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Will the new Income - Tax return form make your life simple?
May, 17th 2011

There is a lot that tax payers can cheer about. Not only has a more user friendly income tax return  form been introduced, but the time limit for getting an acknowledgement of e-filing of returns for assessment year 10-11 (financial year 09-10) has also been extended till July 31, 2011.

In his budget speech the Finance Minister, Pranab Mukherjee, had indicated that the tax filing process would be made simpler.

True to his word, on April 5, the Central Board of Direct Taxes notified the issue of the tax return forms for financial year 10-11 (assessment year 11-12).

It introduced Sahaj (Income Tax Returns -1), which replaces the erstwhile Saral-II.

Sahaj is a two-page form that, prima facie, seems far more straightforward than its last year's counterpart.

However, Sahaj is restricted to a specific taxpayer group only. These are individuals having income from salary or pension or income from one house property or income from other sources.

In other words, those who earn a living only from salary, pension or interest income may use this form. Even within this group, owning more than one house makes one ineligible.

Some believe that these are unfair conditions. One can save in bank deposits, post office instruments, PPF and even mutual funds or equity.

But if the taxpayer were to earn long-term capital gains (exempt or otherwise) from such mutual fund and/or equity investments, it would make him ineligible to use Sahaj.

Similarly with the second house property - senior citizens or retirees may have over the course of time acquired a second house, the rental income of which is used to augment their pension.

But since having a second house makes one ineligible, this group too will not be able to use Sahaj.

In another significant move that may bring cheer to many if not all taxpayers, the much feared annual information return schedule seems to have been dropped from all forms.

Until last year, it formed a part and parcel of the ITR form. This schedule required a disclosure of transactions such as deposits over Rs. 10 lakh, mutual fund investments or credit card payments of over Rs. 2 lakh, property transactions over Rs. 30 lakh, and purchase of RBI bonds over Rs. 5 lakh and so on.

It was a cause of distress and disgruntlement amongst tax payers and was deemed to be an invasion on the privacy of the taxpayer.

Many people, who otherwise honestly pay up their taxes, even went to the extent of investing an amount slightly lower than the specified limits, just to escape furnishing this information.

Well, for the current tax filing, it looks like this requirement has been dropped altogether.

However, the forms have just been put up on the website and the instructions that normally accompany the forms could not be accessed.

Upon an initial perusal, there was no AIR schedule in the forms. However, there might be a change in this position.

Earlier, filing ITR meant waiting endlessly in long winding queues at the income tax office.

With the advent of technology, all that is history.

Even though returns can be filed electronically today, many are still not familiar with digital filing.

But once, you do so, you will realise that the process is simple and ultimately results in the return getting processed much faster and more efficiently than the physical filing mode.

Logging online, one will need to download the softcopy of the required return form. An XML file needs to be generated and submitted. Maintaining the record of the acknowledgement is important.

In case you are using a digital signature, on generation of "acknowledgement" the return filing process gets completed.

You may take a printout of the acknowledgement for your record.

In case the return is not digitally signed, on successful uploading of e-return, the ITR-V Form would be generated, which needs to be printed by the tax payers.

This is an acknowledgement cum verification form. A duly filled ITR-V form should be mailed to the Income Tax department at Bangalore by ordinary post or speed post only within 120 days after the date of transmitting the data electronically.

Taxpayers need to note that as per an order dated February 10, 2011, the time limit for filing the ITR-V forms (120 days from filing the return as mentioned above) has been extended up to 31 July, 2011.

The stipulation of 120 days meant that for the FY 09-10 (AY 10-11) filing (the last date for which was July, 2010), the ITR-V form had to be submitted before 30 November, 2010.

Now as a final opportunity for those taxpayers who have not yet sent their ITR-V forms, the last date has been extended to July 31, 2011.

Source:http://www.rediff.com/business/slide-show/slide-show-1-will-the-new-it-return-form-make-your-life-simple/20110517.htm

 
 
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