TaxAlerts cover significant tax news, developments and changes in legislation that affect Indian businesses. They act as technical summaries . For more information, please contact EY India.

1. 6 April 2021
Tax Alerts cover significant
tax news, developments and
changes in legislation that
affect Indian businesses. They
act as technical summaries to
keep you on top of the latest tax
issues. For more information,
please contact your EY advisor.
Executive summary
This Tax Alert summarizes the key amendments made to the Income Tax Return (ITR)
forms for tax year 2020-21, vide Notification No. 21/2021 dated 31 March 2021
(Notification) issued by the Central Board of Direct Taxes (CBDT)1
. The Notification has
also amended Rule 12 of the Income Tax Rules, 1962 (Rule 12) to curtail eligibility of
certain resident taxpayers to file ITR-1 Sahaj and ITR-4 Sugam. As per the Notification,
resident taxpayers in whose case a 2% withholding tax has been deducted on cash
withdrawals exceeding INR10m (reduced to INR2m in certain cases) made during a tax
year, shall be debarred from filing ITR-1 Sahaj. Further, resident taxpayer employees in
whose case tax deduction/payment has been deferred in respect of perquisite income
accrued due to Employee Stock Option Plans (ESOPs) allotted/ transferred by the
employer, being an eligible start-up, shall not be entitled to file ITR-1 Sahaj and ITR-4
Sugam.
The modifications made in the new ITR forms are majorly consequential to
amendments made in the provisions of the Income Tax Laws (ITL), such as option
provided to certain taxpayers to be governed by concessional personal taxation
regime, consequential changes due to shift to classical system of dividend taxation and
abolishment of Dividend Distribution Tax (DDT), concessional withholding tax rate on
interest incurred on foreign currency borrowings procured through an International
Financial Services Centre (IFSC), disclosure on tax deferred on perquisite income
arising from allotment/transfer of exercise of ESOPs etc.
1
Apex body of direct tax administration in India
EY Tax Alert
CBDT notifies tax return forms
for tax year 2020-21

2. Further, the provisions or disclosures which are
redundant and no longer relevant for the current
tax year 2020-21, have been eliminated from the
ITR forms, such as the separate schedule
introduced in the previous tax year 2019-20 for
providing details of investments/deposits/payments
made from 1 April 2020 to 30 June 2020 for
claiming benefit in tax year 2019-20 in line with
relief granted vide Taxation and Other Laws
(Relaxation of Certain Provisions) Ordinance, 2020
stands deleted. The reference to adjustment of
unabsorbed depreciation while computing tax
written down value (WDV) of plant and machinery is
deleted as it was a one-time relief option provided
to companies opting for concessional tax regime in
tax year 2019-20 etc.
Accordingly, the recently notified ITR forms have
been amended to embrace the new changes
introduced under the ITL and to do away with the
old redundant requirements.
Background
► The CBDT, vide the Notification, has amended
Rule 12, as also notified the ITR forms, for all
categories of taxpayers for tax year 2020-21
[assessment year (AY) 2021-22]. However, the
instructions for filing the ITR forms are
awaited. Refer Annexure 1 which explains the
applicability of the ITR forms to various
categories of taxpayers.
► This Tax Alert summarizes the key changes in
the ITR forms as compared to the immediately
preceding tax year 2019-20.
Changes in Rule 12 –
Applicability of simplified
ITRs curtailed
► Rule 12 provides for specified taxpayers (such
as small taxpayers and taxpayers offering
income under presumptive taxation) to file their
returns under the simplified ITRs (ITR-1 Sahaj
and ITR-4 Sugam) containing only few
disclosure requirements.
► The CBDT, vide the Notification, has amended
the scope of Rule 12 and curtailed certain
taxpayers from filing the above mentioned
simplified ITRs. The Notification provides that:
o A taxpayer cannot file simplified ITR-1
Sahaj if a 2% withholding tax has been
deducted on cash withdrawals exceeding
INR10m (reduced to INR2m in certain
cases2
) made by the taxpayer in a tax
year.
2
Refer Section 194N of the ITL
o Taxpayers cannot file simplified ITR-1
Sahaj or ITR-4 Sugam, if they have
perquisite income arising from
allotment/transfer of ESOPs and tax on
which is payable or deductible on a
deferral basis. The ITL provisions3
provide that tax on perquisite value of
ESOPs computed at the time of exercise
in the hands of employees of eligible
start-ups can be deferred from the
exercise date to within 14 days of earlier
of the following:
▪ Expiry of four years (48 months)
from end of relevant AY; or
▪ Date of sale of shares; or
▪ Date from exit from the start-up by
employee.
Key changes in ITR Forms
1. Common amendment made in different
ITR Forms
1.1. Additional reporting requirement for
taxpayers liable to transfer pricing (TP)
provisions of the ITL (ITR 3, 5, 6):
Erstwhile ITR forms only required
taxpayers to state whether they were liable
to carry out audit of account under the TP
provisions of the ITL and furnish the date
of such audit report. However, ITR forms of
tax year 2020-21 have been amended to
provide for additional reporting
requirement – If liable to audit, then
whether the accounts of the taxpayer have
been audited or not. Thus, requiring
information of actual compliance by the
taxpayer if liable to audit under the TP
provisions of ITL.
1.2. Additional reporting requirement for long-
term capital gains computed on transfer
of specific securities (ITR 2, 3, 5, 6):
Under the ITL, long-term capital gains
arising from transfer of equity shares,
units of equity-oriented mutual funds or
units of business trust is taxable at 10% in
excess of INR0.1m, provided such transfer
is chargeable to Securities Transaction Tax
(STT). The provision has been made
applicable to income arising to Foreign
Portfolio Investors (FPIs) also. Pursuant to
the same, taxpayers are required to
provide details of such long-term capital
gains in Schedule 112A and Schedule
115AD of the ITR forms. For tax year
2020-21, these schedules have been
amended to specifically include a column
wherein the taxpayer is required to
mention the nature of security acquired
i.e., whether a share or a unit. This is in
addition to providing other information
3
Refer Section 191(2) and Section 192(1C) of the ITL

3. such as International Securities
Identification Number (ISIN) code of
share/unit, name of the share/unit etc.
1.3. Computation of income from life
insurance business deleted (ITR 5, 6): In
the ITR forms notified for tax year 2019-
20, a separate line item was included for
the purpose of computation of income
from life insurance business, requiring
details of net profit/loss from life insurance
business and additions/deductions made.
This detailed break-up computation of
income from life insurance business stands
deleted in the ITR forms notified for tax
year 2020-21. The taxpayers are now
required to only provide for a single total
figure for profits and gains arising from life
insurance business. The other changes
made to the ITR forms for tax year 2019-
20 with respect to life insurance business
continue to be applicable, such as separate
disclosure of losses to be carried forward
from life insurance business which is
provided under Schedule CFL.
1.4. Deletion of the “Schedule DI – Details of
Investment” (ITR 1, 2, 3, 4, 5, 6): Due to
explosion of the COVID-19 pandemic, the
President had promulgated Taxation and
Other Laws (Relaxation of Certain
Provisions) Ordinance, 20204
on 31 March
2020 to grant various procedural
relaxation for compliance under various
laws. It included extension of last date of
carrying out requisite
investments/deposits/payments to claim
various benefits under the ITL for tax year
2019-20 from 31 March 2020 to 30 June
2020. Pursuant to the said relief, a
separate schedule was introduced for ITR
forms applicable to tax year 2019-20 to
furnish details of
investments/deposits/payments made on
or after 1 April 2020 to 30 June 2020 with
respect to which deductions are to be
claimed under Chapter VI-A of the ITL
and/or amount utilized from the Capital
Gains Account Scheme for various capital
gains exemption provision compliances.
The deadline related to certain capital
gains compliances was further extended to
30 September 2020 and to Chapter VI-A
deductions to 31 July 2020 by Notification
No. 35/2020 dated 24 June 2020.
Considering that the extension of time limit
for claiming deduction under Chapter VI-A
of the ITL or investments for claiming
exemption from capital gains was only for
tax year 2019-20, the following
amendments have been notified in the ITR
forms of tax year of 2020-21:
(i) Schedule DI capturing the relevant
information of the above relaxation is
deleted. Consequently, the references
of Schedule DI in other schedules,
4
Refer our Tax Alert, “COVID 19 Impact - Government
extends various timelines up to 30 June 2020 and
being CG Schedule and Schedule VI-A
also stand deleted.
(ii) Schedule VI-A is appended with a note
stating that where deduction in
respect of
investments/deposits/payments for
the period 1 April 2020 to 31 July
2020 has been claimed in returns of
tax year 2019-20 (i.e., AY 2020-21),
the same cannot be claimed again in
the returns of subsequent tax year
2020-21 (i.e., AY 2021-22).
1.5. Additional reporting requirement for
certain donations made towards scientific
research or rural development (ITR 2, 5,
6): Schedule 80GGA of the ITR forms
dealing with reporting requirements
related to donations made towards
scientific research or rural development, as
provided under Section 80GGA of the ITL,
is amended to provide for an additional
disclosure requirement of “date of
donation in cash”, besides the taxpayer
providing information about the amount of
cash donation made.
1.6. Elimination of bifurcation of carried
forward losses into pass through losses
and others (ITR 2, 3, 5, 6): Erstwhile
provisions of the ITL provided that where
the net computation of income of an
investment fund was a loss, such loss had
to be captured at the level of the
investment fund only and the same could
not be passed on to the unitholders of the
investment fund. However, Finance (No. 2)
Act, 2019 changed such treatment and
provided that losses arising from tax year
2019-20, with respect to losses other than
arising under the head of income from
business and profession, shall be passed on
to the unitholders meeting stipulated
conditions. Schedule CFL of ITR forms,
notified for previous tax year 2019-20,
provided for details of losses to be carried
forward to future years, with separate
bifurcation with respect to house property
loss, short-term capital loss and long-term
capital loss into normal losses and losses
made available due to pass through from
investment fund. This requirement has
been deleted from the ITR forms notified
for tax year 2020-21 and, consequently,
no bifurcation is now required to be made.
1.7. Deletion of reference of distribution of
accumulated loss by Investment fund to
its unitholders (ITR 5,6): As stated at Para
1.6, earlier losses were captured at the
investment fund level only and not
subjected to pass through in hands of the
unitholders. However, Finance (No. 2) Act,
2019 provided that for losses accumulated
with the investment fund as on 31 March
2019, with respect to income other than
income from business and profession, shall
provides relaxations under various direct tax laws in India”
dated 1 April 2020

4. be considered as loss of the unitholders
and shall be allowed to be carried forward
by such unitholders. Pursuant to the same,
ITR forms of previous tax year 2019-20
were amended to provide a separate line
item in Schedule CFL (details of losses to
be carried forward to future years) to
provide for losses distributed by
investment fund amongst its unitholders.
Considering that such adjustment of
accumulated losses was allowed to be
made only in tax year 2019-20, the above
line item has been deleted from ITR forms
of current tax year 2020-21.
1.8. Reference to Form 16D inserted in
Schedule of “Tax Payments” (ITR 3, 4, 5,
6, 7): As per the provisions of the ITL,
every individual and Hindu Undivided
Family (HUF) responsible for paying to a
resident a sum for carrying out any work
(including supply of labor for carrying out
any work) in pursuance of a contract, by
way of commission or brokerage or by way
of fees for professional services during the
tax year, shall be required to deduct tax
from such payment or at the time of credit
of such sum to the account of the resident
(whichever is earlier) at 5%, if the
aggregate of the sums paid/credited to
account of a resident exceeds INR5m
during a tax year. The tax deductor is
required to furnish information of the same
in certification of tax deducted - Form 16D.
Schedule “Tax Payments” is amended to
include reference to Form 16D in the
context of reporting requirement of Tax
Deducted at Source (TDS) deducted on
behalf of the taxpayer under such provision
of the ITL and reflected in such form.
1.9. Additional instruction provided in respect
of claim of TDS credit (ITR 2, 3, 4, 5, 6,
7): Schedule Part B- TTI (computation of
tax liability on total income), inter alia,
included information in relation to “tax
payments” made by the taxpayer in the
form of advance tax, self-assessment tax,
TDS etc. In case of disclosure requirement
related to TDS credit claimed by the
taxpayer, the ITR form provided that TDS
credit can be claimed in a particular tax
year only if the corresponding income on
which the tax is deducted has been offered
to tax in the same tax year. This instruction
has been amended by the Notification to
provide that it is not applicable if tax has
been deducted @ 2% on cash withdrawals
made in excess of INR10m (reduced to
INR2m in certain cases5
) under the
provisions of the ITL.
1.10. Separate disclosure of effect of marginal
relief in case of taxpayer (ITR 2, 3, 5):
Under the provisions of the ITL, a marginal
relief is provided when taxable income is
beyond a threshold limit after which
surcharge is payable, but the net income in
5
Refer Section 194N of the ITL
excess of such threshold limit is less than
the amount of surcharge. The ITR forms
have been amended to disclose the effect
of marginal relief by inserting two separate
columns when calculating surcharge for
the taxpayer i.e., “surcharge computed
before marginal relief” and “surcharge
after marginal relief”.
2. Key changes which are consequential to
amendments made in provisions of the
ITL:
2.1. Disclosure on whether the taxpayer, being
an individual/HUF or co-operative society,
has opted for concessional tax regime for
respective tax year (ITR 1, 2, 3, 4, 5):
Finance Act, 2020 (FA 2020) provided for
a concessional personal tax regime,
wherein individuals and HUFs will be taxed
at reduced slab rates subject to certain
conditions being met, such as surrendering
claim of certain exemptions and
deductions. These provisions are
introduced as optional provisions, wherein
the individuals and HUFs can decide to opt-
in or not. The taxpayers opting for the
above provisions are required to notify the
tax authority of the same in a separate
form viz., Form 10-IE which is released by
the CBDT. Pursuant to the above
amendment, the ITR form in Part-A of
General Schedule requires the taxpayer
individual/HUF to choose whether it is
opting for the concessional personal tax
regime or not for the relevant tax year.
Further, if the taxpayer is opting for the
concessional provisions, then additional
information of the date of furnishing Form
10-IE, along with acknowledgment number
for the same, is to be reported. The latter
requirement of information relating to
Form 10-IE is present only in ITR Forms 3
and 4, and not in ITR Forms 1 and 2.
A similar concessional tax regime was also
introduced by FA 2020 for taxpayers,
being co-operative societies. These
provisions are also optional in nature.
Accordingly, Part A–General Schedule of
ITR -5 which, inter alia, is applicable to co-
operative societies has also been amended
to provide that taxpayers, being co-
operative societies, are required to state
whether they are opting in for the
concessional tax regime or not for the
respective tax year. Further, if the
taxpayer is opting for the concessional
provisions, then additional information of
date of furnishing Form 10-IE, along with
acknowledgment number for the same, is
to be reported.
2.2. Adjustment of unabsorbed depreciation to
tax WDV of block of assets, if taxpayer
individual/HUF/co-operative society has
opted for concessional income tax regime
(ITR 3, 5): As explained at Para 2.1, a new

5. and simplified personal income tax regime
was introduced by FA 2020, where
individuals and HUFs are subjected to tax
at reduced slab rates, provided they
surrender certain exemptions, deductions
and allowances. One such allowance to be
given up is additional depreciation on plant
and machinery. The unabsorbed
depreciation arising due to such additional
depreciation in the past is also deemed to
be given full effect to and shall not be
available for set-off in subsequent years.
However, a one-time window is provided to
taxpayers opting for concessional tax
regime in tax year 2020-21, wherein such
unabsorbed depreciation brought forward
as on 1 April 2020 shall be allowed to be
adjusted to tax WDV of the block of assets
as on 1 April 2020 in the manner
prescribed.
The ITR forms of tax year 2020-21 have
been amended to provide for a separate
line item for such adjustment to WDV of
block of assets in Schedule DPM
(depreciation on plant and machinery).
Further, the section also provides that
bought forward losses pertaining to certain
exemptions and deductions shall also be
deemed to be given full effect to and not
available for claim by taxpayers.
Consequent to the above, amendments
have been made in Schedule CFL (details of
losses to be carried forward to future
years) and Schedule UD (details of
unabsorbed depreciation) to adjust for
specific business losses and unabsorbed
depreciation, which shall be surrendered or
adjusted to tax WDV of block of assets if
the taxpayer opts for concessional
personal income tax regime and, hence, no
longer available for claim.
A similar concessional tax scheme has
been introduced for co-operative societies
as well by FA 2020 with a similar one-time
relief provided for adjustment to the tax
WDV of the block of assets. Consequently,
same amendment as above has been
carried out in Schedule DPM, Schedule CFL
and Schedule UD under ITR-5 which is,
inter alia, applicable to co-operative
societies.
2.3. Amendments pursuant to revert to
classical system of dividend taxation and
abolishment of DDT
(i) The classical dividend taxation regime
was reinstated by FA 2020 by
abolishing DDT. Under the erstwhile
dividend taxation regime, DDT was
levied on the payer company or mutual
fund, while the dividend income
remained exempt from tax in the hands
of the shareholder or unitholder. FA
2020 abolished DDT and shifted the
incidence of tax on the dividend from
the payer company to the hands of the
shareholders or unitholders.
(ii) Section 115BBDA of the ITL provided
for taxation of dividends in the hands of
shareholders, where dividend was
received from domestic companies
(subjected to DDT) and was in excess of
INR1m in a tax year. Considering that
under the classical dividend taxation
regime, the entire income is taxable in
the hands of shareholders, this section
was deleted by FA 2020.
(iii) FA 2020 also provided that only
interest expense shall be allowed as a
deduction against the dividend income
of the taxpayer. Further, a separate
provision was introduced under the ITL,
being Section 80M, to provide that a
taxpayer domestic company shall be
entitled to claim deduction of dividend
income received by it from other
domestic companies, foreign companies
or business trust, to the extent that
such income does not exceed the
amount of dividend distributed by the
taxpayer domestic company on or
before the due date.
(iv) These amendments were applicable for
dividends distributed for and from 1
April 2020.
(v) Pursuant to the above amendments,
the following changes have been
effected in the ITR forms for tax year
2020-21:
(a) Reference to exemption provisions
of Section 10(34) and Section
10(35), which granted exemption
from tax on dividend income to
shareholders and unitholders,
stands deleted from Schedule OS
which deals with other income.
Earlier, only dividend income
which was not exempt under the
aforesaid section was to be
reported in the Schedule.
However, now, all of the dividend
income is to be reported (ITR 2, 3,
5, 6).
(b) Reference to Section 115BBDA
stands deleted from Schedule OS,
Schedule SI, wherein information
in relation to income chargeable to

6. tax at special rates under the ITL
is required to be provided by the
taxpayer. Schedule EI, wherein
information in relation to exempt
incomes is to be provided by the
taxpayer (dividend income from
domestic company not exceeding
INR0.1m). (ITR 2, 3, 5, 6, 7).
(c) Separate line item introduced in
the Schedule OS for dividend
income distributed by a business
trust to its unitholders. (ITR
2,3,5,6,7)
(d) Separate line item introduced in
the deductions available against
Other Sources Income in Schedule
OS towards interest expenditure
claimed as a deduction against
dividend income. (ITR 2,3,5,6,7)
(e) Schedule DDT, wherein the
Taxpayer, being dividend
distributing domestic company
was required to furnish details of
tax on distributed profits and
payment thereof stands deleted.
The Schedule required Taxpayer
to furnish various information,
such as date of dividend
declaration/ distribution, amount
of dividend declared/
distributed/paid, provisions of ITL
under which dividend is declared,
tax payable on such dividend, etc.
(ITR 6)
(f) Reference to section 80M of ITL
which provides for deduction of
certain inter-corporate dividends,
as explained above, included in
Schedule VI-A wherein deduction
claims are to be recorded by
Taxpayers (ITR 6)
(g) Reference to dividend income,
which was subject to DDT tax has
been deleted from Schedule PTI
wherein details of pass through
income received/ accrued from
business trust and investment
fund are required to be reported
(ITR 2,3,5,6,7)
(h) In ITR Forms 1 and 4, a specific
instruction has been included in
the line item wherein Taxpayer is
required to report “Income from
Other Sources” to provide that in
case of dividend income, quarterly
break up is required to be
mentioned for allowing applicable
relief from interest on deferral of
payment of advance tax
instalment. However, the notified
ITR Form does not reflect any
space for filing in such information
and hence, there may be certain
changes in the electronic file for
allowing Taxpayers to furnish such
information.
2.4. Concessional rate of withholding tax
(WHT) on interest incurred on foreign
currency borrowings procured through an
IFSC (ITR 2,3,5,6,7): Under the provisions
of the ITL, where interest is payable to a
non-resident by a domestic company on
monies borrowed by the company in
foreign currency in the form of loan
agreement, infrastructure bonds, rupee
denominated bonds and other notified
bonds, then as per Section 194LC of the
ITL, a WHT rate @ 5% is to be carried on
such interest payment by the domestic
company. FA 2020, in order to provide an
impetus to IFSC, provided for a preferential
WHT rate @ 4% on interest payable on
bonds, issued on or after 1 April 2020,
listed only on a recognized stock exchange
located in IFSC. Pursuant to the above
amendment, the Schedule OS is amended
to provide for separate disclosure of
interest income subject to WHT rates of
5%/4% as above i.e. as two separate line
items.
2.5. Increase in threshold limit from INR50M
to INR100M for tax audit cases for person
carrying on business for receipt and
payments in cash not exceeding in
aggregate 5% (ITR 3,5,6): The ITL
currently provide relief from tax audit to
taxpayer carrying on business and having
total sales, turnover or gross receipts up to
INR50M subject to cash receipts and
payments not exceeding 5% of total
receipts and payments respectively.
Finance Act, 2021 increased the threshold
limit of INR50M to INR100M for and from
AY 2021-22 (i.e tax year 2020-21).
Consequently, the ITR Form in Part-A of
General Schedule replaces the limit of
INR50M to INR100M in tax audit details.
2.6. Disclosure on tax deferred on perquisite
income arising from allotment/ transfer of
ESOPs (ITR 2 and 3): As explained above
under the heading “Changes in Rule 12 –
Applicability of simplified ITRs curtailed”,
FA 2020 provided for deferment of tax on
perquisite value of ESOPs computed at the
time of exercise of ESOPs by taxpayer of
an eligible start-up (employer). Pursuant to
the amendment, Schedule Part B – TTI
related to “Computation of tax liability on
total income” is amended to provide for
following disclosure:
(i) Tax on income without including
income being perquisite value of
ESOPs received from the
employer (being an eligible start-
up); and
(ii) Tax deferred - relatable to income
of taxpayer w.r.t perquisite value
of ESOPs received from the
employer (being an eligible start-
up).

7. 3. Key changes in ITR 3 – applicable to
individuals and HUFs having income from
profits and gains of business or
profession
3.1. Amendment to pass through income
details in Schedule PTI: Schedule PTI,
which contains the details of pass through
income received/accrued from investment
fund and business trust has been amended
by the Notification to provide that only
short-term capital gains accrued on
transfer of equity shares, unit of equity-
oriented fund or unit of business trust
subject to 15% tax under provisions of the
ITL, shall be disclosed as part of the
Schedule and other short term capital
gains cannot be disclosed.
4. Key changes in ITR 6 – applicable to
corporate taxpayers:
4.1. Adjustment to business losses carried
forward and unabsorbed depreciation
carried forward pursuant to opting in for
concessional corporate tax regime: The
Taxation Laws (Amendment) Act 2019
provided for concessional tax regime for
specified domestic companies, wherein the
corporate tax rate (CTR) stood reduced to
22% subject to meeting stipulated
conditions and surrendering of benefit of
certain allowances. One of allowances to
be surrendered by taxpayer is with respect
to additional depreciation. The ITL also
provides that unabsorbed depreciation
allowance related to such additional
depreciation shall be deemed to be given
full effect to and no further deduction shall
be allowed with respect to the same, for
taxpayers opting in for 22% CTR. A one-
time window was provided for taxpayers
opting for 22% CTR in the previous tax year
2019-20, wherein such unabsorbed
depreciation brought forward as on 1 April
2019 was allowed to be adjusted to the tax
WDV of the block of assets as on 1 April
2019 in the manner prescribed. The ITR
Forms of previous tax year 2019-20
provided for a separate line item for such
adjustment to WDV of block of assets in the
Schedule DPM (Depreciation on plant and
machinery). As the same is redundant for
tax year 2020-21, since the adjustment
was entitled to taxpayers opting for 22%
CTR in previous tax year 2019-20 only, the
ITR Forms notified for tax year 2020-21,
delete the said line item in Schedule DPM.
Comments
Swift notification of ITR Forms by CBDT, just before the
commencement of the tax filing season for relevant tax
year of 2020-21 reflects the commitment of the
Government to improve service to taxpayers and
provide the taxpayer with sufficient time for filing
respective ITRs.
The new ITR Forms majorly cover modifications which
are consequential to the various amendments made in
the provisions of the ITL.
While notifying new ITR forms for tax year 2020-21,
the CBDT has not expanded the reporting requirement
to a great extent. This is a welcome move by the CBDT.
Infact certain reporting requirements have been
eliminated or mellowed down, such as detailed
computation of profits and gains arising from life
insurance business and the requirement to provide
bifurcation of normal losses and pass through losses
carry forward have been deleted. Further, the ITR
Forms have been fine tuned to remove the reporting
requirements consequent to redundant provisions.
Considering that there is no major additional reporting
obligation imposed on the taxpayer, it will provide ease
to the taxpayers for furnishing the tax returns for tax
year 2020-21 in the continuing unprecedented times
caused due to COVID-19 pandemic.
It may be imperative to note that there are certain
amendments made in the ITR Forms which may require
the support of instructions, clarifications or e-utility of
the CBDT, such as in ITR-1 Sahaj, taxpayers are
required to provide quarterly breakup of dividend
income which is reported under the head of “Income
from Other Sources”. The notified ITR-1 merely
mentions this requirement as an instruction, but no
separate disclosure requirement has been explicitly
made in the form for such quarter wise break up.
The present Notification specifies that the amendments
made vide the Notification shall be effective from 1
April 2021.

8. Annexure 1
Applicability of ITR forms to various category of taxpayers
Form Category of taxpayers Applicability/ sources of income covered
ITR-1
(Sahaj)
Individuals (resident and
ordinarily resident)
Who can file ITR-1
• Has income from salaries or family pension, or
• Income from one house property, or
• Income from other sources
Who cannot file ITR-1
• Who has an asset or signing authority in any account
outside India or earns income from any source outside
India, or
• Who has claimed double taxation avoidance agreement
(DTAA) relief and/or unilateral double tax relief, or
• Has agricultural income above INR5,000, or
• Has total income above INR5M, or
• Has dividend income exceeding INR1M attracting super
rich dividend tax levy, or
• Has unexplained credits or investment taxable at 60%
under the provisions of the ITL, or
• Has capital gains or business income, or
• Income from more than one house property or has
brought forward loss or loss to be carried forward
under the house property head, or
• Income from lotteries or horse races or loss under the
other sources head, or
• Who has claimed deduction of expenses under income
from other sources head. However, person who has
claimed deduction under other sources head against
family pension income can file ITR-1, or
• Who is director in any company, or
• Who held any unlisted equity share at any time during
the tax year, or
• Who is assessable for income on which tax has been
deducted in another taxpayer’s name, or
• In whose case a 2% withholding tax has been deducted
on cash withdrawals exceeding INR 10M (reduced to
INR 2M in certain case) made during a tax year, or
• In whose case tax deduction/payment has been
deferred in respect perquisite income accrued due to
ESOPs allotted/ transferred by employer, being an
eligible start-up.
ITR-2 Individuals and HUFs • Has income from salaries, or
• Income from house property, or
• Capital gains, or
• Income from other sources
ITR-3 Individuals and HUFs • Has income from business or profession
ITR-4
Sugam
Individuals and HUFs who are
resident and ordinarily resident,
firms [other than limited liability
When to file ITR-4 Sugam

9. Form Category of taxpayers Applicability/ sources of income covered
partnerships (LLPs)] which are
resident
• In case of profits and gains from business and
profession to which presumptive tax provisions apply
(except in following cases)
Who cannot file ITR-4 Sugam
• Who has an asset or signing authority in any account
outside India or has income from any source outside
India, or
• Who is a director in any company
• Who held any unlisted equity share at any time during
the tax year
• Has total income above INR 5M, or
• Income from more than one house property or
• Has brought forward loss or loss to be carried forward
under any head of income, or
• Who is assessable for income on which tax has been
deducted in another taxpayer’s name, or
• Who has claimed DTAA relief and/or unilateral double
tax relief, or
• Has agricultural income above INR 5,000 or
• Has dividend income exceeding INR 1M attracting
super rich dividend tax levy, or
• Has unexplained credits or investment taxable at 60%
under the provisions of the ITL, or
• In whose case tax deduction/payment has been
deferred in respect perquisite income accrued due to
ESOPs allotted/ transferred by employer, being an
eligible start-up.
ITR-5 For firms/ LLPs/Association of
Persons (AOPs)/ business
trusts/investment funds
• Income from house property
• Capital gains
• Profits and gains from business and profession
• Income from other sources
ITR-6 Companies other than those filing
ITR-7
• Income from house property
• Capital gains
• Profits and gains from business and profession
• Income from other sources
ITR-7 Persons to furnish return of
income in circumstances
specifically provided for under
the ITL viz., charitable trusts and
other institutions, political
parties, etc.
• Income from house property
• Capital gains
• Profits and gains from business and profession
• Income from other sources

10. Our offices
Ahmedabad
22nd Floor, B Wing, Privilon,
Ambli BRT Road, Behind Iskcon Temple,
Off SG Highway,
Ahmedabad - 380 015
Tel: + 91 79 6608 3800
Bengaluru
6th, 12th & 13th floor
“UB City”, Canberra Block
No.24 Vittal Mallya Road
Bengaluru - 560 001
Tel: + 91 80 6727 5000
Ground Floor, ‘A’ wing
Divyasree Chambers
# 11, O’Shaughnessy Road
Langford Gardens
Bengaluru - 560 025
Tel: + 91 80 6727 5000
Chandigarh
Elante offices, Unit No. B-613 & 614
6th Floor, Plot No- 178-178A,
Industrial & Business Park, Phase-I,
Chandigarh - 160002
Tel: + 91 172 671 7800
Chennai
Tidel Park, 6th & 7th Floor
A Block, No.4, Rajiv Gandhi Salai
Taramani, Chennai - 600 113
Tel: + 91 44 6654 8100
Delhi NCR
Golf View Corporate Tower B
Sector 42, Sector Road
Gurgaon - 122 002
Tel: + 91 124 443 4000
3rd & 6th Floor, Worldmark-1
IGI Airport Hospitality District
Aerocity, New Delhi - 110 037
Tel: + 91 11 4731 8000
4th & 5th Floor, Plot No 2B
Tower 2, Sector 126
NOIDA - 201 304
Gautam Budh Nagar, U.P.
Tel: + 91 120 671 7000
Hyderabad
THE SKYVIEW 10
18th Floor, "Zone A"
Survey No 83/1, Raidurgam
Hyderabad – 500032
Tel: + 91 40 6736 2000
Jamshedpur
1st Floor, Shantiniketan Building
Holding No. 1, SB Shop Area
Bistupur, Jamshedpur – 831 001
Tel: + 91 657 663 1000
Kochi
9th Floor, ABAD Nucleus
NH-49, Maradu PO
Kochi - 682 304
Tel: + 91 484 433 4000
Kolkata
22 Camac Street
3rd Floor, Block ‘C’
Kolkata - 700 016
Tel: + 91 33 6615 3400
Mumbai
14th Floor, The Ruby
29 Senapati Bapat Marg
Dadar (W), Mumbai - 400 028
Tel: + 91 22 6192 0000
5th Floor, Block B-2
Nirlon Knowledge Park
Off. Western Express Highway
Goregaon (E)
Mumbai - 400 063
Tel: + 91 22 6192 0000
Pune
C-401, 4th floor
Panchshil Tech Park
Yerwada
(Near Don Bosco School)
Pune - 411 006
Tel: + 91 20 4912 6000
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