5 Major changes in ITR Forms 2019-20 for Individuals

  • Blog|Income Tax|
  • 5 Min Read
  • By Taxmann
  • |
  • Last Updated on 19 October, 2022
The CBDT has notified the Income-tax Return (ITR) Forms for the Assessment Year 2019-20 with many changes. The 5 major changes which are applicable in case of an Individual are as follows:-

1. Identification of ghost directors and shell companies:

[ITR 1, 2, 3, 4]
Of late the Government has taken many initiatives to curb the black money and shell companies. One of such initiatives is to identify the ghost directors who do not even know that they are directors in companies. Accordingly, the Government has made it mandatory for every director in a company to e-file KYC form DIR 3, otherwise his Director Identification Number (DIN) shall be deactivated.
Now, the Government has made changes in ITR forms to identify the shell companies and ghost directors. 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
                              Speaker: CA Dipen Mittal

2. Investment in unlisted companies:


[ITR 2, 3, 5]

Where a company issues shares at a price which is less than its FMV and the difference between the FMV and issue price exceeds Rs. 50,000 then the difference is charged to tax in the hands of the shareholders under the head income from other sources. In order to keep check on issue of shares by a closely held companies and investment made therein by shareholders, a new table has been inserted in new ITR forms to seek the following details in respect of unlisted equity shares held at any time during the previous year by an assessee: a) Name of the company b) PAN of the company c) No. and cost of acquisition of shares held at the beginning of the year d) No. of shares, face value, issue price (or purchase price) and date of purchase of shares acquired during the year e) No. and sale consideration of shares transferred during the year f) No. and cost of acquisition of shares held at the end of the previous year

3. Reporting of salary income on gross basis:

[ITR 1, 2, 3, 4] The new ITR forms have changed the mechanism of reporting of salary income. Up to Assessment Year 2018-19, an individual was required to report salary amount excluding all 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. The new ITR forms have changed this reporting mechanism, which is now in sync with the columns of Form 16 (TDS Certificate issued by the employer). Now, from Assessment Year 2019-20, an individual has to mention his gross salary and then the amount of exempt allowances, perquisites and profit in lieu of salary shall be deducted or added to arrive at the taxable figure of salary income. Further, the new ITR forms seek separate reporting of all deductions allowable under Section 16, namely: a) Standard deduction b) Entertainment allowance  c) Professional tax

  Income Tax Updates

4. Buyer’s information is required in case of transfer of immovable property:

[ITR 2, 3, 5, 6] If assessee reports capital gain, from transfer of an immovable property, in income-tax return, it would be mandatory for him to furnish the following information about the buyer: a) Name of buyer b) PAN of buyer c) Percentage share d) Amount e) Address of property f) Pin code It is mandatory for the assessee to furnish the PAN of buyer in ITR form if tax has been deduced under section 194-IA or PAN is quoted by buyer in the registration documents. PAN is otherwise a mandatory document to buy or sell an immovable property if the stamp duty value or the sales consideration exceeds Rs. 10 lakhs.

5. ITR 1 and ITR 4 ask for nature of residuary income:

[ITR 1 and ITR 4]   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 and the deductions claimed in respect of family pension in accordance with Section 57. Such extra disclosures have been asked by the Dept. to check that the ineligible persons are not using the ITR 1 and ITR 4 for filing of return.  

Also Read:  Major Disclosures made by Startups under New ITR Forms

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