Eye on Agricultural Income & investment in Unlisted companies through new ITR forms


Eye on Agricultural Income & investment in Unlisted companies through new ITR forms

 This [i.e., preparing my tax return] is too difficult for a mathematician. It takes a philosopher. — Albert Einstein

Income Tax Return (ITR) forms not only seeks information of the taxpayers as to income and tax but also seeks various other information and data. With an objective to control tax evasion & widening the tax base, new income tax return forms are notified every year with additional reporting requirements. It is expected that an automated scrutiny system will be enforced for data analysis & comparison of the same with other agencies. It’s time to know the correct return forms and the changes therein:

ITR Forms Applicable to
1 This is the simplest form of Income Tax return which for Resident Individual/HUF having income only from salary, One House Property, income under the head “Income from other source” can file the return in ITR-1 provided that

1.      Total income doesn’t exceed Rs. 50 Lakh.

2.      Such person is not a director or shareholder in an unlisted company

3.       Agricultural income don’t exceed Rs. 5,000/-

4.      Dividend income does not exceed Rs. 10 Lakh

5.      No income is taxable u/s 115BBE

6.  Such person have signing authority or assets located outside India

7.      No relief u/s 90 or 90A.

2 Individual/HUF having no business/professional income.
3 Individual/HUF having business & professional income.
4 Individual/HUF having business & professional income and opting for presumptive scheme of taxation U/s 44AD, 44ADA or 44AE. This form cannot be used if individuals is a director in a company or has invested in equity shares of unlisted company.
5 Firm, LLP, AOP, BOI, artificial juridical person, cooperative society or local authority. (A person who is required to file return in ITR 7 shall not use this form).
6 Company, other than a company claiming exemption u/s 11
7 Persons (including companies) who are required to furnish return u/s 139(4A), 139(4B), 139(4C) or 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.)

Here is a compilation of few of the changes in current ITR forms vis-a-vis last year’s ITR forms:

  1. Person having agricultural income is now required to furnish additional details for each agricultural land like location, area, owned or leased, irrigated or rain-fed and etc if agricultural income exceeds Rs. 5 Lakh.
  2. In ITR-2 & 3, Individual is required to mention the name of the company alongwith PAN where he is a director. Further, ITR 2, 3, 5 & 7 also requires such person to mention the details of holding of equity shares in unlisted companies at any time during the previous year.  In ITR-6, unlisted companies are required to furnish additional schedule SH-1 (Shareholders name, PAN, Application money received, Shares allotment details) & AL-1 (Assets & Liabilities details).
  3. Suitable column has been added in ITR forms for Standard Deduction as salaried individuals are eligible for it up to Rs. 40,000/-.
  4. If taxpayer have income from house property then the quoting of (a) PAN of the tenant is mandatory if tax is deducted u/s 194-IB. (b) TAN is mandatory if tax is deducted u/s 194I.
  5. Additional detail is required to be furnished in ITR 2 & 3 about the residential status of the individuals.
  6. Part A- P & L A/c is now divided as Part A- Manufacturing A/c, Part A- Trading A/c and Part A- P & L A/c.
  7. Information regarding Turnover/ Gross Receipts as reported for GST is now need to be incorporated in ITR – 3 & ITR – 6.
  8. The date of commencement of business is required to be reported in ITR – 6 applicable to companies.
  9. Start-up companies are required to furnish additional details like date of recognition with DPIT, Form 2 details, etc.
  10. New forms require enhanced reporting regarding foreign assets and income from any source outside the country. Details such as foreign depository accounts and foreign custodial accounts need to be included now.
  11. ITR 1 now requires details of income from other sources this year. In earlier year, merely reporting of aggregate income from other source was required.
  12. Bifurcation between donation in cash and in other mode is required in the ITR form for claiming deduction u/s 80G.