How to choose which income tax return form is applicable to you for FY 2020-21

You must file an ITR for the financial year 2020-21 if your total income during the financial year (FY) exceeds Rs 2.5 lakh before taking into account common deductions such as Section 80C, Section 80D, and other provisions of the Income-tax Act, 1961.

Even if your total income does not exceed Rs 2.5 lakh, but your income payer has deducted taxes and you need to seek a refund from the tax authorities, you must file an ITR or you will not receive the refund you are entitled to. As a result, you must examine the facts that apply to your specific situation in order to determine whether you have to file ITR or not.

On March 31, 2021, the Central Board of Direct Taxes (CBDT) advised ITR structures for FY 2020-21. Having due respect to the pandemic circumstance, CBDT has kept ITR shapes generally unaltered from last year and just changes important to fuse new arrangements have been made in the structures. So, in case you are not a first-time ITR filer, you won’t get any terrible shocks with regards to announcing and divulgence prerequisites in the ITR structures. Likewise, because of the pandemic, CBDT has stretched out the due date to document ITR for people to September 30, 2021.

Is it true that you are needed to file ITR?

To respond to whether or not you should file ITR, the underneath illustrative circumstances might require ITR petitioning for a person:

• Absolute pay surpasses the most extreme sum not chargeable to burden. The essential exclusion limit for FY 2020-21 is Rs 3 lakh for senior residents (matured 60 years or more yet under 80 years), Rs 5 lakh for very senior residents (matured 80 years or more), and Rs 2.5 lakh for others under the old tax regime. However, on account of an individual deciding on the new concessional charge system under Section115BAC, the most extreme sum not chargeable to burden is Rs 2.5 lakh for all classes of individual citizens;
• The individual must request a refund of any excess taxes deducted from his earnings or any excess tax payments made;
• During FY 2020-21, the individual qualifies as an ordinarily resident of India and has foreign assets that must be disclosed separately in the ITR. Foreign bank accounts, foreign properties, financial assets, and other assets are examples of these assets.
• The individual has attempted explicit exchanges viz (a) installment of power bill in abundance of Rs 1 lakh during the FY (b) kept more than Rs 1 crore one or more current accounts during the FY or (c) spent more than Rs 2 lakh on abroad travel for self or some other individual during the FY;
• The individual has suffered a loss under the heading “Capital Gains” or “Business and Professional Gains and Profits” and this must be carried forward to offset in the future FY.

The ITR can also be submitted for other administrative requirements, such as applying for a loan, visa for travel abroad, etc.

Which ITR will apply to you for the FY 2020-21?

The next important question is which ITR form to use and who to use it. The details of the ITR forms are summarized below:

Consequences of late filing / non-filing

If the ITR is not received before the due date, i.e. on September 30, 2021, will be fined between Rs 1,000 and Rs 5,000 and must be remitted before the ITR can be presented. Late ITRs are subject to a fee or penalty, even if the tax liability is zero, and if the filing is late, taxpayers will not be able to carry forward losses that can be offset against eligible income in future years.

If a person has taxable income and unpaid taxes but fails to pay the taxes or file the ITR, the tax authorities can issue a notice to the person. The taxes to be paid and the default interest incurred.

From FY 2020-21, one should likewise remember that a new concessional tax regime under Section 115BAC of the Act can be selected at the time of ITR filing where such choice is practiced inside the due date for filing the ITR. If ITR is filed after the due date, then income tax rates and slabs under old tax regime will be applicable.

Therefore, it is important not only to submit the annual ITR, but also to choose the correct ITR form, pay taxes on time, and complete the ITR filing on time to avoid consequences.