The Central Board of Direct Taxes (CBDT) has notified the new income tax returns (ITR) form for financial year 2012-13, with changes targeting wealth taxes evaders.
Contrary to the belief that declaring domestic assets will be extended to all individual taxpayers, CBDT has extended this to businessmen, professionals and partners at partnership firms and capped the income at Rs 25 lakh.
All those falling in the category will need to give details of assets like land, art / antique pieces, jeweller, bank accounts, shares and so on. The details about such investments will include value of assets among other things.
To get more information about those owning foreign accounts and to catch those who haven't reported these, CBDT has asked for the value of peak account balance in rupee terms. “Say on March 25, a taxpayer had $5,000 in a bank account in the US. On March 29, he transferred the money to some other account in order to hide the income and got it back in his account on April 2.
Earlier, such details were not needed. Now, such taxpayers will have to show the peak amount held in the account in a year, converted in rupee terms based on that day's (on the day of peak balance) exchange rate,” explains Kaushik Mukherjee, ED (tax & regulatory practices), PricewaterhouseCoopers. The account number should also be specified as against only the name of the overseas account holder, country name and address earlier.
Last year, the government had mandated those earning Rs 10 lakh and more to file e-returns. This year, the income threshold has been brought down to Rs 5 lakh for filing taxes online.
Says Vaibha Sankla of H&R Block, a tax consultancy firm, “There is a new head introduced within ITR 2 asking for additional details from those asking for relief under Section 90 or Section 91. These details would be name of the country where the taxpayer has paid tax, relevant Double Taxation Avoidance Agreement (DTAA) clause under which the relief is being asked / tax was paid and so on. Such taxpayers, that is only those claiming exemption under Section 90 or Section 91, will now need to file returns via ITR 2 in place of ITR 1.”
Under Section 90 one gets relief for paying taxes in the country that is in DTAA with India, while Section 91 relieves those who paid tax in a country that does no have DTAA with India. A resident Indian's worldwide income is taxable in India but if such an individual pays taxes in some other country he/she can get relief by showing the tax credit statement from that country.
Those who have incurred a loss on sale of house property will also need to file returns through ITR 2 in place of ITR 1. This is largely because ITR 2 asks for more details like, in this case, details of co-owner of the house (name, PAN, stake held).
Those who hold trusts abroad also need to give all details of the same with their tax returns.
Lastly, there is slight change brought about in the refund section of ITR, where in those claiming a refund need to give their banks IFSC code and not just MICR one, like till now. It has been seen that many times the refunds have gone to a wrong account when transferred online with the help of MICR code, say experts.