For the purpose of filing the income tax returns for FY 17-18, the Income Tax Department has issued seven types of ITR forms for different classes of taxpayers.
The new ITR forms shift the onus on the taxpayers to prove their claim for deductions, expenses or exemptions. These seek more information from trusts, taxpayers who opted for presumptive taxation scheme, investors in shares of unlisted companies, etc. Following are the details.
ITR-1 is the simplest form to be filed by an individual taxpayer who earns income from salary/pension, income from one house property and income from other sources. The total annual taxable income should not exceed Rs 50 lakh and it should not include any income from betting, gambling, etc. Unlike last year, the new ITR-1 requires detailed calculation of income from salary and from house property, which was restricted to single figure till last year. Additional fields for TDS as per Form 26QC deducted on rent and quoting of PAN of the tenant for such rent has also been provided. ITR-1 has been withdrawn for NRIs. Now onwards, ITR-2 or ITR-3 is applicable to them.
A person of this category who files income tax return for the first time would not be subjected to any scrutiny in the first year unless there is specific information available with the department. Good! This will surely attract many, otherwise hesitant, to enter the tax net.
ITR-2 is applicable for individuals and HUFs having income other than income from ‘Profits and Gains from Business or Profession’.
ITR-3 is for individuals and HUFs having ‘Income from Profits and Gains from Business or Profession’. An individual or an HUF, who is a partner in a firm, shall be required to file Form ITR-3 only and not ITR-2.
A field relating to Sec. 115H has been added relating to benefits availed under continuation of special provisions u/s 115C to 115I related with NRIs who have returned to India permanently.
ITR-4 is the form for taxpayers who opt for presumptive taxation scheme u/ss 44AD, 44ADA or 44AE, ITR-4. The old ITR-4 sought only four financial particulars of the business related with i) total creditors, ii) total debtors, iii) total stock-in-trade and iv) cash balance. The new ITR-4 seeks as many as 14 additional details such as amount of secured/unsecured loans, advances, fixed assets, capital account, etc.
It also requires the taxpayer to provide the aggregate turnover as per his GST Returns so as to end the wrong practice of reporting different turnovers in erstwhile sales tax and income tax returns.
ITR-5: For persons other than individual, HUF, company and persons filing ITR-7.
ITR-6: For companies other than those claiming exemption u/s 11.
ITR-7: For persons including companies required to furnished return u/ss 139 4A, 4B, 4C, 4D, 4E or 4F (Charitable & religious Organisations)
ITR-V: To be used by all taxpayers. This is the acknowledgment form to be submitted also with your returns. Where the ITR is transmitted electronically without digital signature you have to post ITR_V separately to CPC at Bengaluru within 120 days. Where the ITR is filed physically, you have to submit ITR-V along with the relevant ITR. Your returns will not be considered as filed unless the signed ITR-V reaches the CPC.
The department has started linking Aadhaar card with PAN card, thereby eliminating the procedure of sending ITR-V to the Centralised Processing Unit in Bangalore. All these forms except ITR-7 have been designed as annexure-less to make them amenable for electronic filing.
- The new ITR Forms require the reporting of each capital gain exemption separately u/ss 54, 54B, 54EC, 54EE, 54F, 54GB and 115F. Further, the date of transfer of original capital asset is required to be mentioned.
- In the case of capital gain arising on transfer of unquoted shares, it would now be mandatory for the investors to obtain the Fair Market Value report as determined by a Merchant Banker or CA.
- These new ITR forms require to report CGST, SGST, IGST and UTGST paid by, or refunded to the assessee.
- Requirement of furnishing details of cash deposit for specified period has been done away with from FY 17-18.
- Gender of the taxpayer (male or female or transgender) is not required to be mentioned in the forms.
- All the tax returns have to be filed electronically. However, a Very Senior Citizen requiring to file ITR-1 or ITR-4 can file paper returns, if he or she so desires.
Finally, until last year, if a taxpayer failed to file the ITR before end of the AY, penalty u/s 271F could be imposed only after initiating the penalty proceedings. After omission of this penalty provision by the FA17, late fee is levied u/s 234F along with interest u/ss 234A, 234B and 234C before filing the ITR. Take care of this.
A N Shanbhag may be contacted at email@example.com