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Know All About the 15 Changes in New ITR Forms for AY 2021-22

Sep 22, 2021 Alankit

ITR basically stands for Income Tax Returns. The applicability of ITR is directly proportional to your income and the category under which your pay scale comes. Recently various new reforms have been introduced in the new ITR for the Financial Year 2021-22. Many new changes have been introduced even to the income tax filling form which one should be aware of while filing your ITR.

Following are 15 changes that one should be aware of while filing the form of income tax return.

1. CBDT has notified the new ITR forms applicable for AY 2021-22 vide Notification No. 21/2021, dated 31.03.2021

  • ITR 1: If your Salary/ One House Property/ Income from other sources and Total income is up to Rs. 50 Lakhs
  • ITR 2: if you have income from salary/ more than 1 House Property/ Capital Gains/Income from other sources more than 50 lakhs
  • ITR 3: If you have income from more than 1 House Property/ Profits and Gains from Business or Profession/ Capital Gains/ Income from Other Sources

2. ITR – 1 cannot be filed in case tax has been deducted under Section 194N:

Under Section 194N, it offers that every banking company, post-office, or a co-operative bank, which is responsible for payment of cash to a person, from one or more accounts maintained by him, is meant to deduct tax in case the amount of cash withdrawn during the year exceeds Rs. 20 lakhs. According to the rule of Income-tax amended to restrict an assessee, to whom section 194N applicable, from furnishing return of income in ITR–1. Consequential changes have been made to ITR-1.

3. No option to carried forward TDS deducted under section 194N:

According to the new amendment in the Income Tax Returns forms, the TDS deducted under Section 194N shall not be allowed to be carried forward to subsequent years. The subsequent amendment has been made from ITR-2 to ITR-7 to restrict the carry forward of TDS.

4. Taxability of dividend income from A.Y.2021-22: (ITR-1 to 7):

Dividend income is taxable in hands of recipient shareholders from A.Y.2021-22 and onwards and thus various provisions of the IT Act have been amended. The ITR forms have also been amended to incorporate all these changes.

5. Increase in threshold limit for Tax Audit: (ITR-3 & 6):

The threshold limit for the purpose of Tax audit has been increased from Rs.1 Crore to Rs.10 Crores by the Finance Act, 2021 (w.e.f A.Y 2021-22) and necessary changes have been brought in the ITR forms to enhance the limit.

6. Reporting of the amount deferred in respect of ESOPs:

According to the Finance Act, 2020, deferring the payment or deduction of tax on ESOPs allotted by an eligible start-up referred under Section 80-IAC has been allowed. As a result, the relevant rule has been amended. Equivalent changes have been made to ITR-1 and ITR-4.

7. Assessee is required to show the effect of marginal relief separately:

The form of Income Tax Returns for A.Y.2021-22 has been amended which entails the special disclosure of ‘surcharge computed before marginal relief’ and ‘surcharge computed after marginal relief’.

8. Exercise of option prescribed under section 115BAC OR 115BAD (ITR-1 to 5):

Changes have been made in ITR form From the A.Y.2021-22 option available to the individual, HUF, and to co-operative societies whether to opt for a special tax regime or not.

9. Introduction of New Section 80M:

In order to provide a deduction to a domestic company for the amount received as a dividend from another domestic company, Section 80M was introduced by the Finance Act 2020. ITR Form 6 for the assessment year 2021-22 has been accordingly modified.

10. Date of cash donation in case of deduction under Section 80GGA [ITR 2, 5 & 6]:

According to the new amendment for AY 2021-22, additional disclosure of the date on which cash donation has been made is now mandatory to be mentioned in the ITR forms.

11. New Form 16D has been introduced in Schedule of Tax Payments:

Now TDS Certificate under Section 194M shall be issued in Form No. 16D. ITR forms require details of tax deducted at source as per the certificate issued by the Deductor.

12. Nature of security to be furnished in Schedule 112A and Schedule 115AD:

Now TDS Certificate under Section 194M shall be issued in Form No. 16D. ITR forms require details of tax deducted at source as per the certificate issued by the Deductor.

13. Nature of business code to be mentioned:

The assesse requires furnishing various information related to income along with the amount of deductions as per the Schedule 80P of the ITR. ITR form for the assessment year 2021-22 has introduced one more column in Schedule 80P. This column requires the assesse to provide the nature of the business code for numerous types of income of such person

13. Nature of business code to be mentioned:

The assesse requires furnishing various information related to income along with the amount of deductions as per the Schedule 80P of the ITR. ITR form for the assessment year 2021-22 has introduced one more column in Schedule 80P. This column requires the assesse to provide the nature of the business code for numerous types of income of such person

14. STCG other than those covered under section 111A can’t be shown in Schedule:

Short-term capital gains other than those covered under section 111A cannot be disclosed in Schedule.

15. No bifurcation required for carried forward losses:

: ITR utilities issued by the department do not require any bifurcation of pass-through losses and normal losses. ITR forms notified for the assessment year 2021-2022 have removed such bifurcation, to bring the ITR forms in line with the ITR utilities issued by the department, and now a consolidated figure of such losses is to be disclosed.

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