Six days after it mandated filing of detailed income tax returns instead of simple ITR-1 and ITR-4 returns for joint ownership of property and high value transactions for electricity bill payment and foreign travel, the Income Tax Department reversed its decision on Thursday.
In a release, the Department said “concerns have been raised that the changes are likely to cause hardship in the case of individual taxpayers” and hence, it has 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 return. Similarly, for the requirement to file high-value expenses can now be specified in ITR-1 return.
On January 3, notifying two income tax returns — Sahaj (ITR-1) or Sugam (ITR-4) — for assessment year 2020-21, the I-T Department made two major changes: first, an individual taxpayer cannot file return either in ITR-1 or ITR-4 if he/she is a joint-owner in house property; second, ITR-1 form was made invalid for those individuals who have deposited over Rs 1 crore in bank account or incurred Rs 2 lakh or Rs 1 lakh on foreign travel or electricity, respectively.
ITR-1 is the income tax return for individual taxpayers having total income upto Rs 50 lakh and includes mainly salaried taxpayers, while ITR-4 is filed by individuals having business income, HUFs and firms (other than LLPs) having a total income of up to Rs 50 lakh from business and profession and filing return under presumptive taxation scheme.
The Central Board of Direct Taxes (CBDT), in its release, said that in order to ensure that the e-filing utility for filing returns for AY 2020-21 from April 1, ITR-1 and ITR-4 were notified and the eligibility conditions were “modified with an intent to keep these forms short and simple with bare minimum number of schedules”. Usually, the I-T Department notifies the ITR forms in the first week of April of the relevant assessment year. However, this year, it has notified two ITR forms ITR-1 and ITR-4 for AY2020-21 in the first week of January. The Department is yet to issue a new notification amending the previous notification.