A day after notifying the new income tax return form with significant changes like reporting foreign travels...
A day after notifying the new income tax return form with significant changes like reporting foreign travels and details of all bank accounts, a top finance ministry official on Saturday said that the new form will be reviewed and revised.
Revenue secretary Shaktikanta Das told The Sunday Express that the new income tax return (ITR) will be reviewed and simplified as many taxpayers have raised concerns.
“The finance minister spoke to me from Washington. The matter was discussed and it was decided that this (ITR) will be reviewed and simplified,” he said. Official sources said the additional disclosures sought in the ITR was on the recommendations of the special investigation team (SIT) formed by the Supreme Court last year. The SIT had suggested greater disclosure to track taxable income overseas and in India to curb the generation of black money.
However, the new forms —ITR1, ITR2 and ITR4S — notified by the central board of direct taxes (CBDT), have drawn widespread criticism for the enhanced compliance cost and burden.
Amit Maheshwari, managing partner of Ashok Maheshwary & Associates, said, “The new forms increase the compliance burden and are complicated. They will also increase the compliance cost. Therefore the government has rightly decided to review it”. Sources said that while some of the disclosures may be deferred, “other disclosures will be targeted for certain taxpayers while others will be exempted from it”.
The main criticism, Maheshwari said, was on the reporting requirement of foreign travels, utilisation of capital gains schemes and benefits taken by the taxpayers on account of double taxation avoidance agreement (DTAA).
With regards to the foreign travel, the assessee will have to report passport number, the issuance place of the passport, countries visited, number of times such journeys made and in case of a resident taxpayer, the expenses incurred from own sources in relation to such travel.
Assesses will have to mandatorily produce tax residency certificate (TRC) also, hitherto required only when asked by the assessing officer.
They will also have to furnish the number of bank accounts along with the account number, address, IFSC code and any possible joint account holder.
A taxpayer has to fill ITR 1 if she is earning income from salary or pension, own no more than one house and have other sources income such as interest. However, if the assesse owns many houses or her earnings include capital gains and other sources including winnings from lottery and horse-racing, she has to fill ITR2. ITR4S is filled by individuals and Hindu Undivided Families who earn their income through professional work while fulfilling all the criteria of ITR1.
As such, to curb the generation of black money, the government has also introduced the Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, to tackle the menace of concealment of income and assets located abroad and evasion of tax on them.
These have been prosecutable offence with rigorous imprisonment up to 10 years.
* A taxpayer has to fill ITR 1 if she is earning income from salary or pension, own no more than one house and have other sources income such as interest
* However, if the assesse owns many houses or her earnings include capital gains and other sources including winnings from lottery and horse-racing, she has to fill ITR2.