Changes in ITR-1 form for FY 18-19

Changes in ITR-1 form for FY 18-19

Recently Income Tax Department came with the changes in Form 16 issued by employer along with changes in TDS return filed in form 24Q and Income Tax Form to be filed by employees.

This year steps have been taken by Income Tax Department in order to reconcile following forms:

  1. Form 16 : Certificate from the employer that has details of salary paid to an employee and tax deducted at source (TDS).
  2. Form 24Q : Returns filed by the employer for the tax deducted.
  3. ITR-1 : To be filed by salaried employees/Pensioners or people having income from one house property.

In this article we will be discussing about changes made by Income Tax Department in ITR-1 Form.

Up to assessment year 2018-19 individuals use to report the salary amount excluding all the exempt and non-exempt allowances, perquisites and profit in lieu of salary.These items were reported separately in same schedule and had no impact on calculation of net salary income.

New ITR-1 form has changed the mechanism to report the salary income for Assessment Year 2019-20.

New ITR-1 form has been designed in sync with the column of form 16 (TDS Certificate Issued by Employer) i.e. now in assessment year 2019-20 an individual will have to mention his gross salary , followed by exempt allowances, perquisites and profit in lieu of salary shall be added or deducted in order to arrive at the taxable salary.

Further new ITR-1 form requires separate reporting of all the deductions allowable under section 16, namely:

  1. Standard Deduction
  2. Entertainment Allowance
  3. Professional Tax

Up to Assessment Year 2018-19, taxpayers were required to disclose the aggregate amount of income taxable under the head other sources. However, from Assessment Year 2019-20, it is mandatory for an assessee to specify the nature of income taxable under the head income from other sources.

A person who is a director in a company shall not be able to use ITR-1 and ITR-4 for filing of return of income and he has to use ITR 2 or ITR 3, as the case may be. Further, if an individual has been director in a company at any during the previous year, he has to provide the following information:
a) Name of Company
b) PAN
c) Whether shares of the company are listed or unlisted?
d) DIN

Advice to all the salaried people would be to carefully file there returns and claim only for those investments as deduction which have been submitted to employer for TDS calculation.

There might be cases, where employees are not able to submit there proof of investments to their employers, in that case there employer would deduct TDS on higher side.

And in order to claim the refund of  TDS which have been deducted by employer due to non submission of investment proofs, employees will have to claim the investments as deduction while filing the return on the income tax portal, if that will be the case, there are chances that employees would get notice from income tax department seeking the mismatch in amount claimed in form 16 V/S claimed in return, if so happens then employees will have to justify there deduction by depositing the proof of investment to the income tax dept.

So it is recommended to claim only those investments as deduction for which you have the investment proofs


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