1. Key Changes in ITR for the AY 2019-20 & Compliance Audit – A new path way
CA Virat A Bhavsar

2. From “Saral” to the stage of being “Sahaj”

3. Analysis of total number of pages (ITR) forming part of the compliance
Period (e-filing)
For Ind./HUF having business Income
In case of Corporate Assessee
AY to AY
21 to 23 26 AY 33 AY 30 AY 31 AY 32 34 AY 35 AY 45 AY 40 54

4. Chapter XIV - Procedure for Assessment
Section 277 (False statement in verification etc. )
Section 140 (Verification of the ITR)
Section 139 (Filing of ITR)
FA 2014 amended the scope of section 140 from mere signing to verification wef

5. Section 292B- Return of Income etc
Section 292B- Return of Income etc. not to be invalid on certain grounds
No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.

6. Key Objectives

7. Changes in ITR- Classification
Applicability of ITR- Key Amendments
Additional Disclosures
Changes correspond to amendments in Act
Trust
Residual Changes

8. Applicability of ITR- Key amendments
Electronic filing of ITR in all cases is mandatory except a super senior citizen who is required to file ITR1 or ITR 4.
An Individual who is director in the company or holds any shares of unlisted company at any time during the previous year is not entitled to use ITR-1 and ITR 4.
Whether the disclosure is required if he is director in Foreign Company?
Whether Disclosure is required in case where only share application monies are paid and shares are not allotted?
ITR -4 is not applicable in case of following scenario;
Non-Resident or Not an Ordinarily Resident Individual or HUF or Non Resident Partnership Firm
Ordinarily Resident (I/H/F) if total income is more than 50 lacs
Ordinarily Resident Individual, HUF or Firm which held unlisted shares anytime during the previous year

9. Additional Disclosures

10. Key Changes calling for additional disclosures
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 1
ITR 2,3,5
Investment in Unlisted Companies – To keep the track of issue of shares by the closely held companies to the shareholders
File 1 2
ITR 3,5,6
Schedule P & L seeking more classification - Bifurcation of Profit and Loss statement into “Manufacturing Account” , “Trading Account” and “Profit and Loss Account”. - Service Industry starts filling details in Trading account.
manufacturing account
trading account
P/L account 3
Information about the Debtors in case of Bad Debts claimed is more than Rs. 1 lakh. – Mandatory to disclose Name and Address of the debtor is PAN is not available.
File 2 4
Additional information about the Speculative Activity – Separate schedule requires disclosure of
a. Turnover, b. Gross Profit, c. Expenditures, d. Net Profit
File 3

11. Key Changes calling for additional disclosures
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 5
ITR 3,4,5,6
Reporting of GSTIN & GST Turnover – Last year it was mandated for presumptive scheme of taxation (ITR-4) and from this year it is made applicable to the all types of Assessee.
i.) CBDT designated officials to share information about the Assessee with GSTN
ii.) Sale v Supply – Reconciliation and Adjustment u/s 143(1)(a)
iii.) Reporting of business transactions with registered and unregistered suppliers under GST introduced in ITR 6 last year is now removed.
File 4 6
ITR 3,5,6
Reporting disallowance u/s 14A – Separate reporting under Schedule OI (Other Information)
File 5

12. Key Changes calling for additional disclosures
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 7
ITR 2,3,5,6,7
Disclosure about accrual or receipt of dividend income u/s 115BBDA and section 2(24)(ix)- winning from lottery, cross word etc. – To determine the interest u/s 234C and overcome the potential disputes u/s 143(1)(a)
File 6 8
ITR 2,3,5,6
Additional details of Agriculture Land to be furnished if the net agriculture income exceeds Rs.5 lakh –
Name and district (with PIN Code) where agriculture land is located
Measurement of land in Acre
Whether the land is owner or held as lease
Land is irrigated or rain-fed
File 7 9
ITR 5
Details about the partnership firm in Schedule IF is now made applicable for Partners filing ITR 5 (other than individual and HUF)
File 8

13. Key Changes calling for additional disclosures
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 10
ITR 3,5,6
Separate schedule for reporting presumptive income u/s 44AD/44ADA/44AE in the new ITR forms – Technically those Assessee who are debarred from using ITR-4 now can file respective ITR and offer income under the presumptive scheme.
File 9 11
ITR 3,4,5,6
Mandatory to disclose Business Code, Nature and Descriptions in case of Assessee opting for presumptive taxation.
File 10 12
Gross Receipts through Account Payee Cheques/ drafts or any other mode to be shown separately – This is applicable only in case where the Person is not liable to maintain the Books of account u/s 44AA.
File 11

14. Key Changes calling for additional disclosures
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 13
ITR 2,3
Residential Status – Beside providing details of residential status, the Assessee is required to disclose additional details such as number of days stayed in India, Tax Identification Number and country of his residence
File 12 14
ITR 2,3,5,6,7
Disclosure of Foreign assets- scope expanded
File 13 15
Disclosure of Pass through income to be mentioned in the respective schedules (Schedule OS, Schedule HP and Schedule CG)
File 14 16
ITR 6
Reporting Shareholders details in new Schedule SH-1 and SH-2 (Start-up)- To provide details of allotment of shares vis a vis change in shareholding taken place during the year.
File 15

15. Key Changes calling for additional disclosures
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 17
ITR 6
Reporting of Assets and Liabilities in Schedule AL-1 and AL-2 (Start up)
Fair Valuation
Analysis of each item of asset and liability
Date of purchase and cost thereof
File 16

16. Changes correspond to Amendments

17. Key Changes correspond to Amendments
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 1
ITR 2,3,5,6
Income Taxable u/s 112A - Income from sale of Long Term Capital Asset being equity shares, units of equity oriented MF, or Units of Business Trust chargeable to STT now taxable at concessional rate of 10% u/s 112A.
File 17 2
ITR 6
DDT u/s 115-O on Deemed Dividend u/s 2(22)(e) taxable in the hands of shareholders- Withholding of 30% by the company and disclosure in schedule DDT
File 18 3
ITR 3,5,6
Gain/loss on account of Foreign Exchange Fluctuation as per section 43AA - Computation of gain/loss as per ICDS –VI is allowable as deduction. Reconciliation of overall Gain/loss is mandatory.
File 19 4
Marked to Market losses on unlisted or unquoted securities as per ICDS VIII read with section 40A(13) – Adjustments as per ICDS shall correspond to ITR
File 20

18. Key Changes correspond to Amendments
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 5
ITR 6
Investment in Unlisted Companies – To keep the track of issue of shares by the closely held companies to the shareholders
File 21 6
ITR 2,3,5,6
Full Value of Consideration in case of sale of Land or Building as per 50C – Disclosure of correct facts
File 22 7
Information about the Buyers to be filled in the case of transfer of Immovable Property – Mandatory to quote PAN of the Buyer if the TDS is deducted u/s 194IA or mentioned in registration document.
To mention Percentage of co-owner of property
PAN
Amount
File 23 8
ITR 3,5,6
Deductions u/s 10AA to be claimed from Total Income of the Assessee - To remove the ambiguity , the FA 2017 has clarified the position.
File 24

19. Key Changes correspond to Amendments
Sr no.
Applicable ITR
Description of Change
Schedule of ITR 9
ITR 3,5,6
Reporting of Profit on Conversion of Inventory into Capital Assets under Profit and Loss account – Section 28(via).
File 25 10
ITR 5 ,6
Reporting requirement in case of eligible Start-up as per 80IAC-
Reporting Registration number
Shareholding details in SH-2
Assets and Liabilities in schedule AL-2
File 26

20. Changes in case of Trust

21. Changes in ITR -7 Sr no. Key Change Description of Change
Schedule of ITR 1
Reporting of amount disallowable u/s 40(a)(ia) or 40A(3) or 40A(3A)
Corresponding to the amendment in law, the ITR 7 has made changes to incorporate the disallowances which are not to be treated as application.
File 27 2
Schedule ER (Revenue Application) and EC (Capital Application)
Expenses incurred on the object of the trust needs to be classified into
Establishment and Administrative Expense
Expenses incurred on the objects of the trust
File 28
Application of income from borrowed funds or previous year accumulation – not regarded as application (separate schedule)
File 29 3
Exemption u/s 11(1A) removed from Capital Gain
The Capital Gain exemption as per section 11 is now part of the schedule EC.
File 30 4
Violation of section 13(1)(c)/(d)
Separate disclosure to be made in case of where exemption u/s 11 is denied due to violation of section 13(1)(c) or (d).
File 31

22. Residual Changes in ITR

23. Residual Changes Sr no. Applicable ITR Description of Change
Schedule of ITR 1
ITR 1,2,3,4
Reporting of Salary Income on Gross Basis – The salary income to be synced with the Form 16 - 2
ITR 3
Report Audit Requirement under the other Acts to be mentioned separately – Primary object is contra verification
Residual 1 3
ITR 1 to 7
To provide bifurcation of source of income (Interest) in ITR 1 to 7- For enabling faster processing of ITR and map the gap between 26AS and ITR
Residual 2 4
ITR 1,2,3,4,5,6
Reporting of Donation in Cash u/s 80G- The amount of donation in cash and other mode to be specified in the ITR
Residual 3 5
ITR 4
If total income exceeds 50 lakh, the Assessee cannot opt for ITR 4 – Schedule AL (assets and liability) which is mandatory field in cases where income exceeds 50 lakh is removed from new ITR 4. Corresponding changes in ITR 3,5,6 to incorporate schedule of 44AD/44ADA/44AE

24. Residual Changes Sr no. Applicable ITR Description of Change
Schedule of ITR 6
ITR 2,3,4,5,6,7
Representative Assessee- The New ITR required the Assessee to specify the ‘capacity’ under which the ITR is being filed in representative capacity.
Section 160 defines who can be regarded as Representative Assessee. It includes an agent of a Non-Resident.
Section 163 defines agent of Non Resident.
Residual 4 7
ITR 2,3,5,6,7
Pass through nature of Income is to be reported separately in these ITRs in Schedule OS, Schedule HP and Schedule CG. -

25. Compliance Audit- a new path way

26. Tax efficiency Audit Pre-Transaction Audit Due Diligence
Post – Transaction Audit
Pre-Transaction Audit

27. Scope Overall compliance to the different provisions of the Act
TDS compliance
GST compliance
Reconciliation on real time basis
To check overall e-compliance by the Assessee
Whether the records filed electronically are updated or not ?
Whether the documents/ evidences are kept electronically?
Whether the Assessee has availed all the benefits under the Act?
Tax Efficiency Audit
Due Diligence Report

28. Let’s Connect
In a day when you don’t come across any problem, you can be sure that you are travelling on a wrong path.
Swami Vivekananda