The Central Board of Direct Taxes (CBDT) has notified the income tax return (ITR) form for the assessment year 2020-21. The new form comprises savings benefits for individuals, professionals, business units, and Hindu undivided families (HUF) for the investment made between April 1 and June 30.
CBDT released new ITR 6 for Assessment Year 2020-21 on October 22, 2020.
The ITR-6 Form for Income Tax Return filing with the Income Tax department of India is meant for only those companies that are not claiming exemption under section 11 i.e. Income from property held for charitable or religious purposes.
The taxpayers including individuals, Hindu Undivided Family (HUF), Firm, Association of Person (AOP), Body of Individuals (BOI), Local Authority and Artificial Judicial Person; Companies that claim an exemption under section 11; and a Company required to file return of income in ITR-7 are not liable to file ITR-6 Form.
This ITR Form can be filed with the Income-tax Department electronically on the e-filing web portal of Income-tax Department i.e. www.incometaxindiaefiling.gov.in and verified by using a digital signature only.
In case the Company is required to furnish a report of audit under Sections 10AA, 44AB, 44DA, 50B, 80-IA, 80-IB, 80-IC, 80-ID, 80JJAA, 80LA, 92E, 115JB or 115JC of the Income Tax Act, the Company shall file such report electronically at least one month before the due date of filing the return of income.
The Income Tax Return Form 6 consists of two parts Part A and Part B along with multiple schedules that capture various income and tax aspects of the business using ITR 6 to file income tax returns. There are some of the key sub-sections of ITR Form 6 Part A.
The General Section of ITR Form 6 Part A will have to be filled out with basic details of the income tax assessee such as Name, PAN, Complete Address, Corporate Identity Number (CIN), Date of Incorporation, etc.
Some additional company details that may have to be provided, if applicable include Holding Status, Key Holders, Business Organisation, Shareholder Formation, etc.
The Balance Sheet or Part A, BS is to be filled out with details of the balance sheet of the company as on 31stMarch of the applicable financial year or amalgamation of the company. Some of the key details to be provided in this section include shareholder’s fund, share application money pending allotment, non-current liabilities, current liabilities, assets and more.
The sub-section Manufacturing Account of ITR-6 Part A has to be filled out with details related to opening inventory, closing stock and cost of goods produced, which together comprise the manufacturing account information of the company.
The Trading Account subsection needs to be filled out with details of debits and credits occurring in the company’s trading account during the applicable financial year.
P&L has to be filled out with details featured in the company’s Profit and Loss Account as of the end the applicable financial year. This section will contain various details of the company’s Profit and Loss account including details of credits and debits to the P&L Account as well as details of provisioning made by the company.
The Schedule HP of ITR 6 contains details of the income from house property that the tax assessee is required to fill out. Key details included in this section includes Rent Received; Unrealised rental amount; Tax paid to local authorities for property, etc.
This schedule also mentions details of the co-owners of the property along with their respective PAN in case assessee co-owns the property whose details are provided in this schedule.
The ITR form 6 Schedule CG contains fields that feature details of Capital Gains applicable to the financial year. The details in this section will include short term capital gains and long term capital gains from key sources such as sale of land/building, stamp sale, equity mutual funds, shares, etc.
Schedule OS of ITR 6 quantifies details of income obtained from sources other than house property, capital gains, business income, etc. Some key information disclosed in Schedule OS of ITR 6 include details of the income namely Dividends; Interest from bank/post office deposits, savings account, income tax refund, etc; Rental income from machinery, plant, etc; Cash credits; Pass-through income, etc.
ITR Form 6 Part B is a comparatively shorter section of the ITR Form 6 that is featured towards the end of the tax return form. Key components of ITR 6 Part B are Income from house property; Profits/gains from business or profession; Capital Gains; Income from other sources; Various deductions, etc.
The various key changes which are noticed in ITR 6 for Assessment Year 2020-21.
Firstly, a new option is added in the ‘Filing Status’ section with regard to exercising of option under section 115BAA/115BAB introduced by Option needs to be exercised in Form 10-IC/10-ID.
Secondly, from sale of equity share in a company or unit of equity oriented fund or unit of a business trust on which STT is paid under section 112A’ is inserted and notified in this year’s ITR to report individual scrip wise details on long term shares which was earlier exempt from tax and eligible for grandfathering. Earlier, this was introduced in the later version e-filing utility for AY 2019-20, but made optional.
Thirdly, for NON-RESIDENTS – From sale of equity share in a company or unit of equity oriented fund or unit of a business trust on which STT is paid under section 112A’ is inserted.
Fourthly, if the taxpayer has made any investment/ deposit/ payments between 01.04.2020 to 30.06.2020, then he has to fill Schedule DI.
Fifthly, in preceding AY 2019-20, only one bank account was allowed to be selected for refund credit.
In AY 2020-21, multiple bank accounts are allowed to be selected for getting the refund credit. In case multiple accounts are selected for refund credit, then refund will be credited to one of the accounts decided by CPC after processing the return.
Lately, a new ‘Schedule DI – Details of Investment’ is added to report investment/expenditure made between April 1, 2020 to June 30, 2020.