Earlier when taxpayers filed ITR forms, their TDS was the only figure displayed automatically and one had to feed in the income and other details manually. But income tax department is looking to display it automatically.

Finding it difficult to fill your income tax returns (ITR) form? Automation seems to be the answer. The process of filing your income tax returns may become a lot easier in near future as the income tax department is planning to introduce pre-filled forms, Sushil Chandra, chairman of Central Board of Direct Taxes (CBDT) had said earlier this month. “Earlier when taxpayers filed their ITR forms, their tax deducted at source (TDS) was the only figure that was displayed automatically and one had to feed in the income and other details manually. But with this change, income tax department is looking to display it automatically,” said Rajat Mohan, chartered accountant and partner at AMRG & Associates, a Delhi-based chartered accounts firm. This move is to keep a check on tax evaders, he said.

Mohan explains this with the help of an example. Say if the TDS displayed is ?1 lakh and the actual income corresponding to that TDS is ?10 lakh; taxpayers may show lesser income, which will lower their tax liability. This tax liability will be lesser than the ?1 lakh that was displayed, after which the taxpayer will wrongly claim refund.

“Such cases happen with salaried and business taxpayers,” said Mohan. After it becomes automated, if a taxpayer wants to reduce or increase the automatically displayed income on the screen, they will have to provide proper justification and proof for the same, he added.

Another major change that took place for the assessment year 2018-19 was that earlier, ITR-1 form was applicable for both residents and non-residents but now non-residents need to file ITR-2. Also, this year required taxpayers to furnish a break-up of their salary in their returns form.

“Until now, these details would appear only in Form 16 and there was no requirement to disclose it. Now more data would be available to tax officers for scrutiny and assessment, keeping a check on taxpayers showing lower income,” said Mohan. Using the same example, earlier taxpayers just had to show the final amount ?10 lakh in the returns form as their income, now taxpayers have to show the break-up as well, which is: how much is their basic salary, allowances and perquisites, said Mohan.

Taxpayers also have to show a break up of ‘Income under House Property’ which was earlier required only in forms other than ITR-1. The ‘other income’ category has also been bifurcated this assessment year onwards.

“Such government initiatives restrict non-reporting or lower reporting of taxable income by salaried employees. Availability of comprehensive information from taxpayer will enable online systems of income tax department to analyse data effectively and catch tax evaders much sooner,” said Mohan.