Changes in new ITR Forms for AY 2021-22

Changes in new ITR Forms for AY 2021-22

CA Pratibha Goyal | Apr 5, 2021 |

Changes in new ITR Forms for AY 2021-22

Changes in new ITR Forms for AY 2021-22

CBDT has released new ITR Forms vide Notification Number 21/2021 dated April 1, 2021.

This article discusses changes in new ITR [Income Tax Return] Forms released by the Central Board of Direct Taxes [CBDT] for AY 2021-22 or FY 2020-21.

Amount Deferred in respect of ESOPs

If an Employee of Eligible Startup u/s has received ESOPs and Taxliability on same has been deferred, then ITR-1 cannot be filed. The same shall be shown in ITR-2 or ITR-3.

TDS under section 194N

Tax under section 194N is required to be deducted if the amount of cash withdrawn during the year exceeds Rs. 20 lakhs in the case of certain non-filers of ITR and Rs 1 crore in other cases.

Any Tax Payer, whose TDS  has been deducted under section 194N cannot File ITR-1.

No Option provided to carry Forward TDS under section 194N

TDS under section 194N is not related to the income of the taxpayer. It is related to cash withdrawal during the year. Thus no, option to carry forward TDS has been provided in the Forms.

Change has been made in ITR-2 to ITR-7 Accordingly.

Taxability of Dividend Income

  • The dividend was made taxable by Finance Act 2020. Accordingly, the ITR Forms for FY 2020-21 have been amended to account for the same.
  • Also, Taxpayers are required to provide a Quarterly breakup of Dividend income for Calculation of Interest u/s 234C
  • Schedule DDT has been removed from ITR-6 [Applicable on companies].

Marginal Relief Effect to be highlighted in the ITR Form

ITR Forms have been amended to provide for Surcharge computed before marginal relief and Surcharge after marginal relief.

Tax Audit Limit Changes

As we know the Tax Audit Limit has been increased to Rs. 10Cr from Rs. 5Cr by Finance Act 2021 where:

(a) the aggregate sales, in cash, does not exceed 5% of total sales; and
(b) the aggregate payments, in cash, does not exceed 5% of total payment.

Accordingly, the ITR Forms for AY 2021-22 have been amended to account for the same.

Adjustment of unabsorbed depreciation and losses on account of various exemptions and deductions for Taxpayer opting for Section 115BAC or 115BAD

Unabsorbed depreciation

A taxpayer opting to take benefit of Section 115BAC or Section 115BAD:

  • Cannot carry forward unabsorbed depreciation relating to additional depreciation.
  • Cannot take a further deduction on account of additional depreciation.

However, as a one-time relief, the taxpayer is allowed to increase the WDV of the block of an asset by the amount of the unabsorbed depreciation if he opts for this tax regime in AY 2021-22. Accordingly, the ITR Forms have been amended.

Losses on account of various exemptions and deductions

A taxpayer opting to take benefit of Section 115BAC or Section 115BAD:

  • Cannot carry forward Losses on account of various exemptions and deductions as specified in Section 115BAC or Section 115BAD.
  • Cannot take a further deduction on account of same.

Accordingly, the ITR Forms have been amended for the same for taxpayers opting for this tax regime in AY 2021-22.

Section 80M Deduction

As per Section 80M introduced by Finance Act 2020:

  • The deduction can be claimed by a domestic company for the amount received as a dividend from another domestic company, a foreign company, or a business trust.
  • The deduction is allowed when the company further distributes the dividend to the shareholders.
  • Accordingly, the ITR-6 Form has been amended to account for the same.

Schedule DI Deleted

During FY 2019-20, the due date for claiming deduction under Chapter VI-A, section 10AA, and section 54 to 54GB was extended till 30-06-2020. This was benefit given at the time of lockdown.

Now this schedule DI for reporting such investments has been Deleted.

Date to be mentioned in respect of Cash Donations u/s 80GGA

The ITR forms notified for Assessment year 2021-2022 require additional disclosures of the date on which such cash donation has been made.

No separate reporting of LIC Bussiness Income

The ITR forms notified for Assessment Year 2021-2022 have removed such separate reporting requirements in respect of income from the life insurance business in Schedule BP.

A specific ceiling that deduction u/s 54EC cannot exceed Rs. 50 Lakh has been provided in the ITR Forms.

Section 80P deduction: Nature of business code to be mentioned by the taxpayer

Now Nature of the business code is to be mentioned if the assessee is claiming deduction under section 80P.

StudyCafe Membership

Join StudyCafe Membership. For More details about Membership Click Join Membership Button
Join Membership

In case of any Doubt regarding Membership you can mail us at [email protected]

Join Studycafe's WhatsApp Group or Telegram Channel for Latest Updates on Government Job, Sarkari Naukri, Private Jobs, Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"




Author Bio
My Recent Articles
Due Date for Mutual Fund ELSS Investment for 80C is 28th March not 31st March: Hurry Late MSME Payment section 43B(h) now reality: What to do in this case These Income Tax High Value Transactions that May Trigger Notice from IT Department; Check List Last Chance to file Updated ITR for AY 2021-22: Be Ready to pay 200% of Tax Evaded if missed Important tasks to be completed before 31st March 2024View All Posts