The Central Board of Direct Taxes (CBDT) has notified the new tax return forms vide Notification No. S.O. 626 (E) dated 28 March 2012 for tax year 2011-2012 [Assessment Year (AY) 2012-13]. The Notification also modifies Rule 12 of the Income-tax Rules, 1962 which prescribes the form of return of income for taxpayers. The amendments come into effect from 1 April 2012.
Further, as per the notification, individuals having taxable income exceeding Rs. 10 lakh and, domestic and expatriate resident individuals with assets located overseas have to mandatorily file their returns through the electronic mode.
The forms notified are for individuals and HUF. The CBDT is still to notify tax forms for other category of taxpayers like firm, LLP, company etc. The forms to be used for filing of income tax return for AY 2012-2013 are as follows:
ITR – 1 (SAHAJ)* – Individual having income classified as:
2. House Property (where the individual does not own more than one house property
3. Income from Other Sources (except winnings from lottery or income from race horses)
ITR – 2- For Individual and Hindu Undivided Family (HUF) not having income under the head ‘Business and Profession’.
ITR – 3- For Individual/HUF being partners in firms and not carrying out business or profession as a proprietorship concern
ITR – 4S (SUGAM)- *For Individual/HUF deriving income under the head ‘Business and Profession’ and having opted for being taxed under sections 44AD and 44AE (presumptive basis of taxation)
ITR – 4 – For Individual and HUF having income from a proprietary business or profession
*Individual and HUF assessees, who are residents and have assets (including financial interest in any entity) located outside India or signing authority in any account located outside India, cannot use the Forms ITR-1 (SAHAJ) or ITR – 4S (SUGAM), as the case may be.
Key requirements of the new forms
The CBDT has amended the forms -ITR 2/3/4- wherein domestic and expatriate resident individuals have to make additional disclosures if foreign assets mentioned below which are held and located outside India:
i. Foreign bank accounts
ii. Financial interest in any entity
iii. Immovable Property
iv. Any other asset and
v. Details of account in which the assessee holds signing authority and which is not included in 1 to 4 above.
a. Overseas assets to be disclosed include:
‒ Bank accounts – indicating location of the country, name and address of the bank, the account holder’s name and the peak balance maintained in the account during the year;
‒ Financial interests in an entity – mentioning the country name and code, name and address, and nature of the entity where the interest is held and the total investment;
‒ Immovable property /other asset –country name and code, location of property/asset and total investment;
‒ Details of accounts with signing authority that have not been included in the above together with the name and address of the institution where the account is held, the account holder’s name and the peak balance maintained/investment made during the year
b. Individuals claiming foreign tax relief to mention overseas location’s tax identification number along with details of income earned, taxes paid and relief claimed.
Other Amendment in form ITR 2
1. A schedule is inserted to provide details of tax relief claimed under sections 90/90A/91 under the Income-tax Act, 1961 (the Act) in relation to taxes paid in foreign country on income which is doubly taxed. The old form did not have such schedule for providing more details but only had a claim amount to be included in the income computation.
2. On similar lines, a schedule is inserted to provide details of deduction claimed under section 8oG in relation to donation made. However, the old form did not have such schedule for providing more details but only had a claim amount to be included in the income computation.
Summary of changes
Forms changed to capture details of –
1. any asset (including financial interest in any entity) outside India;
2. Signing authority in any account outside India.
Resident individuals / Hindu Undivided Family (HUF) will now need to furnish details of the following in the tax return form –
a. Bank accounts held in foreign countries (details of the bank, the account held and peak balance in Rupees during the year);
b. Financial interest in a foreign entity (details of the entity and total cost of investment in Rupees);
c. Immovable property held outside India (details of the property and total cost of investment in Rupees);
d. Any other asset held outside India (details of the asset and total cost of investment in Rupees);
e. Signing authority in any of the above (with details and peak balance / cost of investment during the year in Rupees).
Use of Sahaj / Sugam forms restricted – Sahaj and Sugam tax forms were introduced last year in order to make the tax return forms for specified category of taxpayers less complex. Resident individuals / HUF who are now required to report foreign assets cannot use the Sahaj / Sugam tax forms going forward.Forms changed to capture details of foreign tax relief claimed in India Individuals or HUF who claim a relief on account of double taxation of income in a foreign jurisdiction will need to provide details of foreign jurisdiction, the tax identification number in the foreign country and details of the income earned in / tax paid in the foreign country as well as the relief claimed.E-filing of tax return made mandatory for certain class of individuals
Electronic filing was earlier optional but has been made mandatory for the following –
1. Resident individuals / HUF who hold assets (including financial interest) outside India/ signing authority in account located outside India;
2. Individuals / HUF with total income exceeding Rs 10,00,000 during the financial year.
Other additional information required to disclosed
1. Co-ownership details in respect of house property to be furnished [i.e. Name, Permanent Account Number (PAN) and ownership share of co-owners];
2. Long term capital gains calculated with and without claiming benefit of indexation of cost for inflation to be reported separately;
3. Detailed information (name, address and PAN) of done required for claiming deduction in respect of specified donations;
4. Unique Tax Deduction at Source (TDS) certificate Number and Financial Year in which TDS is deducted to be reported for TDS on income other than salary;
5. Reporting of capital investment and percentage share in the profit of the partnership firms introduced in addition to reporting share of income. Share of income to be reported in schedule IF as well schedule EI (details of Exempt Income);
6. Detailed reporting of Unabsorbed Depreciation loss introduced (applicable mainly in case of business income).