CA Umesh Sharma
Arjuna (Fictional Character): Krishna, Financial year 2014-15 is over. Now Income Tax Return will have to be filed for that year. The Department has notified some of the modified forms for filing Income Tax Return. Which forms have been notified, what are the changes made in it and what is its impact on Taxpayers?
Krishna (Fictional Character): Arjuna, Income Tax Department has specified various types of Forms on the basis of Source of Income and type of Taxpayer. Out of them ITR 1, ITR 2, and ITR 4S forms have been made available. Income Tax Department makes changes in Income tax return for the amendments made in Income Tax Act through Finance Budget and to collect more information from taxpayer so as to avoid Tax Evasion.
Arjuna: Krishna, What are the changes in Income Tax Return which are applicable to all taxpayers?
Krishna: Arjuna, Following are the major changes in Income Tax return applicable to every taxpayer:
1) Details of All Bank Accounts: Earlier, Taxpayer had to provide details of only one Bank Account along with IFSC code in the Return. Now details of all Bank Accounts have to be given like Name of Bank, Account No., IFS code, Joint Account Holder and Balance as on 31st March etc. Also details of Account closed in that year will have to be given. Government is making such changes to stop Tax Evasion, to reduce Black Money and to ensure compliance of Law. These Bank Accounts will be cross verified through PAN so Taxpayer has to provide correct information.
2) Aadhar Card: Every Assessee has to mention his Aadhar card No. in Income Tax Return. Online verification will be made through Aadhar Card No. and therefore there will be no need to send signed copy of Acknowledgement of Return to Bangalore. For this Government has made available the new option of “Electronic Verification Code.” This EVC code is linked to Aadhar Card. This means it will be essential for the Taxpayer to obtain Aadhar Card. Financial and Government related transaction like Gas Subsidy, Grants, etc linked with Aadhar card will be cross checked by Income Tax Department.
3) Super Senior Citizen: Taxpayers having age more than 80 Years and filing ITR 1 or ITR 2 i.e. not having income from Business or Profession can file income tax return manually. They are not mandatorily required to E-file the return even if they have income above 5 lacs or are claiming refund in income tax return. Due to this change Government has given relief to Super Senior Citizens from E- filling of Return.
4) Compulsory E-Filing: The Taxpayer claiming Refund is required to E- file the Return of Income even though his Income is not exceeding Rs.5 lakh. That means Government has consolidated the Refund processing and has made it online.
Arjuna: Krishna, what are the changes made in ITR 4S?
Krishna: Arjuna, ITR 4S Sugam Form is for those Taxpayers who show Presumptive Income i.e. they file their Return of Income according to section 44AD or 44AE. Following are the major changes in it:
1) Under section 44AE, Taxability of Income from Heavy goods vehicle and other were bifurcated but now from FY 2014-15 the basic limit for showing the Income is same for all type of vehicles. Accordingly changes are made in Return of Income.
2) If taxpayer is availing Deduction u/s 80G and filling ITR 1 or ITR 4S then he is not required to provide detailed information of Donation given.
Arjuna: Krishna, what are the changes made in ITR 2?
Krishna: Arjuna, Following are the major changes in ITR 2:
1) While showing Income from House property: 1) Income from let out property and 2) Income from deemed let out property to be specified.
2) If Taxpayer has deposited under Capital Gain Scheme for unutilized capital gain, then details of Amount utilized and not utilized are to be provided.
3) Taxpayers having Agriculture income will have to give details of Gross Agriculture receipts, expenditure and Unabsorbed Agriculture loss for 8 Years.
4) Details of Foreign trip made for any reason has to be given. He has to mention his Passport No., place of issue, Name of Country, No of times visited, and the details of amount of expenditure made on the foreign trip out of own sources of income.
5) Resident taxpayer will have to give details of income from any source outside India along with foreign assets held at any time during the year. Further details of its taxability and the head of Income in which the said income is included are to be mentioned. Further such taxpayers will have to E-file their income tax return.
Arjuna: Krishna, What should the taxpayer learn from the changes in the Income Tax Return?
Krishna: Arjuna, It seems that, Government is gathering more and more information from the Taxpayer. Taxpayer should carefully mention the details of all the Bank Accounts in the Return of Income. Otherwise the taxpayer will have to face the consequences. Also details of Agricultural Income and Foreign trip have to be provided. Correct Information should be given while filing return of Income otherwise for incorrect disclosure along with Tax and interest, penalty will have to be paid. This means Income tax department is collecting more information from Taxpayer to restrict Tax Evasion. But, easy and simple return filing has become complicated. The Finance Minister has said that changes will be considered to simplify the same. Let’s see what happens, but this has left the taxpayers confused.
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how to feed the IFFC Code of post office bank in the ITR4S sheet of “tax paid & Verification)
all these complications are going to make the life of a common tax paying truthful person difficult. It will become more and more difficult for a person to fill up the return form by himself or herself and will have to contact a chartered accountant and pay him also. IFSC code etc why should we give. Cant the govt find it out?
The whole measures looks good if implemented in toto. what is big issue in giving bank a/c numbers. closed a/c details. as an assessee he is supposed to record the bank transactions then where is the question of small investors and things like.People resist change by nature. if your are a true professional you should welcome these changes. Details like agriculture Incomes foreign travel all sound great.
Govt rightly has lost faith on the people on all walks of life especially Professionals and resorting these measures, by these measures ur made to be careful. When in trouble ur true character comes out.
Long live the reformers.
ITRs mention ‘all Bank Accounts”. It is not clear whether it includes Deposits, Recurring Deposits etc.
2. Post Office s do not have IFS Code. What about Deposits or Savings Bank Accounts there.
3. The Govt insists on PAN in Banks. They already have the details on the data bank. Why ask Income Tax filers?
4. A small investor does not keep track of closed Deposits and when he closed. Will it be mandated that the Banks issue certificates each year on Bank Accounts held, Balances on 31st March of previous year and details of “Closed Accounts”?
Thanks for this nice illustration. Stopping tax evasion is very much important but at the same time targeting the correct and actual culprit groups is equally important and to make wise and correct use of collected tax is also important.
However it always seems like all hard measures , scrutiny and checks are put on simple hard working and obedient tax payers but the actual culprits somehow gets a free exit. Moreover it’s heartening to see that most of our hard earned money which govt snatches in name of tax goes to swiss banks of leaders and politicians. Ironically a 10th fail , or past criminal record holder minister earns more and has huge capital than a highly educated and clean employee or serviceman or professional who pays tax regularly. Also our tax goes to feed crimimals and terrorists like Kasaab and many others who’s cases go on and on for years. If you study hard , do all hard work, perform against all odds and get yourself a good job or even if u deserve to earn good just coz of you skills hard work and talent, and earn more, govt is standing there like an authorised thief to snatch away your hard income from you.
Frankly I think big ministers MLAs MPs , business houses should be brought under scanner and hard punishment. Coz a middle class simple worker , employee , serviceman hardly has any chance or way to do any tax evasion or save out few hundres or thousand hard earned money for his own family. Which the govt never cares about.