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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
Slab (Rs.) Tax Rate (%)
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
Slab (Rs.) Tax Rate (%)
Up to 5,00,000 NIL
5,00,001 to 5,00,000 20
Above 10,00,000 303
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
‘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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
General Amendments from Finance Act 2018
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
Applicability of ITR Forms
• 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
Applicability of ITR Forms
• 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
Particulars Change in Return Impact in ITR
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
Particulars Change in Return Impact in ITR
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
Particulars Change in Return Impact in ITR
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
Particulars Change in Return Impact in ITR
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
Particulars Change in Return Impact in ITR
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
Particulars Amendment Impact of amendment
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
Changes in Finance Act, 2018- Income from Capital
Gains
Particulars Amendment Impact of amendment
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
Changes in Finance Act, 2018- Income from Capital
Gains
Particulars Amendment Impact of amendment
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
Changes in Finance Act, 2018- Income from Capital
Gains
Particulars Amendment Impact of amendment
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
Changes in Finance Act, 2018- Income from Capital
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
Changes in Finance Act, 2018- Income from Capital
Gains
35
Changes in Finance Act, 2018- Income from Capital
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
Changes in Finance Act,2018-
Income from Capital Gains
38
Changes in Finance Act,2018-
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
Changes in Finance Act, 2018- Income from Capital
Gains
Particulars Amendment Impact of amendment
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
Changes in Finance Act, 2018- Income from Capital
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
Changes in Finance Act, 2018- Income from Capital
Gains
Particulars Amendment Impact in ITR
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
Particulars Amendment Impact in ITR
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
Particulars Amendment Impact of
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
Changes in Finance Act,2018-Business/Profession
Income
Particulars Amendment Impact of amendment
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
Particulars Amendment Impact of
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
Changes in Finance Act,2018-Business/Profession
Income
Particulars Amendment Impact of amendment
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
Particulars Changes in ITR Impact in ITR
- 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.
Changes in ITR Form -Business or Profession Income
51
Particulars Changes in ITR Impact in ITR
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
Changes in ITR Form -Business or Profession Income
52
Particulars Changes in ITR Impact in ITR
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
Changes in ITR Form -Business or Profession Income
53
Particulars Changes in ITR Impact in ITR
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.
Changes in ITR Form -Business or Profession Income
54
Particulars Changes in ITR Impact in ITR
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
Changes in ITR Form -Business or Profession Income
55
Particulars Changes in ITR Impact in ITR
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
Changes in ITR Form -Business or Profession Income
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
Changes in ITR Form -Business or Profession Income
57
Particulars Changes in ITR Impact in
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….
Changes in ITR Form -Business or Profession Income
58
Particulars Changes in ITR Impact in ITR
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
Particulars Amendment Impact of
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
Particulars Amendment Impact of
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
Particulars Changes in ITR Impact in ITR
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
Particulars Changes in ITR Impact in
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
Particulars Changes in ITR Impact in ITR
• 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
Changes in ITR-Income from Other Sources
64
Particulars Changes in ITR Impact in ITR
- Measurement of agricultural land
in Acres.
- Whether land is owned/held on
lease
- Whether land is irritated/rain-
fed.
Changes in ITR-Income from Other Sources
65
Particulars Amendment Impact of
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
Particulars Changes in ITR Impact in ITR
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
Particulars Changes in ITR Impact in ITR
• 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
Particulars Changes in ITR Impact in
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
Changes in ITR Form - Trust
69
Particulars Changes in ITR Impact in ITR
• 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
Changes in ITR Form - Trust
70
Particulars Changes in ITR Impact in ITR
- 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
Changes in ITR Form - Trust
71
Particulars Changes in ITR Impact in ITR
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.
Changes in ITR Form - Trust
72
Particulars Changes in ITR Impact in
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
Changes in ITR Form - Trust
73
Particulars Changes in ITR Impact in
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
Changes in ITR Form - Trust
74
Particulars Changes in ITR Impact in
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
Changes in ITR Form - Trust
75
Particulars Changes in ITR Impact in
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
Changes in ITR Form - Trust
76
Particulars Changes in ITR Impact in
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
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
78
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
79
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
80
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
81
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
82
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
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
Changes in ITR Form – Static Information & Schedules
84
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
85
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
86
Particulars Changes in ITR Impact in
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
Changes in ITR Form – Static Information & Schedules
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.
Changes in ITR Form – Static Information & Schedules
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
Thank You!!!!
CA Divya Jokhakar
Partner
B.D. Jokhakar & Co.
Chartered Accountants
CA Hardik Mehta
Partner
M.B. Nayak & Co
Chartered Accountants
91