Points to be considered while filing Income Tax Returns for current year
Changes in the ITR forms are made mainly with an intention to shift the onus on the taxpayers to prove their claim for deductions, expenses or exemptions and also to seek more information from trusts, taxpayers who opted for presumptive taxation scheme, investors in shares of unlisted companies, so on and so forth.
Few major changes in brief are as follows-
- ITR-1 to be filed by taxpayer who earns income from salary/pension, from one house property and from other sources, whose annual taxable income do not exceed Rs. 50 lakhs and his total income does not include any income from betting, gambling, etc.
- The new ITR-1 requires detailed calculation of income from salary and from house property, which was restricted to single figure till last year.
- The new ITR-1 form has been withdrawn for a non-resident. Therefore, a non-resident will have to choose either from ITR-2 or ITR-3 to file his return of income.
- For the Assessment Year 2018-19, an individual or an HUF, who is a partner in a firm, shall be required to file his ITR in Form ITR 3 only. Last year the partners were required to file return in ITR 2.
- In case a taxpayer opts for presumptive taxation scheme under section 44AD, 44ADA or 44AE, he will have to file the return of income in form ITR 4.
- The new ITR 4 form seeks details of 14 financial particulars of business such as amount of secured/unsecured loans, advances, fixed assets, capital account, etc. as against the old ITR 4 seeking only 4 financial particulars of the business, a) total creditors, (b) total debtors, (c) total stock-in-trade and (d) cash balance.
- The new ITR 4 requires a taxpayer to provide the aggregate turnover reported by him in GST Returns. If any difference is found in turnover reported in GST return and ITR, presumptive taxpayers can expect a notice from the Dept. to explain the mismatch in turnover.
- Details of each capital gains exemption under Sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F shall be reported in its applicable column now so as to give separate information of each exemption claimed. Further, a taxpayer availing of these capital gains exemptions is required to mention the date of transfer of original capital asset which was missing in earlier ITR Forms.
- To ensure that investors correctly report the capital gains from unlisted shares, the new ITR Forms require the taxpayer to provide figures of actual sales consideration and FMV as determined by a Merchant Banker or CA and it has been made mandatory to valuation report. The new ITR Forms require the FIIs and other assessees to provide the following information in respect of unlisted shares:
A) Actual Sale Consideration
B) FMV (calculated as per prescribed manner)
C) Deemed full value of consideration (Higher of 1 and 2) (This change also applicable for ITR -3, ITR-5, ITR-6, ITR-7)
- The Finance Act, 2017 had extended the scope of this provision by introducing a new clause, i.e., Section 56(2)(x) which covers all taxpayers within its ambit. Consequently, new columns have been inserted in all ITR forms except ITR 1 and ITR 4 under ‘Schedule OS’ to report any income as specified in Section 56(2)(x).
(This change also applicable for ITR -3, ITR-5, ITR-6, ITR-7)
- The taxpayer shall now be required to pay late filing fees under section 234F along with interest under section 234A, 234B and 234C before filing the ITR. Till last year late fees is levied under Section 234F was imposed only after filing of return.
- The new ITR forms have introduced new columns to report CGST, SGST, IGST and UTGST paid by, or refunded to, assessee during the Financial Year.
- The column of gender has been removed and now no Individual taxpayers who are filing income-tax return in Form ITR 2 or ITR 3 or ITR 4 has to mention the gender in the return.
- Separate columns added for disclosures u/s 40(a)(ia), 41(1)
- Changes has been made in the disclosure in depreciation schedule
- Disclosure is required to be given for loss on account of deviation from ICDS. Column has been added for the same
- Details of business transactions with registered and unregistered suppliers under GST need to be given
- Reporting of CSR Appropriations is required
- Break up of payments and receipts in foreign currency required to be given
- Ownership information in case of unlisted company is required
Note – Detailed Form wise changes will be listed out in next release of updates in ITR forms, which will be released soon.
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