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Filing income tax return? Heres what has changed in the new ITR forms for AY2018-19
August, 07th 2018

If you are one of those who have still not filed their tax return or are still wondering which ITR form to use or what has changed in the new forms, here's help.

The due date for filing income tax return for Financial Year 2017-18 – for certain category of taxpayers – has been extended till August 31 this year. By this time many of you must have filed your tax return. However, if you are one of those who have still not filed their tax return or are still wondering which form to use or what has changed in the new forms, here’s all you need to know about the new ITR forms.

It may be noted that the Central Board of Direct Taxes (CBDT) had some time back notified the new ITR (Income Tax Return) forms for Assessment Year 2018-19 or Financial Year 2017-18. These new ITR forms – ITR-1 Sahaj, ITR-2, ITR-3, ITR-4 Sugam, ITR-5, ITR-6 and ITR-7 – incorporate the requirements as per the amendments made by the Finance Act, 2017.

For example, for FY2017-18, CBDT has notified a one-page simplified income tax return (ITR) Form-1 (Sahaj). Any individual, who is resident other than not ordinarily resident, and has income up to Rs 50 lakh from salary, 1 house property or other income (like interest, etc), can file Form-1. Parts relating to salary and house property have been rationalised in this new form, while providing the basic details of one’s salary (as per Form 16) and income from house property has been mandated.

Also See: Income Tax Return filing for previous years: How many years can tax returns be filed for?

Similarly, CBDT has also rationalised the ITR Form-2, which can be filed by individuals & HUFs who have income under any head other than business or profession, while those having income under the head Business or Profession have to file either Form-3 or Form-4.

Tax experts say that many changes have been introduced in the new income tax return forms for FY2017-18 or AY2018-19. For example, the requirement of giving details of cash deposited for a given period as required in the ITR Forms for FY2016-17 has now been done away with. However, NRIs are now required to furnish details of any one foreign bank account, for the purpose of credit of refund.

Also See: Implications for delay, non-filing of ITR for individual taxpayers

“The changes are mainly directed towards extracting more details of the transactions from taxpayers, with an objective to minimize tax evasion. This is also evident as the ITR forms now seek GST details of the businesses. Earlier people used to mention contradicting details in the ITR forms and GST forms. But now with the GST details mandatory in ITR, there will be minimal tax evasion. These changes are aimed at promoting transparency and providing further clarity,” says CA Karan Batra, Founder & CEO of CharteredClub.com.

Here are the new requirements in the ITR forms for AY 2018-19:

ITR Form

Changes applicable from AY 2018-19

ITR- 1

Provide break-up details of salary

Not applicable for Non-Residents and Resident but Not Ordinary Resident

More details on Income from House Property

Not applicable for individuals who have profits and gains from any business or profession.

ITR- 2

Applicable for non-residents

Removal of ‘Gender’ from personal information

ITR- 3

Now applicable for individuals who have profits and gains from any business or profession.
Removal of ‘Gender’ from personal information
Replaced the depreciation column of 50/60/80/100 percent with 40% for Plant & Machinery and Building
ITR- 4

Requires more disclosure than mentioned in law. Need to disclose the amount of secured and unsecured loans, advances, fixed assets, capital account and so on.

Businesses will have to disclose income from property.

Removal of ‘Gender’ from personal information

ITR- 5

Replaced the depreciation column of 50/60/80/100 percent with 40% for Plant & Machinery and Building

ITR- 6

Disclose all GST related details such as transactions in exempt goods or services, transactions with composite suppliers, transactions with registered entities and total sum paid to them and even those with unregistered entities.

Details of all beneficial owners who are holding 10% or more voting power (directly or indirectly) at any time during the year 2017-18. These companies are required to provide the name, address, percentage of shares held and PAN of the beneficial owners.

Replaced the depreciation column of 50/60/80/100 percent with 40% for Plant & Machinery and Building

ITR- 7

Disclose following additional information: a) Aggregate annual receipts of the projects/institutions; b) Date of registration or approval granted to the trust; c) Amount utilized during the year for the stated objects out of surplus sum accumulated during earlier year. (Details about the name & annual receipts of institutes covered u/s 10(23C)(iiiab), (iiiac), (iiiad) & (iiiae) has been removed).

New ITR-7 requires to furnish A) Date of change in objects, B) Application for fresh registration has been made within stipulated time period, C) Fresh registration has been granted, D) Date of such fresh registration.

General

Report each capital gain exemption specifically and mention the date of transfer of original capital asset

Penalty on non-filing of returns- Filed after 31st July (now after August 31st) but before 31st Dec 2018, Rs 5000; and Rs 10000 thereafter.

Non-Residents can take a refund in a foreign bank account by providing details of one bank account.

Business Owners now need to provide GST details.

If unlisted shares are transferred at a price which is lower than its fair market value (FMV), it would still be taxed at the FMV that a merchant banker or a chartered accountant calculates. While filing the return, employees will need to obtain valuation report in case of sale of unlisted shares to ensure that they correctly report the capital gains or loss. The ITR form also asks for the detailed break-up of such transaction.

Firms are required to quote Aadhaar number of their partners or members. Similarly, in case of a trust, Aadhaar number of related functionaries have to be mentioned.

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