NEW DELHI: A few days ago, the income tax department issued an advisory cautioning the salaried class, professionals and individual tax payers against declaring wrong income details to claim tax exemption. To prevent this practice of misreporting of income, the department has now introduced many changes in the new IT Returns forms for the assessment year 2018-19 and seek more details.
Here is a look at these changes introduced this year in seven ITR forms that are now ready for e-filing.
For ITR-1 or ‘Sahaj’ forms for the salaried class, one has to give a complete break-up of the salary, such as the taxable and non-taxable parts, exact income from dividends, interest, and for home income details, of the rent received, house tax paid to authorities, among others.
Professionals and small businesses such as doctors, lawyers, architects and shop owners, who use ITR-4 form to file tax returns, were required to provide particulars of total debtors, creditors, total stock-in-trade and cash balance. The new ITR-4 form seeks more financial details of the business, such as the amount of secured and unsecured loans, fixed assets and capital account, among others.
For small businesses, providing number of assessees and turnover as filled in GST forms is mandatory, so that details disclosed in the ITR can now be crossed-checked with the GST filing. The purpose is that while salaried class will no more be able to tweak salary components, professionals and small businesses will be forced to keep and maintain transparent account books.
A separate ITR form is kept for NRIs, so that it is easy to track fund transfers, transactions or tax evasions.
Another big change introduced is that the taxpayers now need to give specific details in case of capital gains too. The new ITR forms have specific columns to report each capital gain exemption separately. Details of each capital gains exemption under Sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F need to be reported in its applicable column now. A taxpayer availing these capital gains exemptions needs to mention the date of transfer of original capital asset, which was missing in the earlier ITR forms.
Apart from this, there are more revelations required for employee stock option plans in an unlisted firm. If unlisted shares transferred at a price to an employee is lower than its fair market value (FMV), it would still be taxed at the FMV that a merchant, banker or a chartered accountant calculate. While filing the returns, employees will need to obtain valuation report in case of sale of unlisted shares to ensure that they correctly report the capital gains or loss. The ITR form also asks for the detailed break-up of such transactions.
The income tax department had already reiterated that the penalty is 50 per cent of the tax due for under-reporting of income. It can go up to 200 per cent for misreporting. This penalty is over and above the interest liability, which will be levied as applicable under Section 234B and 234C at one per cent per month.
SALIENT FEATURES
No need of furnishing details of cash deposits made during the note-ban period
Taxpayers aged 80 years and above with income up to Rs 5 lakh can file ITR in paper form
For ITR 2, 3 and 4, mentioning of gender not a requisite
Field to mention aadhaar card number retained in the new forms