New Income Tax forms: What information is being asked for? All you want to know about the new rules
April, 05th 2017
The announcement of new income tax return (ITR) forms usually marks the start of a new financial year. The finance minister has kept his Budget promise of simplifying these ITR forms. From announcing a new, compact and short ITR-1, the total number of forms has also been brought down to seven from nine earlier. Here are some key issues that an assessee must keep in mind while filing his returns for AY 2017-18. Merging of forms
Old ITR-2, ITR-2A and ITR-3 have been merged into new ITR-2. ITR-2A was applicable for those who owned more than one house but did not have any capital gains. ITR-2 was applicable for those who had capital gains. ITR-3 was applicable for partners in a partnership firm. These three forms have been merged into the new ITR-2. The old ITR-4 has been renamed ITR-3 and the old ITR-4S (Sugam) has been renamed ITR-4 (Sugam). Inclusion of Aadhaar One of the most notable changes has been the inclusion of Aadhaar number in ITR forms. By July 1, 2017, your PAN must be linked with Aadhaar, failing which PAN will be considered invalid.
The other notable change has been inclusion of information seeking cash deposits made of `2 lakh or more, made during the 50-day demonetisation window (November 9 to December 30, 2016). This information has been asked for in all ITR forms including ITR-1. With this, the government has kept up the momentum on its efforts of demonetisation. It is likely the department will be verifying income offered to tax against cash deposits made.
Schedule AL or assets and liabilities was added in tax return forms last year. Those who earn more than `50 lakh in total income a year have to mandatorily provide details of their assets and corresponding liabilities. Non-residents and resident but not ordinarily residents, have to provide details of assets located in India. Schedule AL is now much more detailed. Description (i.e., land, flat, house) and address must be provided for all immovable properties. Besides amounts held in bank deposits, shares and securities, insurance policies, loans and advances given and cash in hand must also be reported. Those who are members of a partnership firm or AOP have to report name of the firm, its PAN and their investment in the firm on cost basis. You might also want to see this:
The department has also provided detailed instructions on the value to be reported. Movable and immovable properties have to be reported at cost price. Where wealth-tax return was filed, and the asset was included in old wealth-tax return, its value should be reported as per last wealth-tax return. Where any improvements have been made, its cost may be increased appropriately. (The last year for filing wealth tax returns was March 31, 2015 and it was abolished after this date).
In case the asset was gifted or received as part of a will or inheritance, the cost of such asset will be the cost of the previous owner. This cost can be increased by the cost of any improvements made. Where the previous cost is not ascertainable and no wealth-tax return was filed, its value can be taken at the circle rate or bullion rate, on the date of acquisition by the taxpayer or value or on March 31, 2017.