Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: list of goods taxed at 4% :: due date for vat payment :: cpt :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: empanelment :: TDS :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARD
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

Irritants in the new income-tax forms
May, 07th 2007
While income-tax isn't new, effective mid-May, we are to have new tax forms, called the ITR series.

"Over the last few years, the taxman has been attempting experiments both in lawmaking and return forms for filing tax returns, but not all changes are workable," says Mr V.K. Subramani, an Erode-based chartered accountant.

ITR-1 is meant for salary earners who have income from salary and interest income. If the salary earner has any other income under the head `other sources' not being interest income, then the return to be used is ITR-2, not ITR-1. Again, if a salary earner has income from salary and loss from `house property' arising due to housing loan interest, the form to be used is ITR-2.

"The new return forms ITR-1, ITR-2 and ITR-3 are predominantly for assessees who do not have to maintain books of account on regular basis. These three forms could have been merged into a single form, as in the past when there was a tax return for non-business assessees," opines Mr Subramani. "Why make subtle differences among non-business personal taxpayers who have very limited scope and reason for tax evasion exercise," he frets.

The return form meant for individuals and HUFs (Hindu undivided families) having income from business or profession is an exhaustive one seeking furnishing of balance sheet and profit and loss account in the assorted format prescribed, notes Mr Subramani. Difficulties may arise, because "the terms used in the format, particularly relating to profit and loss account, may not be easy to adopt or furnish; the head of expenses recorded in the books already may not match exactly with the terms used in the return form."

Similar mismatch is anticipated in the profit and loss account format prescribed in ITR-4 and ITR-5; especially manufacturers who outsource "may not be able to furnish details under the prescribed heads of expenditure for various processes of manufacture." Not only is ambiguity likely in furnishing the required details, but any comparison of such details across time can lead to distorted conclusions, fears Mr Subramani.

A few other points that he mentions are as follows:

  • The law does not seek mandatory maintenance of quantitative details of goods traded or manufactured, but the return form now seeks quantitative details of raw materials consumed and finished goods produced with details of out-turn. Not a happy situation for taxpayers, considering that the form has been announced after the end of the financial year.

  • The return forms seemed to have been designed to facilitate computer scanning of the returns and for unbiased selection of cases for scrutiny. However, mandating adoption of certain accounting terms by the taxpayers for furnishing the return would only show that the new return is an exercise attempting to match two incongruous elements, viz. the accounting terminologies and legal provisions.

  • Seeking the furnishing of PAN (Permanent Account Number) of the auditor in the return form but without countersignature of the auditor may create difficulty as regards its authenticity. In contrast, Tax Return Preparers (TRPs) have to affix their countersignature in the returns filed through them.

    Since the return form prescribed is applicable for only one assessment year, we may expect every year the return form is modified or improved taking into account the practical difficulties, says Mr Subramani. "Any delay in the notification of the form leads to demand for extension of due dates for filing returns by the taxpayers."

    D. Murali

    Home | About Us | Terms and Conditions | Contact Us
    Copyright 2016 CAinINDIA All Right Reserved.
    Designed and Developed by Binarysoft Technologies Pvt. Ltd.
    Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

    Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions