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Filing ITR not so Sahaj anymore

Author: Kumar Shankar Roy/Wednesday, April 25, 2018/Categories: Tax, Expert View

Filing ITR not so Sahaj anymore

In a few weeks from now, the salaried class will have to start submitting annual income-tax returns. So, it is important for you to know the many changes that have been introduced in the income-tax return forms. The Central Board of Direct Taxes this month announced new Income Tax return (ITR) forms for the assessment year 2018-19. It is clear that the tax-man wants to know more details about your income. It is now strongly believed that even salaried taxpayers should take professional help in filling up the ITR form. A small mistake could result in unnecessary headaches. So, use the services of websites and outsourcing agencies with extreme caution. Let us understand some changes in ITR forms carefully.

Break-up of salary

Many assessees with income from salary use the most basic one-page ITR-1, or as it is called the 'Sahaj' form. The form now seeks additional details of salary. The taxpayer first needs to input the salary amount excluding allowances, perquisites. He/she will then have to provide details pertaining to perquisites, allowances, ‘profit in lieu of salary’, etc. Do remember that up to the assessment year 2017-18, an assessee was only required to mention just the taxable figure of salary.

Income from house property

The new ITR-1 Sahaj form is seeking details about income from property such as gross rent received, tax paid to local authorities and income chargeable under the head house property. Clearly, the taxman now wants the taxpayer to provide the break-up of these amounts. This change is in sync with the recent initiatives of the tax department to match as many figures of an ITR form as possible from other data sources.

Specific details of capital gains

The taxpayers will now need to give specific details in case of capital gains as well. The new ITR forms have specified columns for this. So now you have to report each capital gain exemption separately. Details of each capital gains exemption sought by you under Sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F have to be reported in its applicable column. Also, do remember that a taxpayer availing any capital gains exemption must clearly mention the date of transfer of the original capital asset; this information was missing in earlier ITR forms.

ITR 4 seeks more disclosures

There is presumptive taxation scheme, which is meant for small businesses such as freelancers and shop owners and for professionals such as doctors. Such taxpayers did not need to maintain books of accounts or get their financials audited. But the new ITR-4 asks for more financial details of the business such as fixed assets, the amount of secured and unsecured loans, advances, capital account etc. Earlier, only four details were asked for. The new details sought essentially make it virtually critical for the taxpayer to maintain balance sheet and report the information.

GST details in income tax now

A business owner in the new regime needs to provide GST number, and the amount of turnover based on the GST return filed. It is a well-known fact that previously business owners reported a different turnover for income tax and other indirect taxes, in a bid to evade taxes. Now, the GST details being given will open the window of disclosing the details in ITR with the GST filing. If numbers don't match, it can lead to difficulties. 

The author is a personal finance journalist with over 13 years of experience

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