New/ Revised Income-tax return (ITR) forms for Assessment Year 2019-20 have been notified on 1st April 2019, followed with release of Excel/ Java Utility and Instructions to support filing of the respective returns. However, there are some issues/ queries which have been raised by the stakeholders, in respect of reporting of certain details while filling up the ITR forms, like reporting of directorship in a foreign company, reporting of equity shares listed outside India, unlisted shares which were previously listed, reporting of unlisted shares received by way of gift, will, amalgamation etc. and reporting of certain assets held as stock-in-trade, etc.
Accordingly, the CBDT has issued 3 sets of Clarifications in respect of Frequently asked Questions (FAQs) on Filling Up of new Income Tax Return (ITR) forms applicable for FY 2018-19/ AY 2019-20, as under:
Clarifications/ FAQs on Filling Up New ITR forms (FY 2018-19/ AY 2019-20): CBDT Circular No. 26/2019 dt. 26 Sept. 2019
1. The Income-tax Return (ITR) forms for the Assessment Year (A.Y.) 2019-20 were notified vide notification bearing G.S.R. 279(E) dated the 1st day of April, 2019. Subsequently, instructions for filing ITR forms were issued and the software utility for e-filing of all the ITR forms was also released. After notification of the ITR forms, various queries were raised by the stakeholders in respect of filling-up of the ITR forms. The queries were examined in the Board and clarifications were issued to address the concerns raised therein, vide Circular No. 18 of 2019 dated 08.082019 and Circular No 21 of 2019 dated 27.08.2019.
2. Subsequently, further representations have been received on certain issues relating to filing of Forms ITR-5, ITR-6 and ITR-7. Accordingly, following clarifications are issued in continuation to the aforementioned Board Circulars.
Questions 1: In the Form ITR-6, an unlisted company, other than a start-up, is required to furnish details of shareholding in Schedule SH-1. In a case where shares have been acquired by way of transfer, please clarify how the columns on “Date of allotment”, “Issue price” and “Amount received” should be filled up?
Answer: In case shares have been acquired by the shareholder by way of transfer, and not by way of allotment made by the company, the details of shareholding should be entered in the respective columns of the Table in Schedule SH-1, as under‑
(i) Name of Shareholder:- Enter name of the person holding shares as on end of the previous year (current shareholder).
(ii) Date of allotment:- Enter date on which shares were transferred to the current shareholder as per companies register.
(iii) Face value per share:- Enter the face value per share at which the shares had been originally allotted by the company.
(iv) Issue price per share:- Enter the price at which shares were issued by the company to the original shareholder to whom the company had allotted the shares.
(v) Amount received:- Enter the total amount received by the company from the original shareholder to whom the allotment of shares had been made, upto the end of the previous year.
In case of start-ups, the details of shareholding are required to be furnished in Schedule SH-2. In cases where shares of a start-up company have been acquired by the shareholder by way of transfer, the details of shareholding should be entered in the respective column of the table in Schedule SH-2, as under‑
(i) Name of Shareholder:- Enter name of the person holding shares as on end of the previous year (current shareholder).
(ii) Date of allotment:- Enter date on which shares were transferred to the current shareholder as per companies register.
(iii) Face value per share:- Enter the face value per share at which the shares had been originally allotted by the company.
(iv) Issue price per share:- Enter the price at which shares were issued by the company to the original shareholder to whom the company had allotted the shares.
(v) Paid up value per share:- Enter the amount received by the company for each share, from the original shareholder to whom the allotment of shares had been made, upto the end of the previous year.
(vi) Share premium:- Enter the amount of premium per share at which shares were allotted by the company to the original shareholder.
Question 2: Please clarify whether it is mandatory to mention PAN number of shareholder in Schedule SH-1. In a case where shareholder is resident of a foreign country having no PAN, or in case where PAN of shareholder is not available for other practical reasons, it is not possible to fill up PAN of all shareholders in the Schedule SH-1.
Answer: PAN of shareholder should be furnished in Schedule SH-1, if available. However, in case the shareholder is a non-resident, having no PAN, a default value can be entered in place of PAN such as “NORES9999N”. Similarly, in case PAN of the shareholder is not available due to any other reason, a default value can be entered in place of PAN such as “NOAVL9999N”.
Question 3: An unlisted company registered under section 8 of Companies Act 2013 or Section 25 of the Companies Act 1956 does not have share capital. In such case, how the details required in Schedule SH-1 are required to be filled up?
Answer: In the departmental utility of ITR-6, at the beginning of Schedule SH-1, the taxpayer is required to answer the question- “Are you a company registered under Section 8 of Companies Act 2013 or Section 25 of Companies Act 1956?”. In case the taxpayer selects “Yes” in the drop down provided against the question, the details in Schedule SH-1 are not required to be filled up.
Question 4: An unlisted company, other than a start-up, is required to furnish details of assets and liabilities in Schedule AL-1, which is mandatory. A start-up is required to furnish details of assets and liabilities in Schedule AL-2. In a case where the unlisted company/ start-up does not hold any of the assets specified therein as at the end of the previous year, please clarify how the details in Schedule AL-1/ Schedule AL-2 should be filled up?
Answer: In the departmental utility of ITR-6, at the beginning of Schedule AL-1/ Schedule AL-2, the taxpayer is required to answer the question- “Do you have assets and liabilities as at the end of the year as mentioned in Schedule AL-1/ Schedule AL-2?”. In case the taxpayer selects “No” in the drop-down provided against the question, the details in Schedule AL-1/ Schedule AL-2 are not required to be filled up. In case the taxpayer selects “Yes” in the drop-down provided against the question, it is mandatory to furnish the requisite details in at least one of the Tables given in Schedule AL-1/ Schedule AL-2.
Question 5: An AOP/ BOI is chargeable to tax at slab rate. However, while filing return of income in ITR-5, the departmental utility is charging tax at maximum marginal rate?
Answer: In Part A (General) of the ITR-5, the particulars of members of the AOP/ BOI are required to be furnished alongwith their respective shares. In case these particulars are not provided, or incorrectly provided (e.g. total of shares of the members does not add up to 100%), the tax is being charged at maximum marginal rate.
Question 6: I am a private trust and am trying to file return of income in Form ITR-2. However, I am unable to file ITR-2 for A.Y. 2019-20?
Answer: As per rule 12 of the Income-tax Rules, only individuals and HUFs, not having any income under the head business or profession, are eligible to file ITR-2. A private trust is required to furnish return of income in ITR-5.
Question 7: An investment fund or a business trust is required to file return of income in ITR-5. Please clarify how their income should be shown in Schedule SI etc.?
Answer: An investment fund claiming exemption under section 10(23FB) or 10(23FBA) or a business trust claiming exemption under section 10(23FC) or 10(23FCA) have to enter the amount of exempt income directly in column 12(b) or column 12(c), respectively, of the Part B-TI (computation of income) in the ITR-5. Such entities are not required to fill up the head wise details in Schedule BP, Schedule HP, Schedule CG, Schedule OS, and Schedule SI etc.
Question 8: I am a trust registered under section 12A/ 12AA filing return of income in ITR-7. The amount received as corpus donation should be treated as exempt. However the departmental utility is including this amount as part of total income?
Answer: In Part A (General), in the table “Details of registration or approval under the Income-tax Act”, please enter ‘section 12A/ 12AA’ under the column “section under which registered or approved”. Further, in the column on filing status, please choose “section 11” in the drop-down provided against the field “please specify the section under which the exemption is claimed”. If these details are furnished correctly in Part A (General), the amount of corpus donation would not be included in total income.
Question 9: I am a trust/ society/ company claiming exemption under section 10 or section 13A or section 13B and filing return of income in ITR-7. However the departmental utility is charging tax even on the amount shown as exempt income?
Answer: The claim of exemption under section 10 or section 13A or section 13B by such entities should be entered directly in the relevant column of the Part B-TI (computation of income) in ITR-7. The income and expenditure statement should be furnished in the applicable Schedule, i.e. Schedule 1E-1 or 1E-2 or 1E-3 or 1E-4. Such entities are not required to fill up the head wise details in Schedule BP, Schedule HP, Schedule CG, Schedule OS, and Schedule SI etc.
Clarifications/ FAQs on Filling Up New ITR forms (FY 2018-19/ AY 2019-20): CBDT Circular No. 21/2019 dt. 27 Aug. 2019
1. The Income-tax Return (ITR) forms for the Assessment Year (A.Y.) 2019-20 were notified vide notification bearing G.S.R. 279(E) dated the 1st day of April, 2019. Subsequently, instructions for filing ITR forms were issued and the software utility for e-filing of all the ITR forms were also released. After notification of the ITR forms, various queries were raised by the stakeholders in respect of filling-up of the ITR forms. The queries were examined in the Board and a clarification was issued vide Circular No. 18 of 2019 dated 08.08.2019 to address the concerns raised.
2. Subsequently, further representations have been received on certain issues relating to filing of ITR Forms. Accordingly, following clarifications are issued in partial modification of Circular No. 18 of 2019.
3. In ITR Form-2 and ITR Form-3, in Part-A General, at column (h), the taxpayer is required to state whether he was Director in a company at any time during the previous year. In case of an affirmative answer, the taxpayer is further required to disclose following information relating to each company in which he was a Director:-
(a) Name of Company; (b) PAN; (c) Whether its shares are listed or unlisted; (d) Director Identification Number (DIN)
3.2 Representation has been received stating that non-residents are required to pay tax only in respect of income received in India or income accruing or arising in India. Non residents are not required to disclose their assets outside India. Therefore, non-residents should not be required to disclose details of directorship in foreign companies. The disclosure requirement in ITR forms should be limited only to assets and incomes which have a nexus with India.
3.3 In this regard, it is stated that the disclosure requirement in ITR forms in respect of directorship in a company is meant only for the purpose of reporting. The details entered in this column are, in general, not relevant for computation of total income or tax liability of the assessee. As such, the requirement to disclose directorship in a foreign company by a non-resident taxpayer, does not tantamount to disclosure of any foreign source income or foreign asset held by such taxpayer.
3.4 However, to allay the apprehensions in the minds of non-resident taxpayers, it is hereby clarified that a non-resident shall not be required to disclose details of his directorship in a foreign company, which does not have any income received in India, or accruing or arising in India. In other words, a non-resident taxpayer who is Director only in a foreign company, which does not have any income received in India, or accruing or arising in India, should answer the relevant question in the negative, whereupon he would not be required to disclose details of such foreign company. It is further clarified that a non-resident taxpayer, who is Director in a domestic company and also in a foreign company, which does not have any income received in India, or accruing or arising in India, should answer the relevant question in the affirmative, and provide details of directorship in the domestic company only. It is also clarified that a resident taxpayer would continue to be required to disclose details of his directorship in any company, including foreign company, in the relevant column.
4. Further, in ITR Form-2, ITR Form-3, ITR Form-5, ITR Form-6 and ITR Form-7, in Part-B-TTI, before the verification part, a taxpayer, who is resident in India, is required to state whether he had any time during the previous year:‑
(a) held, as beneficial owner, beneficiary or otherwise, any asset (including financial interest in any entity) located outside India; or
(b) had signing authority in any account located outside India; or (c) had income from any source outside India?
In case of an affirmative answer, the taxpayer is required to fill up the Schedule FA. In Schedule FA, the taxpayer is required to disclose the details of foreign assets etc. held at any time during the relevant accounting period.
4.1 Representation has been received citing example of cases where the foreign assets have been acquired after the end of “relevant accounting period” (in foreign jurisdiction) but before the end of “previous year” (in India). In such cases, the taxpayer would have to answer the question in Part-B-TTI in the affirmative, and consequently, would be required to fill up the details of foreign assets etc. in Schedule FA. Since the assets were acquired after the end of relevant accounting period, no amounts would be required to be reported in Schedule FA. However, if the taxpayer reports Nil amount in all tables of Schedule FA, the ITR form does not get validated.
4.2 In this regard, it is hereby clarified that a taxpayer shall be required to answer the relevant question in the affirmative, only if he has held the foreign assets etc. at any time during the “previous year” (in India) as also at any time during the “relevant accounting period” (in the foreign tax jurisdiction), and fill up Schedule FA accordingly.
Question 1: I am a non-resident. The Taxpayer Identification Number (TIN) is not allotted in my jurisdiction of residence. How do I report the same in the column on “residential status”?
Answer: In case TIN has not been allotted in the jurisdiction of residence, the passport number should be mentioned instead of TIN. Name of the country in which the passport was issued should be mentioned in the column “jurisdiction of residence”.
Question 2: I am a director in a foreign company which does not have PAN. How do I report the same against the column “Whether you were Director in a company at any time during the previous year?”
Answer: You should choose “foreign company” in the drop-down provided for “type of company”. In such case, PAN is not mandatory. However, PAN should be mentioned, if such foreign company has been allotted a PAN.
Question 3: Whether an individual who is a non-resident, or resident but not ordinary resident (RoNR) is also required to disclose details of his directorship in a foreign company which does not have any income accruing or arising in India?
Answer: Yes.
Question 4: I have held shares of a company during the previous year, which are listed in a recognized stock exchange outside India. Whether I am required to report the requisite details against the column “Whether you have held unlisted equity shares at any time during the previous year?”
Answer: No.
Question 5: I have held equity shares of a company which were previously listed in a recognised stock exchange, but delisted subsequently, and became unlisted. How do I report PAN of company in the column “whether you have held unlisted equity shares at any time during the previous year”?
Answer: In such cases, PAN of the company may be furnished if it is available. In case PAN of delisted company cannot be obtained, you may enter a default value in place of PAN, as “NNNNN0000N”.
Question 6: In case unlisted equity shares are acquired or transferred by way of gift, will, amalgamation, merger, demerger, or bonus issue etc., how to report the “cost of acquisition” and “sale consideration” in the relevant column?
Answer: You may enter zero or the appropriate value against “cost of acquisition” or “sale consideration” in such cases. Please note that the details of unlisted equity shares held during the year are required only for the purpose of reporting. The quantitative details entered in this column are not relevant for the purpose of computation of total income or tax liability.
Question 7: I hold shares in an unlisted foreign company which has been duly reported in the Schedule FA. Whether I am required to report the same again in the column “Whether you have held unlisted equity shares at any time during the previous year?”
Answer: Yes.
Question 8: I have held unlisted equity shares as stock-in-trade of business during the previous year. Whether I have to report the same in the column “Whether you have held unlisted equity shares at any time during the previous year?”
Answer: Yes.
Question 9: Please clarify whether holding of equity shares of a Co-operative Bank or Credit Societies, which are unlisted, are required to be reported?
Answer: The details of equity shareholding in any entity which is registered under the Companies Act, and is not listed on any recognised stock exchange, is only required to be reported.
Question 10: I have sold land and building to a non-resident. Whether I need to report the PAN of buyer in the table A1/B1 in Schedule CG?
Answer: As mentioned in ITR form, quoting of PAN of buyer is mandatory only if tax is deducted under section 194-IA or is mentioned in the documents.
Question 11: I am resident and have sold land and building situated outside India. Whether I need to report the details of property and identity of buyer in Schedule CG?
Answer: The details of property and name of buyer should invariably be mentioned. However, quoting of PAN of buyer is mandatory only if tax is deducted under section 194-IA or is mentioned in the documents.
Question 12: Whether it is mandatory to provide ISIN details and scrip-wise computation of Long Term Capital Gains (LTCG) arising on sale of Shares/Mutual Funds units on which STT has been paid?
Answer: The tools for computation of LTCG under sections 112A and 115AD have been provided in the departmental utility for the convenience of taxpayers. These are optional tools designed for computation of the final figures of LTCG, which is then populated in the respective items in Schedule CG. Alternatively, the taxpayers can themselves compute the aggregate long term gain or loss manually, and input the same directly in the respective items in Schedule CG.
Question 13: An unlisted company is required to furnish details of assets and liabilities in the Schedule AL-1 of ITR-6? Please clarify whether details of assets held as stock-in-trade of business are also required to be reported therein.
Answer: In case jewellery/motor vehicle etc. is held as stock-in-trade of business, the drop-down value “stock-in-trade” should be selected against the field “purpose for which used”, while filling up details in the relevant table (table „I‟ or table „H‟). In such cases, only the aggregate values are required to be filled up, and the particular details of each asset held as stock-in-trade is not required to be reported.
Question 14: I hold foreign assets during the previous year which have been duly reported in the Schedule FA. Whether I am required to report such foreign asset again in the Schedule AL (if applicable)?
Answer: Yes.
Question 15: An unlisted company is required to furnish details of shareholding as at the end of previous year in the Schedule SH-1 of ITR-6. Please clarify whether these details are required to be furnished in case of an unlisted foreign company.
Answer: Not required.
Question 16: An unlisted company is required to furnish details of assets and liabilities in the Schedule AL-1 of ITR-6. Please clarify whether these details are required to be furnished in case of an unlisted foreign company.
Answer: Not required.
Question 17: Please clarify whether a farmer producer company as defined in section 581A of Companies Act, 1956 is required to furnish details of shareholding in the Schedule SH-1 of ITR6?
Answer: No. However, please ensure to tick the option „Yes‟ against the item “whether the company is a producer company as defined in section 581A of Companies Act, 1956?” in Part-A General.
Question 18: A company is required to disclose break-up of all payments and receipts during the year, in foreign currency, as per Schedule FD of ITR-6 (if it is not required to get the accounts audited u/s 44AB). Please clarify whether only the receipts/payments related to business operations in India are required to be reported in Schedule FD?
Answer: Yes. In Schedule FD, the break-up of receipts and payments in foreign currency is required to be reported only in respect of business operations in India.
Question 19: In schedule TDS, one is required to enter the head under which corresponding receipt has been offered. In some cases, TDS is deducted by the payer in current year, but corresponding income is to be offered in future years. How to fill up Schedule TDS in such cases?
Answer: In such cases, no TDS credit should be claimed under the column “in own hands” for the current year. If this is done, the column “Corresponding receipt offered” is greyed-off and is not required to be filled up.
While I fill up ITR 3, representative assessee’s column remains green without turning in to blue even after ticking no and says chose in the drop down. So validation is not possible. Please help me on how to proceed.