Key changes in ITR Forms for AY 2021-22 - Part 1: ITR 1 Sahaj and ITR 2

Form ITR 1 Sahaj

Who is eligible to use ITR 1 Sahaj?

This Return Form is to be used by an individual who is a resident other than not ordinarily resident, whose total income for the Assessment Year 2021‐22 does not exceed Rs. 50 lakh and who has income under the following heads:‐

• Income from Salary/ Pension; or
• Income from One House Property; or
• Interest income and/ or family pension taxable under Other Sources.

Key changes in Form ITR-1 Sahaj

(a) Option to avail benefit of new tax regime u/s 115BAC is provided in ITR-1. Option should be availed within the due date mentioned as per section 139(1).

(b) ITR 1 cannot be filed by the assessee who is having TDS u/s 194N.

(c) Resident Individual having Income-Tax deferred on ESOP is restricted to file ITR-1

(d) Quarterly breakup of dividend income to be provided.

(e) Schedule DI is removed.

(f) Date of Donation made in cash has inserted to calculate eligible amount of donation u/s 80GGA

Form ITR 2

Who is eligible to use Form ITR 2?

This Return Form is to be used by an individual or a Hindu Undivided Family (HUF) who is not eligible to file Form ITR‐1 (Sahaj) and who is not having any income under the head "Profits or gains of business or profession"

Key Changes in Form ITR-2

(a) Option to avail benefit u/s 115BAC is provided in ITRs

(b) Assessees opting under 115BAC are not eligible for certain deductions and allowances as mentioned below :

1. Loss under the head House Property is not allowed to be set off
2. Certain allowances u/s section 10 (LTA, HRA, allowances granted to meet expenses in performance of duties of office,
3. Allowances granted to meet personal expenses in performance of duties of office, Allowance received by MP/MLA/MLC)
4. Deductions u/s 16 (Standard Deduction ,Entertainment allowance and Professional tax)
5. Interest payable on borrowed capital for self‐occupied property
6. Standard Deduction in case of family pension
7. Chapter VIA Deduction (life insurance, health insurance premium, pension funds, provident fund, donation etc except Contribution made by employer to notified pension scheme u/s 80CCD(2))

(c) Option of Filing ITR in response to notice u/s 153A and 153C is removed from ITR as the requirement to file ITR under these sections is omitted.

(d) In Schedule CG, the allowable difference between the full value of consideration u/s. 50 C and value of property as per stamp authority has been increased from 1.05 times to 1.10 times

(e) In schedule OS,

(i) The existing drop related to "Dividend income" is bifurcated into 2 parts i.e "Dividend income [other than (ii)]" and "Dividend income u/s 2(22)(e)" and respective changes are done in sl.no.2e _DTAA field and in sl.no.10(i)_Quarterly breakup of Dividend income. .

(ii) Dividend will now be taxable from Rs.1/‐ as the section 115BBDA is omitted. Accordingly Interest expenditure u/s 57(1) to earn Dividend can be claimed at sl.no.3.

(iii) The existing drop down at Sl. No. 2d "115AD(1)(i)‐ Income received by an FII in respect of securities (other than units referred to in section 115AB)" bifurcated into 2 drop downs as under:‐

• 115AD(1)(i)‐Income being Dividend received by an FII in respect of securities (other than units referred to in section 115AB) @20%
• 115AD(1)(i)‐Income being other than dividend income received by an FII in respect of securities (other than units referred to in section 115AB) @20%

(iv) Further new drop downs are inserted in sl. No. 2d and Sl. No. 2e wrt "Interest referred to in section 194LC(1)" and Distributed income being Dividend referred to in section 194LBA

(v) Section 115BBDA is removed from AY 2021‐22 onwards hence corresponding drop downs are removed from sl. No. 2c, 2d and 2e of schedule OS and respective changes are done in sl.no.10(i)_Quarterly breakup of Dividend income.

(vi) In existing Sl. No. 10 "Information about accrual/receipt of income from Other Sources"

• Field "Dividend Income u/s 115BBDA" is changed to "Dividend income" due to finance Act changes
• New line item is inserted to capture the quarter wise break up of "Dividend income which is taxable at DTAA Rates''. This information will be used to calculate interest u/s 234C.

(f) In Schedule CFL, the bifurcation of PTI loss and other than PTI loss has been removed from "HP loss", "Short term capital loss" and "Long term capital Loss"

(g) In Schedule 80GGA, w.e.f. 01.06.2020, the eligible limit of Donation in cash is changed Instructions to Form ITR-2 (AY 2021-22) from Rs. 10,000 to Rs. 2,000. Hence date field is inserted to capture date of donation in cash

(h) In Schedule EI, the field for "Dividend Income" is removed from exempt income as for AY 2021‐22 onwards dividend income will be taxable in the hands of shareholders . Similarly corresponding Changes are also made in schedule OS , schedule Pass Through Income (PTI) to remove reference of section 115O

(i) Schedule DI (Details of Investment) has been removed as it was relevant only for AY 20‐21

(j) Sl.No. 8 "Gross tax payable (higher of 1d and 7)" of Schedule Part B TTI has been bifurcated in below two fields

Sl.No. 8a - "Tax on income without including income on perquisites referred in section 17(2)(vi) received from employer, being an eligible start‐up referred to in section 80‐IAC (Schedule Salary)"

Sl.No. 8b - "Tax deferred ‐ relatable to income on perquisites referred in section 17(2)(vi) received from employer, being an eligible start‐up referred to in section 80‐ IAC"

Tax on ESOP received from eligible start‐up will be deferred and is payable by the assessee within fourteen days -

(i) after the expiry of forty‐eight months from the end of the relevant assessment year; or

(ii) from the date of the sale of such specified security or sweat equity share by the assessee; or

(iii) from the date of the assessee ceasing to be the employee of the employer who allotted or transferred him such specified security or sweat equity share, whichever is the earliest.

(k) In Schedule Part BTTI, the assessee needs to disclose surcharge before "Marginal Relief" and after "Marginal relief".

(l) In Schedule TDS, earlier TDS credit is allowed only if corresponding income is being offered for tax this year , however an exception is being added for TDS u/s 194N.

(m) Upload level validations table is modified w.r.t mapping changes and new rules.