The Income Tax Department has decided to change some Income Tax Act 1961 rules that will have an impact on taxpayers filing returns for AY2020-21. According to the new income tax rules, if a person holds joint property with their spouse or pays more than Rs 1 lakh electricity bill or has spent Rs 2 lakh or more on overseas travel, they won’t be able to file ITR-1 form for showing these expenses from now on.
Till 2019, those who had less than Rs 50 lakh income and had a joint property with their spouse, were required to file ITR-1. From now onwards, if an earning individual with an income up to Rs 50 lakh income has a joint property with a spouse, then a separate ITR form will have to be filed – depending on their income.
If they have business income then they will have to file ITR-2 form while those not having any business income will have to file ITR-3 form. Also, an earning individual who has paid Rs 1 lakh or more in a financial year won’t be able to file ITR-1 from now.
As per the revised rules, those who have spent Rs 2 lakh or more on foreign travel will have to file other than ITR-1 form from 2020 or AY2020-21. According to experts, the reason for such a change in ITR-1 form-related income tax rules is that generally there is no scrutiny of the ITR-1 form.
The Government asking earning individuals to mention their spending on the joint property, electricity bill and foreign travel in other ITR forms will mean that now there is a possibility of scrutiny of such expenses by an earning individual in the coming times. The move is aimed at curbing tax evasion.
(With inputs from timesnownews)