Filing Income tax returns is a tedious task and to top that CBDT had released new income tax forms. If anything, the government is focusing a lot more on transparency and so are the latest forms. Changes are being introduced every year to capture as much information possible about the taxpayers, be it individuals, companies or other assesses.
Some key changes regarding the new ITR Rules which a common man should be aware of are mentioned below:
• Tax forms now mandate for a detailed break-up of income earned, rather than just gross figures.
• According to the new ITR Forms, ITR-1 aka Sahaj form is meant for salaried individuals as well those earning through House property or other sources. However, ITR-1 restricts the income from salary to INR 50 lacs; it is also meant only for Resident Individuals.
• Non-residents can file their returns through ITR-2 or ITR-3 and seek a refund in a foreign bank account by providing the relevant details.
• Unlike AY 2017-18, forms for AY 2018-19 do not require an individual to furnish details of cash deposited during a specific period.
• To avoid tax evasion and reconcile the details provided by an assessee registered under GST, business owners now need to furnish their GST numbers and the amount of turnover in the returns filed.
• Earlier, a partner could file his return using ITR-2 which does not hold any relevance post the rollout of new forms. A taxpayer having profits and gains from business or profession now needs to use ITR-3.
• Capital gain arising on transfer of unquoted shares makes it mandatory for the investors to obtain a valuation report through a certified Valuation expert.
• Though it’s a welcome change still incomprehensible, the new ITRs have done away with the gender column.
• For a taxpayer opting for presumptive taxation scheme u/s 44AD, 44ADA or 44AE, Return of Income can be filed in form ITR 4. Previous ITR 4 sought limited of the business, a) total creditors, (b) total debtors, (c) total stock-in-trade and (d) cash balance, while the new ITR 4 form seeks details of 14 financial particulars of business including amount of fixed assets, loans - secured/unsecured, advances, capital account, etc.
• It is not mandatory to send a signed ITR-V or Acknowledgement copy to CPC Bengaluru for verification. It can now be e-verified by generating an Electronic Verification Code (‘EVC’) through net banking, bank account number, Demat Account or Aadhar number.
This is not an exhaustive list, as the changes in ITR form further extend to the taxation of Employee Stock Option Plans, earnings from capital gains and revised penalties on late filing of ITRs.