Mumbai: It’s that time of the year when the entire country starts talking about filing income tax returns (ITR). This time as well, the tax department has made a few changes in ITR forms.“Changes have been made to standardise the declaration of income to facilitate auto-processing of returns and detect the tax evasion therein through systematic matching," said Sudhir Kaushik, co-founder and CFO, Taxspanner.com. The income tax department has issued seven types of ITR forms. There are a number of reasons for changes in the form. “There are a few changes where tax laws have been amended to give benefit to low income groups like rebate from tax under section 87A and higher deduction on interest income for senior citizens under section 80TTB. And, there are a few changes where the tax has been introduced — long-term capital gain on listed equity shares and details of foreign income," he added.
Here are a few changes you need to know in the two most popular forms, ITR 1 and ITR 2:
Unlike last year, from this year all individuals (apart from super senior citizens—individuals above the age of 80 years) need to compulsorily file their ITRS electronically. You can’t file it in paper form.
Most changes have been in ITR Form 2 and one important change has been made in ITR 1. “Now this form (ITR1) cannot be used by a resident individual who is either a director in a company or having investments in unlisted equity shares of a company even if she has income below ₹50 lakh. This is because the CBDT (Central Board of Direct Taxes) requires additional details," said Gopal Bohra, partner, NA Shah Associates LLP.
The change in the new ITR Form 2 is on disclosure of the company in which you are a director. “Here the taxpayer is required to disclose the name of the company, PAN of the company and director’s identification number. Also, you need to disclose investments in unlisted equity shares such as name of the company, opening number of shares, cost, details of shares acquired and sold during the year and closing number of shares and cost," Bohra said.
If you have sold a property (immovable property or capital assets) in FY 2018-19, while filing ITR 2, you need to provide complete details of the buyer. Reporting of salary details has now become easier in ITR-1 as it has been synchronised with Form-16. Remember that form 16 has two parts— 16-A and 16-B. “A few of these (changes) are tricky where tax filers can make a mistake due to ignorance or evading tax in earlier years. Now form 16 part B is also standardised," said Kaushik.
The new ITR Form 2 requires individuals to disclose the clause of section 6(1) of the Income-tax Act, 1961 under which the residential status of an individual is determined. “The non-resident individuals are required to mention the country of residence and the taxpayer identification number of such country. In case of a citizen of India or Person of Indian Origin, total period of stay in India during the FY 2018-19 and in preceding four financial years needs to be mentioned," said Borah. This is to check if the taxpayer has rightly determined his residential status. Income from other sources head in ITR-1 has been updated to provide details of the source.
Keep these changes in law in mind as well, while filing the relevant form, if these changes are applicable to you.
No comments:
Post a Comment