ITR filing: 5 key changes in ITR-1 you need to know

Effectively, the government will now be able to link the passport number and PAN of all those who are filing ITR 1 for current financial year. This is because the income tax return form 1 notified for financial year 2019-20 requires the filer to mandatorily mention passport number if any and of course the form cannot be filed without mentioning PAN. Therefore, at the back-end the government database for all ITR-1 filers who possess passports will have both pieces of information together i.e. PAN and passport number.

Here's a list of the 5 key changes, including the one mentioned above, introduced in the ITR1 for financial year 2019-20.

• Passport details

In this year's ITR-1, taxpayers will have to provide their passport number (if they have one). This is a new addition.

Chartered Accountant, Naveen Wadhwa, DGM, Taxmann.com says, "It is a possibility that passport details are asked to check if you have travelled to a foreign country in FY 2019-20 or the income declared by you matches with your ability to incur the expenses of foreign travel on yourself or any other person."

Last year in July 2019 Budget, it was announced that those who have incurred expenses of Rs 2 lakh or more for foreign travel either on himself or any other person, will have to mandatorily file ITR.

• TAN of your employer

This year's ITR-1 asks for detailed information of your employer. Until last year, a taxpayer simply had to select the nature of employment, i.e., Government, PSU, Pensioners, Others from a drop down menu in case of ITR 1.

From this year, those filing ITR1 will have to provide the Tax Deduction Account number (TAN) of the employer, mandatory if tax is deducted. Other details required are name, nature, address of the employer.

According to the notified form, these details will be pre-filled automatically, once TAN of the employer is filled by the taxpayer in ITR-1. You can find the employer's TAN details in your Form-16.

It is mandatory for your employer to give you Form-16 if tax is deducted.

• PAN or Aadhaar details of your tenant

If you have rented out a property, then you will have to provide name and Aadhaar or PAN details of your tenant, if available.

Wadhwa says, "It is yet to be seen whether ITR-1 form utility will allow the taxpayers to file the tax return without providing tenant details in case of let-out of property. The field has been introduced and it appears that it will be mandatory in new ITR-1 and ITR-4."

• Complete address of your house

You will now have to provide the complete address of your house property in ITR-1.

Wadhwa says, "It is now mandatory that you have to provide the complete address of your house irrespective of whether it is - self-occupied, deemed to let-out or let-out. Earlier, these details were asked only in ITR-2 and ITR-3."

Provide details of unrealised rent
If during FY 2019-20, you have not received the rent which was due to you, then such details are also required to be provided.

Wadhwa says, "Taxpayer eligible to file ITR-1 is required to provide the rent which was due but not received in FY 2019-20. Such information was earlier asked only in ITR-2 and ITR-3."

• Eligibility criteria for ITR-1 restored

The CBDT had put certain restrictions on who could file tax returns using ITR-1 for FY 2019-20. In its notification issued on Janaury 3, it stated that ITR-1 could not be used by individuals who own single house property that is jointly owned or fulfilled one of the conditions in the seventh proviso of 139(1).

The seventh proviso of 139(1) refers to those individuals who have incurred expenses of Rs 2 lakh or more for travel to foreign country either on himself or any other person or individuals who have deposited more than Rs 1 crore in one or more current accounts or/and paid electricity bill of more than Rs 1 lakh in FY2019-20.

However, the tax department rolled back the restrictions it announced. According to press release dated January 9, 2020, the income tax department said that concerns raised for the changes in ITR-1 are likely to cause hardships to individual taxpayers as such taxpayers would require to file detailed ITR form if they own a house property jointly or satisfy any conditions of the seventh proviso of 139(1). Therefore, to avoid such hardships to the taxpayers, the department has allowed such individuals to file ITR-1, provided they satisfy other conditons.

The ITR-1 can be filed by a resident individual whose total income does not exceed Rs 50 lakh and is not either director in a company, or has invested in unlisted equity shares. Further, the sources of income should be from salary, single house property, interest income, family pension etc.

Now, essentially, an individual will now have to taken into account five changes mentioned above.