Know the change in eligibility standards of newly notified ITR1, ITR 4

NEW DELHI: The Income Tax Department notified tax varieties ITR 1 to ITR 7 for the evaluation yr FY22 on Thursday. Given the pandemic, the tax division has not launched vital modifications. But there are nonetheless just a few modifications within the new ITR1 and ITR 4 varieties that it is best to know.

The tax division has added two extra situations as per which some taxpayers is not going to be eligible for submitting these varieties.

Also Read | Why Kerala could not swing this time spherical

An individual whose tax has been deferred in respect of ESOPs allotted by an eligible startup can’t file Form ITR-1 or ITR-4. Now, the worker needn’t pay tax on exercising the choice of changing ESOPs into shares.

Also, these whose TDS had been deducted underneath the Section 194N of the Income Tax Act, can’t file ITR 1 and ITR 4.

“For the FY 2020-21, return in Form ITR-1 can’t be filed by a taxpayer whose tax has been deducted underneath Section 194N. TDS is required to be deducted underneath Section 194N by banks, co-operative banks or a post-office from any sum paid in money from a number of accounts maintained by the recipient. Tax is deducted on the price of two% or 5% relying on the quantity withdrawn and the truth that the taxpayer has filed earnings tax return prior to now 3 years or not,” stated Tarun Kumar, a Delhi-based chartered accountant.

There is one other set of taxpayers who gained’t be capable of use these two varieties.

“As per modification in Budget 2020, from the FY 2020-21, an worker receiving ESOPs from an eligible start-up needn’t pay tax within the yr of exercising the choice. The TDS on the ‘perquisite’ stands deferred to earlier of the occasions that’s expiry of 5 years from the yr of allotment of ESOPs or date of sale of the ESOPs by the worker or date of termination of employment. Such workers will be unable to file ITR-1 and ITR 4, they should file ITR-2. ITR-2 and ITR-3 are extra detailed varieties,” stated Archit Gupta, founder and CEO, Cleartax.

ITR 1 and ITR4 are comparatively easy ITR varieties, as they require a taxpayer to fill out lesser particulars. Apart from these newly launched modifications there are specific different situations underneath which a taxpayer can’t file ITR 1 and ITR 4.

ITR 1 will be filed by an individual whose salaried earnings doesn’t exceed Rs50 lakh and has just one home property and agriculture earnings is beneath Rs5,000. ITR 4 will be filed by taxpayers who’ve opted for presumptive tax regime and their turnover doesn’t exceed ₹2crore.

(Do you’ve got a private finance question? Send in your queries at mintmoney@livemint.com and get them answered by trade specialists.)

Subscribe to Mint Newsletters * Enter a legitimate e-mail * Thank you for subscribing to our e-newsletter.