In a major relief to salaried and other individual taxpayers, the Finance Minister, Mr P. Chidambaram said that the Government has decided to drop the proposed requirement of attaching a cash flow statement in their income-tax returns for financial year 2006-07.
It has in turn come up with a new series of eight tax return forms for various categories of assesses, including the salaried class, for assessment year 2007-08 (financial year 2006-07).
These forms, to be described as ITR-1 to ITR-8, have been designed as annexure-less returns (except ITR-7 for charitable trusts and political parties) to make them compatible for electronic filing. The forms are to be notified on May 14.
For individuals, there are now four types of forms applicable to those with salary and interest income only; those with income from any source except from business or profession; partners in firms and not having proprietory business or profession and those having proprietory business or profession.
For the salaried class, there are two options 2-page back-to-back return or a 3-page return. He also said that individuals would now be required to furnish information about high-value transactions that get reflected in annual information returns of third parties. The other four forms are for income and fringe benefit tax returns for firms, companies, charitable trusts and a standalone form for fringe benefit tax in respect of persons not liable to file income-tax return but liable to file return of fringe benefits.