Indore: I-T focuses on salary break-up to trace tax evasion

Indore: The income tax department has made it mandatory for salaried class people to mention salary break-up in their income tax returns. The exercise is aimed to know whether allowances and perquisites are taxable and whether the tax has been paid if they are taxable. Similarly, businessmen will be required to furnish the information in ITR-3 and 4.

Central Board of Direct Taxes (CBDT) has simplified Income Tax Returns (ITRs) for the different categories of people that include individuals, HUF and business class of taxpayers for assessment year 2018-19. Though CBDT has reiterated that this one-page ITR has been further simplified, the tax consultants said it has been made more complex. All the seven ITRs are to be filed online. However, certain categories of taxpayers have been exempted from this.

At present, the individual tax payers have to mention the consolidated income in the ITR. But in the new ITR forms notified for assessment year 2018-19, salaried taxpayers will be required to disclose their salary break-up. The taxpayers will have to give details about allowances that are not exempt, value of perquisites, profit in lieu of salary and deductions claimed under Section 16.

According to department, ITR-1 or Sahaj form will be filed by salaried taxpayers having an income up to Rs 50 lakh and a house. On failing to doing so, the employees and employers will be liable to face notice from income tax department under Section 48 of Income Tax Act, 1962.

The department has made mandatory for small businesses to report their goods and services tax identification number (GSTIN) and turnover reported under GST. Last year, the department had made it mandatory to disclose cash deposits made immediately after demonetisation.

Version Sahaj form is complex. CBDT has made it mandatory provision of mentioning break-up of salary and turnover for individuals and business class tax payers just to check that there is any allowance or component of turnover, which is taxable and whether the tax has been paid. On failing to do so, employees and employers will face penalty.

-CA Swapnil Jain, joint secretary, Tax Practitioners Association.

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