The deadline to file your tax returns is just round the corner. By July 31, 2017, all individuals need to file income tax returns for FY 2016-17. As the deadline approaches, individuals rush to get the last pieces of the puzzle in place. Empirical data suggest that it is from now till July 31, 2017, that the biggest volume of return is going to be filed and hence, this is the appropriate time to pen down a few of the new requirements relevant for income-tax returns this year.
Introduction of simplified single page ITR1 (SAHAJ) form to be used by individuals having income from salary, pension, one house property and income from other sources aggregating to total income up toRs 5,000,000. This move aims to help tax payers with ease of filing.
The number of ITR forms have been reduced from the existing nine to seven now. Earlier forms ITR-2, ITR-2A and ITR-3 have been merged and a combined revised ITR-2 has been notified. Consequently, erstwhile ITR-4 and ITR-4S have been renumbered as ITR-3 and ITR-4 (SUGAM) respectively.
Mentioning Aadhaar Number or the 28-digit enrolment ID in ITR 1, 2 3 and 4 has been made mandatory effective July 1, 2017. However, individuals who are not citizens of India, non-residents as per Income Tax Act, people living in the states of Assam, Meghalaya and Jammu & Kashmir and super senior citizens of age 80 years or more are exempted from this requirement. It is important to note that persons requiring to quote Aadhaar would likely not be able to file the income-tax return without Aadhaar.
It is also required to report the cash deposits during the demonetisation period (i.e., November 9 to December 30, 2016) if the aggregate of deposit is equal to or more thanRs 2,00,000. For calculating the aggregated deposits, any cash deposited in any account including loan accounts needs to be taken into consideration.
Individuals who have sold immovable property have to mention PAN of the buyer of property.
A new section has been incorporated in ITR1 for mentioning exempt long-term capital gains and thereby individuals having exempt capital gains can file ITR1.
The scope of reporting of assets and liabilities as on March 31, 2017 in India has been enlarged. Now taxpayers are also required to include details of financial assets (e.g. shares, securities, etc.), description and address of immovable property and interest in firm/AOP as a partner/member.
Turnover via digital mode
In continuation of the thrust to digitalisation and to give effect to amendment in presumptive taxation, new columns have been inserted in ITR4 to disclose turnover received through digital mode (on which presumptive income is deemed to be 6%) and normal mode (on which presumptive income is deemed to be 8%).
Option of filing paper return is only available for ITR1 and ITR4 to super senior citizens or individuals with income belowRs 5,00,000 and not having any refund claim.
Non-residents taxpayers not having any bank account in India, would now have to report details of their foreign bank accounts.
If one analyses the new requirements, it can be concluded that though the entire gamut of rationalisation is a drive towards simplification and digitisation, the focus is also on data gathering.
This would assist tax authorities to evaluate data gathered through various new disclosure requirements, thereby helping them in verifying compliance status. It is, thus recommended that taxpayers take note of the new requirements and comply with these disclosure requirements and maintain proper documentation/proof so that the same can be provided to the tax authorities, in case they are called for.
The writer, Dinesh Agarwal is tax partner, EY India. Inputs from Milesh Kumar, senior tax professional, EY. Views expressed are personal.