Decoding Income Tax Return Forms (A.Y 2018-19)

Income Tax Returns are the prescribed formats in which a taxpayer has to provide the information about his income, source of such income and income-tax paid or payable thereon to the Income-tax Department.

The Income Tax Department continuously improve the taxpayer services like E-filing of Income Tax Returns & Forms, Compliance Portal and E-assessment and seeks the cooperation of all taxpayers in contributing their fair share of taxes voluntarily.

The Department has issued SEVEN TYPES OF ITR FORMS & their utilities applicable for AY 2018-19 which are to be used by different class of taxpayers. These ITR Forms will be applicable to file Income Tax Returns in respect of income earned during the period 01-04-2017 to 31-03-2018.

CHANGES IN INCOME TAX RETURN (ITR) FORMS APPLICABLE FOR AY 2018-19

The new Income Tax Forms enhances the responsibility and accountability of the Taxpayer. Now the taxpayer has to prove their claim for deductions, expenses & allowances. The new Form includes some new schedules and some existing schedules have been modified.

ITR-1: For Individuals being a resident other than not ordinarily resident having Income from salaries, one House Property, other source (Interest etc). and having total income upto Rs. 50 lakh

• Applicable only for RESIDENT INDIVIDUALS with an income of up to 50 lakhs.
• Non-residents cannot file this form for reporting income of FY 2017-18.
• Income includes Income from salaries, one house property and other income.
• Furnish a break-up of salary like in Form 16, break up of Income under House Property.
• To claim credit of TDS on rent paid in excess of 50,000 an additional field for furnishing details of TDS as per Form 26QC has been incorporated. A field for quoting of PAN of Tenant for such rent cases has also been made.

ITR-2: For Individuals and HUF not having income from profits and gains of business or profession

• Applicable for Individuals or HUF for reporting their income other than income from “Profits and Gains from Business or Profession”.
• As ITR 1 is not applicable for RNORs and the non-residents they have to file ITR 2.
• No Schedule for ‘Business or Profession’.
• Schedule-IF (Income from Firm) and Schedule-BP have also been removed.
• Field for interest held in the assets of a firm or association of person has been removed.
• In case of non-residents, the requirement of furnishing details of any one foreign Bank Account has been provided for the purpose of credit of refund. Earlier, they could only provide details of bank accounts held in India.
• To claim credit of TDS on rent paid in excess of Rs. 50,000 an additional field for furnishing details of TDS as per Form 26QC has been incorporated. A field for quoting of PAN of Tenant for such rent cases has also been made.

ITR-3: For Individuals and HUF having income from profits & gains business & profession

• Applicable for Individuals and HUF receiving income under the head “Profits and Gains from Business or profession” in FY 2017-18.
• An option to select section 115H (who is a non-resident Indian in any previous year, becomes assessable as resident in India in respect of the total income of any subsequent year) has been added.
• New columns to report CGST, SGST, IGST and UTGST paid by, or refunded to, assessee during the Financial Year has been incorporated.
• Depreciation rate has been limited to 40% in all depreciation related Schedules.
• Partners of partnership firms as against ITR 2 will have to file their returns in ITR 3.

ITR-4 (SUGAM): FOR PRESUMPTIVE INCOME FROM BUSINESS & PROFESSION

• Applicable for Presumptive tax payers.
• Additional requirement to quote GSTR No. and turnover/gross receipts as per GST Return filed.
• Assesse has to furnish additional financial particulars:
• Partners/Members Capital
• Secured Loan
• Unsecured Loan
• Advances
• Fixed Assets

ITR-5: For persons other than,- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7

• Depreciation has been limited to a maximum of 40% in all depreciation related schedules.
• Specific columns have been introduced to report each capital gain exemption separately under Sections 54,54B, 54EC, 54EE, 54F, 54GB and 115F.
• New columns to report CGST, SGST, IGST and UTGST paid by, or refunded to, assessee during the Financial Year has been incorporated.

ITR-6: For Companies other than Companies Claiming Exemption under

• Details in respect of all transactions entered into during the year with a registered or unregistered supplier under GST:
• Exempt goods or services
• Composite suppliers
• Registered entities and total sum paid to them
• Unregistered entities.
• Depreciation has been limited to a maximum of 40% in all depreciation related schedules.
• Specific columns have been introduced to report each capital gain exemption separately under Sections 54,54B, 54EC, 54EE, 54F, 54GB and 115F
• New columns to report CGST, SGST, IGST and UTGST paid by, or refunded to, assessee during the Financial Year has been incorporated.
• A new column has been inserted to provide details of apportionment made by the companies from the net profit for the CSR activities.
• Ind AS compliant companies are required to present their balance sheet and profit and loss account in the format as prescribed by Division II of Schedule III to the Companies Act, 2013.

ITR-7: For Companies including Companies required to furnish return under section 139(4A), or section 139(4B), or section 139(4C), or section 139(4D), or section 139(4E), or section 139(4F)

• Trust is required to furnish certain details if there has been a modification to the stated objects and if such objects do not conform to the conditions of registration.
• Additional information is to be presented in ITR 7 by a charitable or religious trust:
• Date of registration or approval granted to the trust;
• Amount utilized during the year for the stated objects out of surplus sum accumulated during the earlier year;
• The table seeking details about the name and annual receipts of institutes under Section 10(23C)(iiiab), (iiiac), (iiiad) and (iiiae) has been removed from the ITR. However, a trust is required to provide details of its aggregate annual receipts of the institutions run by it.
• ITR 7 requires the political parties to make a declaration by selecting ‘Yes’ or ‘No’ in the check-box provided in Schedule LA for political parties in the ITR in response to the question whether it has received any cash donation in excess of Rs 2,000.Further ITR 7 also seeks following information regarding the auditor under Schedule LA for political parties:
• Name of the auditor signing the audit report;
• Membership number of the auditor;
• Name of the auditor;
• Proprietorship/firm registration number;
• PAN of the auditor

MISCELLANEOUS AMENDMENTS

• The new forms do not seek information about the Gender of the taxpayer.
• Information regarding Cash Deposited has been withdrawn from ITR 1 to ITR 7 for the current assessment year.
• The new ITR 3, ITR 5 and ITR 6 require taxpayers to report the impact of ICDS on the profit and loss separately in the three schedules namely Schedule OI, Schedule BP and Schedule ICDS.
• The new ITR forms i.e. ITR 2, ITR 3, ITR 5, ITR 6 and ITR 7 contain relevant changes for reporting the income arising from the transfer of such Carbon Credits and tax thereon.