019-20,
CBDT has not expanded the reporting requirement
to a great extent. This is a welcome move by CBDT.
However, in case of sale of specified securities, the
reporting requirement of different parameters such
as sale consideration, cost of acquisition,
substitution of fair market value, etc. is made
security-wise as against earlier reporting on
consolidated basis.

Considering that there is no major additional
reporting obligation imposed on the taxpayer, it will
provide ease to the taxpayers for furnishing the tax
returns for tax year 2019-20 in the present
unprecedented times of major disruption due to
COVID-19 pandemic.

Corporate taxpayers may like to note that the option
for exercising reduced corporate tax rates pursuant
the Taxation Laws (Amendment) Act 2019 is
required to be specified upfront in the ITR Forms.
Therefore, due caution should be exercised while
opting for the same.

The present Notification is effective from the date of
its publication in Official Gazette (i.e. 29 May 2020).
However, two ITR Forms (ITR 1 Sahaj and ITR 4
Sugam) were notified well in advance in January
2020, with effective date being 1 April 2020. Issue
may arise in rare case of the taxpayers who have
already furnished such tax returns in the month of
April 2020 and May 2020, whether such taxpayers
are required to revise their tax returns to be
consistent with new ITR forms. This may require
clarification from CBDT.
Annexure 1

Applicability of ITR forms to various category of taxpayers

 Form        Category of taxpayers                 Applicability/ sources of income covered

 ITR-1       Individuals (resident and             Who can file ITR-1
 (Sahaj)     ordinarily resident)
                                                    •   Has income from salaries or family pension, or
                                                    •   Income from one house property, or
                                                    •   Income from other sources

                                                   Who cannot file ITR-1

                                                    •   Who has an asset or signing authority in any account
                                                        outside India or earns income from any source outside
                                                        India, or
                                                    •   Who has claimed Double Taxation Avoidance
                                                        Agreement (DTAA) relief and/or unilateral double tax
                                                        relief, or
                                                    •   Has agricultural income above INR5,000, or
                                                    •   Has total income above INR5M, or
                                                    •   Has dividend income exceeding INR1M attracting super
                                                        rich dividend tax levy, or
                                                    •   Has unexplained credits or investment taxable at 60%
                                                        under the provisions of the ITL, or
                                                    •   Has capital gains or business income, or
                                                    •   Income from more than one house property or has
                                                        brought forward loss or loss to be carried forward
                                                        under the house property head, or
                                                    •   Income from lotteries or horse races or loss under the
                                                        other sources head
                                                    •   Who has claimed deduction of expenses under income
                                                        from other sources head. However, person who has
                                                        claimed deduction under other sources head against
                                                        family pension income can file ITR-1.
                                                    •   Who is director in any company
                                                    •   Who held any unlisted equity share at any time during
                                                        the tax year
                                                    •   Who is assessable for income on which tax has been
                                                        deducted in another taxpayer’s name

 ITR-2       Individuals and Hindu Undivided
             Family (HUFs)                          •   Has income from salaries, or
                                                    •   Income from house property, or
                                                    •   Capital gains, or
                                                    •   Income from other sources

 ITR-3       Individuals and HUFs
                                                    •   Has income from business or profession

 ITR-4       Individuals and HUFs who are          When to file ITR-4 Sugam
 Sugam       resident and ordinarily resident,
             firms (other than limited liability    •   In case of profits and gains from business and
             partnerships (LLPs)) which are             professions to which presumptive tax provisions apply
             resident                                   (except in following cases)

                                                    Who cannot file ITR-4 Sugam

                                                    •   Who has an asset or signing authority in any account
                                                        outside India or has income from any source outside
                                                        India, or
                                                    •   Who is a director in any company
                                                    •   Who held any unlisted equity share at any time during
                                                        the tax year
Form    Category of taxpayers                 Applicability/ sources of income covered
                                               • Has total income above INR5M, or
                                               • Income from more than one house property or
                                               • Has brought forward loss or loss to be carried forward
                                                   under any head of income, or
                                               • Who is assessable for income on which tax has been
                                                   deducted in another taxpayer’s name
                                               • Who has claimed DTAA relief and/or unilateral double
                                                   tax relief, or
                                               • Has agricultural income above INR 5,000 or
                                               • Has dividend income exceeding INR1M attracting super
                                                   rich dividend tax levy, or
                                               • Has unexplained credits or investment taxable at 60%
                                                   under the provisions of the ITL

ITR-5   For firms/ LLPs/Association of
        Persons (AOPs)/ business trusts        •   Income from house property
                                               •   Capital gains
                                               •   Profits and gains from business and profession
                                               •   Income from other sources

ITR-6   Companies other than those filing
        ITR-7                                  •   Income from house property
                                               •   Capital gains
                                               •   Profits and gains from business and profession
                                               •   Income from other sources

ITR-7   Persons to furnish return of
        income in circumstances                •   Income from house property
        specifically provided for under        •   Capital gains
        the ITL viz., charitable trusts and    •   Profits and gains from business and profession
        other institutions, political          •   Income from other sources
        parties, etc.
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