With the new financial year came the new rules to file income tax returns!
After announcing sea of changes in the last fiscal, it is now time to implement them. The process to file tax return has been started from April 1 and many taxpayers are already looking for the documents.
Before you start your here is a look of changes which have come into effect in the new financial year. Speaking with Zeebiz, Chetan Chandak, Head of Tax Research, H&R Block India shared the changes you need to keep in mind while filing the income tax.
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Aadhaar must for filing ITR & applying for PAN
Now every person will be asked to quote his Aadhaar details while filing taxes starting July 1st. Aadhaar will be mandatory for PAN applications as well. Existing PAN holders will be asked to link their PAN with their Aadhaar before a date to be notified. If any person does not possess the Aadhaar Number but he had applied for the Aadhaar card then he can quote Enrolment ID of Aadhaar application Form in the ITR.
Simplified tax return
This is a significant step taken by the government to simplify tax filing for a large portion of taxpayers. In the next Assessment Year, salaried taxpayers with income up to Rs. 50 lakh & rental income from one house property only can use this simplified form to file their Income Tax Return.
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Cash Deposits during Demonetisation
The taxpayers are now required to provide the details of aggregate cash deposited in excess of Rs. 2 lakh into all their bank accounts (including loan account/ credit card account) in the new ITR forms.
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Income taxable at special rates
Unexplained income: As per Section 115BBE any unexplained credit or investment attracts tax at 60% (plus surcharge and cess, as applicable), irrespective of the slab of income. Now new columns have been inserted in ITR Forms 2, 3, 5, 6, 7 under 'Schedule OS' to report such unexplained income under 'Schedule SI'. It may be noted that any taxpayer having unexplained income cannot opt for ITR-1 Sahaj.
Dividend above Rs 10 lakhs
As per Section 115BBDA the dividend received from domestic company is taxable at rate of 10% if aggregate amount of such dividend exceeds Rs.10 lakh for the year. New column has been inserted in ITR Forms to declare such dividend income in 'Schedule OS'. It may be noted that any taxpayer having dividend income above Rs 10 lakhs and covered under Section 115BBDA cannot opt for 'ITR-1 Sahaj'.
Deduction under section 80EE
Section 80EE allows deduction on home loan interest for first time home buyers. This deduction is over and above the Rs 2 lakhs limit covered under Section 24(b). A new field has been provided in new ITR Form 2, 3, 4 under Schedule VI-A deductions to claim home loan interest under Section 80EE.
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Declaration of value of assets and liabilities by Individuals/HUF earning above Rs 50 lakhs
During 2016, the Govt. had introduced new Schedule requiring individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs. Taxpayers were required to mention cost of immovable property, jewellery, bullion, vehicles, shares, bank and cash balance, etc.
Now tax payers are also required to discloseaddress of immovable property and description of movable assets in new ITR Forms. Further, new fields have been introduced in ITR Forms for disclosure of 'Interest held in the assets of a firm or AOP as a partner or member'. Such members/partners are also required to disclose name, address, PAN of the firm or AOP.
Details of receipts as mentioned in Form 26AS under TDS schedule
ITR 4 which is now applicable for taxpayer opting for presumptive taxation scheme has a new column under the 'Schedule TDS2' to show the receipts as mentioned in Form 26AS.
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Segregation of digital receipts and other receipts under presumptive taxation scheme
As per the presumptive taxation scheme under Section 44AD, 8% of gross receipts or turnover will be deemed as income of the taxpayer. However, in 2017 Union Budget such limit has been proposed to be reduced to 6% for digital receipts of taxpayer.
In new ITR form, new columns have been inserted to show turnover received through digital mode. Consequently, columns have been inserted to show presumptive income at 6% and 8%.
The Finance Act 2016, had introduced the presumptive taxation scheme for professionals as well. Now new ITR 4 Form shows an option to avail such presumptive taxation scheme for professionals under Section 44ADA.