High spenders can file income tax returns for AY 21 in Sahaj

Our Bureau  New Delhi | Updated on January 09, 2020  Published onJanuary 09, 2020

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Person jointly owning a single house property can file ITR-1, ITR-4

High spenders will now be able to file Income Tax Return (ITR) for Assessment Year 2020-21 (Financial Year 2019-20) through the Sahaj (ITR-1) form.

High spenders are those who have deposited ₹1 crore or more in the current account or spent ₹2 lakh or more on foreign travel or incurred expenses of ₹1 lakh or more on electricity.

Within days after notifying new returns forms, the Income-Tax Department on Thursday relaxed the norms for using Sahaj (ITR-1) and Sugam (ITR-4). ITR-1 is mainly for salaried individuals, ITR-4 is for individuals with business income and also for Hindu Undivided Family (HUF) and partnership firms. One can start filing returns from April 1, and the last date is normally July 31. It has also been decided to allow a person, who jointly owns a single house property, to file his/her return of income in ITR-1 or ITR-4 Form, as may be applicable, if he/she meets the other conditions.

Surprising everyone, the Tax Department notified the two return forms on January 3. In the notified returns, the eligibility conditions for filing of ITR-1 and ITR-4 Forms were modified with the intention of keeping these forms short and simple with a minimum number of Schedules.

Therefore, a person who owns a property in joint ownership was not made eligible to file the ITR-1 or ITR-4 Forms.

For the same reason, a person who is otherwise not required to file return but is required to file return due to fulfilment of one or more conditions in the seventh proviso to section 139(1) of the Income-tax Act, 1961 (the Act), was also not made eligible to file ITR-1 Form.

The Seventh proviso includes conditions such as deposit of an amount or aggregate of the amounts exceeding ₹1 crore in one or more current accounts maintained with a banking company or a co-operative bank; or expenditure of an amount or aggregate of the amounts exceeding ₹2 lakh by an individual for himself or any other person for travel to a foreign country; or expenditure of an amount or aggregate of the amounts exceeding ₹1 lakh towards electricity charges.

With this notification, there was concern that the changes are likely to cause hardship for individual taxpayers.

The taxpayers with jointly owned property were worried that they will now need to file a detailed ITR Form instead of a simple ITR-1 and ITR-4.

Similarly, persons who are required to file return as per the seventh proviso to section 139(1) of the Act, and are otherwise eligible to file ITR-1, have also expressed concern that they will not be able to opt for a simpler ITR-1 Form. The Income Tax Department said it decided to relax the norms after detail examination of the issues.