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Have You Filed Your Income Tax Return? Key Changes To Know This Year

NDTV Profit logo NDTV Profit 31-07-2017

Filing of income tax return (ITR) has changed this year with regard to the forms to be used. The Income Tax Department has prescribed new forms for filing tax returns. Listed below are some major changes in the ITR forms due to which you will have to fill these forms differently this year.

1) Simplified one-page ITR form for salaried class taxpayers

Changes in ITR 1 Sahaj form

Now the government has notified a simplified one-page form, called 'ITR-1 Sahaj', for individuals earning income from salary, pension, one house property and income from other sources. It has removed columns which are not frequently used by the taxpayers.

The new form ITR-1 Sahaj has retained the deductions which are most frequently used by the taxpayers, viz., under Section 80C of the Income Tax Act for investments, 80D for medi-claim insurance premium, 80G for donations made and 80TTA for savings bank account interest.

If a taxpayer wants to claim deduction under any other provision of chapter VI-A, he or she can specify the relevant section in the column titled 'Any other'. Schedules of TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) have been merged into one in order to make the ITR 1 shorter and simpler.

Complete coverage on filing income tax returns (ITR)

New sections in form ITR 2

New columns have been inserted to report using in the ITR 2 form dividend income and long-term capital gains, exempt under the I-T Act.

The ITR 2 will now be applicable to persons having income from salary, more than one house property and capital gains.

2) Disclosure of cash deposits during demonetisation - Forms ITR 1, 2, 3, 4, 5, 6, 7

A new column has been introduced in all ITR forms to report about cash deposited by taxpayers in their bank accounts during the demonetisation period, i.e., from November 9, 2016 to December 30, 2016. However, taxpayers are required to fill up this column only if they have deposited Rs. 2 lakh or more during the demonetisation period.

3) Quoting of Aadhaar number - Forms ITR 1, 2, 3, 4

The Finance Bill, 2017 requires every person to quote Aadhaar number in the return of income. If any person has applied for the Aadhaar card but does not possess the Aadhaar number yet, then he or she can quote the enrolment ID of Aadhaar application form in the ITR.

It may be noted that firms are also required to quote the Aadhaar number of their partners/members in the new ITR 5.

4) Income taxable at special rates - Form ITR 2, 3, 5, 6, 7

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Unexplained income

As per Section 115BBE, any unexplained credit or investment attracts tax at the rate of 60 per cent (plus surcharge and cess, as applicable), irrespective of the slab of income.

Now new columns have been inserted in ITR forms under 'Schedule OS' to report such unexplained income under 'Schedule SI'.

It may be noted that a taxpayer having unexplained income cannot opt for form ITR-1 Sahaj.

Dividend above Rs. 10 lakh

The dividend received from domestic company is taxable at the rate of 10 per cent if the aggregate amount of such dividend exceeds Rs. 10 lakh.

A new column has been inserted in ITR forms to declare such dividend income in Schedule OS. It may be noted that any taxpayer having dividend income above Rs. 10 lakh and covered under Section 115BBDA cannot opt for ITR-1 Sahaj.

5) Deduction under Section 80EE

Forms ITR 2, 3, 4

Section 80EE of the Income Tax Act allows deduction on home loan interest for first-time home buyers. This deduction is over and above the Rs. 2 lakh limit.

A new field has been provided in new ITR forms under Schedule VI-A deductions to claim home loan interest under Section 80EE.

6) Declaration of value of assets and liabilities by individuals/HUF (Hindu Undivided Family) earning above Rs. 50 lakh.

Forms ITR 2, 3, 4

During 2016, the government had introduced a new Schedule requiring individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakh. Taxpayers were required to mention cost of immovable property, jewellery, bullion, vehicles, shares, bank and cash balance etc.

Now taxpayers are also required to disclose the address of immovable property and description of movable assets in new ITR forms. Further, new fields have been introduced in ITR Forms for disclosure of 'Interest held in the assets of a firm or AOP as a partner or member'. Such members/partners are also required to disclose name, address and PAN of the firm or AOP.

7) Registration number of Chartered Accountant firm

Forms ITR 3, 5, 6

Now taxpayers are required to mention the registration number of the firm of Chartered Accountant which has done audit in ITR forms.

8) Bifurcation of receipt/expenses from business and profession

Forms ITR 3, 5

In old ITR forms, there was no option to bifurcate income and expense of business and profession separately. All receipts were to be clubbed together and shown in the ITR. In new ITR forms, there is an option to show receipts from business and profession separately.

9) Segregation of digital receipts and other receipts under presumptive taxation scheme

Form ITR 4

As per the presumptive taxation scheme under Section 44AD, 8 per cent of gross receipts or turnover will be deemed as income of taxpayer. However, in Union Budget 2017, such limit has been proposed to be reduced to 6 per cent for digital receipts of taxpayer.

In the new ITR form, new columns have been inserted to show turnover received through digital mode. Consequently, columns have been inserted to show presumptive income at 6 per cent and 8 per cent.

The Finance Act 2016 had introduced the presumptive taxation scheme for professionals as well. Now, the new ITR 4 form shows an option to avail such presumptive taxation scheme for professionals under Section 44ADA.

10) Details of receipts as mentioned in form 26AS under TDS schedule

Form ITR 4

The form ITR 4, which is now applicable for taxpayers opting for presumptive taxation scheme, has a new column under 'Schedule TDS2' to show the receipts as mentioned in Form 26AS.

(Chetan Chandak, Head of Tax research, H&R Block India)

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.

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