Taxpayers can heave a sigh of relief. The Finance Ministry has decided to introduce a simpler income-tax returns form for assessment year 2007-08, in place of last years Form 2F which left many annoyed as it sought details of personal expenditure.
We have decided to withdraw the cash flow statement after receiving various representations from public and Standing Committee, finance minister P Chidambaram said while announcing the launch of the new forms. The Parliamentary Standing Committee on finance had hit hard at form 2F, terming it cumbersome and lengthy and asked the government to stick to the previous form, Saral.
Mr Chidambaram, however said, the one page form Saral was not very friendly to taxpayers and calling it saral was euphemism as it had to be accompanied with number of annexures. However, he said individual assessees would have to report transaction, which are captured in Annual Information Return. For example, sale or purchase of house above Rs 30 lakh is reported under AIR by registrars. Now, in the new form, which has a separate column for stating these transactions, any individual who has bought or sold a house over Rs 30 lakh, will have to mention it in his income-tax return.
This would help the income-tax department in matching the transaction captured under AIR with tax payers income tax return. The new series of forms would be in ITR series. The ITR 1 and 2 would replace the return forms for individuals like Form 2, 2D, 2 F and 16AA. The ITR3 would replace Form 3, ITR4 would replace Form 2, ITR5 would replace From2, ITR6 would replace Form 1, ITR7 would replace Form 3A and ITR8 would replace 3B.
Mr Chidambaram said the new forms would be annexure less and amenable to e-filing. Only return form ITR 7 which is for charitable and political organisation will have annexures. The government would also seek comments from Institute of Chartered Accountants of India before notifying them on May 14.