The new income-tax return forms came into effect from Tuesday. The government has notified the simplified forms for 2007-08.
The new form for the individual taxpayer is simpler and she will not be required to give a statement on expenditure as envisaged earlier in form 2F that had evoked criticism for seeking a cash-flow statement detailing taxpayers expenditure. The new form does not have annexures and the taxpayer will not be required to file any additional papers or certificates.
However, in a move expected to improve tax compliance, the income-tax department had made it mandatory for individual assessees to report transactions captured in annual information return (AIR). For example, sale or purchase of real estate above Rs 30 lakh is reporterd under AIR by registrars. The new form has a separate column for stating the transactions like sale or purchase of a house over Rs 30 lakh.
This would help the income-tax department in matching the transaction captured under AIR with the taxpayers income-tax return, feel income-tax officials.
Similarly, the income-tax return forms for other taxpayers such as corporates, professionals and charitable organisations have also been simplified. Form ITR 7 meant for charitable and political organisation will have annexures. The new forms were unveiled by finance minister P Chidambaram on April 28.