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Vital Changes in ITR-1 and ITR-2 for FY 2018-19

The ITR forms have undergone some changes when compared to previous year ITR forms as notified by the government. These changes were made keeping in mind the changes made in income tax laws and Budget 2018 for FY 2018-19 and onwards. Here are nine changes in ITR forms 1 and 2 that you must aware while filing the income tax returns.

1. Mandatory filing of Income tax return online:

Previously, CBDT allowed two types of individuals to file their ITR in paper format. These individuals were super senior citizens whose age is 80 years or above and individuals having income below Rs 5 lakh with no refund. However, from FY 2018-19 only super senior citizens whose age is 80 years or above can now file ITR-1 or ITR-4 in paper form and others will have to file their ITR electronically.

2. Furnishing of full details of property to whom it was sold:

In case you have sold a property in current previous year, then while filing ITR-2 complete details of buyer needs to be disclosed by the person who sold the property. Buyer details have to be provided irrespective whether the capital gains accrued are of short-term or long-term in nature. The details of buyer will have to be given if TDS is deducted by your buyer while making payment. TDS has to be deducted mandatorily if the sale value exceeds Rs. 50 Lakhs. However quoting of PAN details is mandatory while filing ITR.

3. Disclosing of rental arrears has to be made property wise:

While filing ITR forms, if there are any rent arrears that are received by you in FY 2018-19 then property wise details of arrears received should disclosed in ITR forms as applicable. This change is applicable for individuals having received rent arrears form more than one house property in FY 2018-19.

4. Specifying the type of house property

An individual is liable to disclose the type of house property while the ITR form such as ‘self occupied’ , ‘Let-out’ or  ‘Deemed Let-out’. In previous year’s ITR form there was no such requirement.

5. Disclosure of shares held in unlisted companies

In case an individual holding shares in unlisted company, then the details of your holdings has to be disclosed in your ITR-2. Details such as name of the company, PAN of the company, cost of acquisition at the beginning of the year, number of shares, face value, issue price (or purchase price) and date of purchase of shares acquired during the year, number and sale consideration of shares transferred during the year, number and cost of acquisition of shares held at the end of the previous year.  It will also help the department to check whether income and net worth of a shareholder is in corroboration with the amount invested by him in an unlisted company. 

6. Reporting of salary details gets easier in ITR-1

This year providing details of your salary income will be easier as the details required are in sync with the information available in Form-16. In the last year, though taxpayers were required to provide the break-up of salary details, the information required was not in sync with information available in Form-16.

7. Complete disclosure of Interest Income

All taxpayers are required to provide detailed information of interest income earned or any other income earned by them, source of such income has to be disclosed while filing ITR-1 in current previous year.

8. Disclosure of Residential status

The new ITR-2 form asks individuals not only to specify the residential status as resident, resident but not ordinarily resident or non-resident, but also to provide additional information with respect to his residential status, such as number of days of stay in India, jurisdiction of his residence and tax identification number in case he is a non-resident.

9. Mentioning of DIN number

An individual being a director of company has to file ITR-2 OR 3 whichever is applicable has to disclose the DIN number in the form and has to provide information relating to name of company, PAN, whether shares are listed or unlisted.

10. Disclosure of salary components in ITR – 2:

Complete break-up of Gross salary/ Total Earnings should be disclosed while ITR-2. Salary components such as Basic salary, house rent allowance, leave travel allowance, gratuity etc. Each allowance, perquisite or any other benefit received should be filled in separately.