I-T Dept allows taxpayers having joint house property to use simple return form
10 Jan 2020
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The Income Tax Department on Thursday allowed joint owners of single house property to file income tax return using simple Form-1 (Sahaj) or Form-4 (Sugam), withdrawing an earlier order.
The Central Board of Direct Taxes (CBDT) had, on 3 January, issued an order barring individual taxpayers owning house property in joint ownership and those who paid Rs1 lakh in electricity bills in a year or incurred Rs2 lakh expense on foreign travel from filing their annual income return using the simple return forms.
This notification had raised concerns that the changes are likely to cause hardship in the case of individual taxpayers.
"After the notification, concerns have been raised that the changes are likely to cause hardship in the case of individual taxpayers," the Central Board of Direct Taxes (CBDT) stated in a release.
"It has been decided to allow a person, who jointly owns a single house property, to file his/her return of income in ITR-1 or ITR-4 Form, as may be applicable, if he/she meets the other conditions," according to the statement.
"It has also been decided to allow a person, who is required to file return due to fulfilment of one or more conditions specified in the seventh proviso to section 139 (1) of the Act, to file his/her return in ITR-1 Form," it added.
The government, which usually notifies forms for filing income tax returns by individuals in April every year, on January 3 notified tax return forms for assessment year 2020-21 (income earning year 1 April 2019 to 31 March 2020).
Returns in ITR-1 Sahaj can be filed by an ordinary resident individual whose total income does not exceed Rs50 lakh, while Form ITR-4 Sugam is meant for resident individuals, HUFs and firms (other than LLP) having a total income of up to Rs50 lakh and having presumptive income from business and profession.
The 3 January notification effected two major changes in the ITR forms - first, an individual taxpayer cannot file return either in ITR-1 or ITR4 if he is a joint-owner in house property. Second, ITR-1 form is not valid for those individuals who have deposited more than Rs1 crore in bank account or have incurred Rs2 lakh or Rs1 lakh on foreign travel or electricity respectively, it said.
Such taxpayers were to use different forms, which would have been notified in due course.
The CBDT said to ensure that the e-filing utility for filing of return for assessment year (AY) 2020-21 is available as on 1 April 2020, the Income-tax Return (ITR) Forms ITR-1 (Sahaj) and ITR-4 (Sugam) were notified on 3 January.
"In the notified returns, the eligibility conditions for filing of ITR-1 and ITR-4 Forms were modified with an intent to keep these forms short and simple with bare minimum number of Schedules. Therefore, a person who owns a property in joint ownership was not made eligible to file the ITR-1 or ITR-4 Forms.
"For the same reason, a person who is otherwise not required to file return but is required to file return due to fulfilment of one or more conditions in the seventh proviso to section 139 (1) of the Income-tax Act, 1961 (the Act), was also not made eligible to file ITR-1 Form," it said.
After the notification, concerns were raised that the changes are likely to cause hardship in the case of individual taxpayers.
"The taxpayers with jointly owned property have expressed concern that they will now need to file a detailed ITR Form instead of a simple ITR-1 and ITR-4. Similarly, persons who are required to file return as per the seventh proviso to section 139(1) of the Act, and are otherwise eligible to file ITR-1, have also expressed concern that they will not be able to opt for a simpler ITR-1 Form," it said.
