All You Need To Know About the New Income Tax Return Forms

Driven by the goal to fight tax evasion and to get more Indian tax payers to file their tax returns honestly, the government has introduced several changes in this year’s Income Tax Return (ITR) forms.

The new ITR forms, released by the Central Board of Direct Taxes (CBDT) for the FY 2017-18 earlier in April, focus on collecting as much information as possible about the taxpayer so that the government can process tax returns more efficiently.  

With July end being the deadline for filing taxes, let us take a closer look at the main changes.

Which all are the new forms?

The new forms are Sahaj (ITR -1), ITR - 2, ITR - 3, Sugam (ITR - 4), ITR - 5, ITR - 6, ITR -7 and ITR-V for the assessment year 2018-19.

1. The ITR - 1 form is for residents with income up to Rs 50 lakh and are salaried professionals.

1. The ITR - 2 form is for NRIs, Residents Not ordinarily resident (RNORs) as well as individuals with income from sources other than business or profession.

1. The ITR - 3 form is for individuals and HUFs (Hindu Undivided Families) who have income from business or profession.

2. The ITR - 4 is for those who have presumptive income from business or profession.

Also, please note that if a return is not filed within the due date, then a late fine shall be levied as below under Section 234F:

1. Rs 5,000 if the return is filed after the due date but before December 31 of the assessment year [Rs 1,000 if total income is up to Rs 5 lakhs].

1. Rs 10,000, in any other case.

What are changes in the revised forms?

1. Changes in the ITR Form-1: ITR-1 is now applicable only for Indian residents and salaried persons. They will have to furnish breakup of the salary that earlier used to appear in form 16. Income from house property needs to be categorized and there is an additional field under the schedule on TDS with provision for mentioning PAN of the tenant.

2. Changes for Non-Resident Indians (NRIs): ITR-2 now deals with Non-Resident Indians (NRIs) and Residents Not ordinarily resident (RNORs). Earlier, they would use only Sahaj forms to file their returns. It is also to be filed by individuals and HUFs ((Hindu Undivided Families) with income from profits and gains from business or profession.

1. ITR Form-2 Rationalization for HUFs: This form is to be filed by individuals and HUFs (Hindu Undivided Families) who have income under any head other than business or profession.

1. ITR Form-4 (GST registration): This form has an additional field for GSTR No. Tax-payers, who have presumptive income from business or profession. They will have to furnish their GST registration number and turnover. Fields have been added to financial particulars such as partners/members capital, secured loan, unsecured loan, advances and fixed asset.

1. Removal of Cash deposits post demonetization: Tax payers need not furnish details of cash deposit. This provision was added post demonetization, but this has been removed in this assessment year.

1. Tax on Capital Gain: Details of capital gain exemption under Sections 54, 54B, 54EC, 54EE, 54F, 54 GB and 115 F must be reported in specific columns and tax payers must mention date of transfer of original capital asset. In case of transfer of unquoted shares, investors must obtain valuation report.

Also, now tax payers who are filing ITR 2, 3 or 4, are not required to mention the gender.

Overall, there is no change in the manner of filing your returns. All returns will be filed electronically except ITR-1 or ITR-4 who can go ahead filing a paper return. However, filing of returns is not an easy task and tax payers must give utmost importance to file their returns.