New ITR forms for Assessment Year 2017-18 notified by CBDT

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

The CBDT has notified new income-tax return forms (ITR forms) for the assessment year 2017-18. It has prescribed simplified version of ITR-1 with fewer columns. A new column has been inserted in ITR Forms to report cash deposits in banks above 2 lakhs during the demonetisation period, i.e., from November 9, 2016 to December 30, 2016.

CBDT had prescribed new ‘Form ITR 4 Sugam’ for taxpayers opting for presumptive taxation scheme. A new column has been prescribed to mention digital receipts as the rate of presumptive income is 6% for such receipts.

The new ITR forms prescribed are listed below:-

ITR_1 For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income upto Rs.50 lakh

ITR_2 For Individuals and HUFs not carrying out business or profession under any proprietorship

ITR_3 For individuals and HUFs having income from a proprietary business or profession

ITR_4 For Presumptive Income from Business & Profession

ITR_5 For persons other than – (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7

ITR_6 For Companies other than companies claiming exemption under section 11

ITR_7 For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)

Changes in new ITR forms are as follows.

1) Simplified one page ITR Form for Salaried class taxpayers

[ITR 1 Sahaj] Now the Govt. has notified simplified one page form ‘ITR-1 Sahaj’ for individuals earning income from salary, pension, one house property and income from other sources. It has removed columns which are not frequently used by the taxpayers.

New ‘ITR-1 Sahaj’ has retained those deductions which are most frequently used by the taxpayers, viz, under Section 80C, 80D, 80G and 80TTA.

If any taxpayer wants to claim deduction under any other provision of chapter VI-A he can specify the relevant Section in column titled as ‘Any other’. Schedules of TDS and TCS have been merged into one in order to make ITR 1 shorter and simpler.

However, new columns have been inserted to report dividend income and long-term capital gains exempt under Section 10(34) and Section 10(38) respectively.

2) Disclosure of cash deposits during demonetization

[ITR 1, 2, 3, 4, 5, 6, 7]  A new column has been introduced in all ITR Forms to report on cash deposited by taxpayers in their bank accounts during the demonetization period, i.e., from November 9, 2016 to December 30, 2016. However, taxpayers are required to fill up this column only if they have deposited Rs 2 lakh or more during the demonetization period.

3) Quoting of Aadhar Number

[ITR 1, 2, 3, 4] The Finance Bill, 2017 as passed by Lok Sabha has introduced a new Section 139AA requiring every person to quote Aadhar number in the return of income. If any person does not possess the Aadhaar Number but he had applied for the Aadhaar card then he can quote Enrolment ID of Aadhaar application Form in the ITR.

It may be noted that firms are also required to Quote Aadhaar number of their Partner/members in new ITR 5. Further, in case of trust Aadhaar number of Author(s) / Trustee(s) / Manager(s), etc., are required to be specified in new ITR 7.

4) Income taxable at special rates

Unexplained income     [ITR 2, 3, 5, 6, 7]

As per Section 115BBE any unexplained credit or investment attracts tax at 60% (plus surcharge and cess, as applicable), irrespective of the slab of income.

Now new columns have been inserted in ITR Forms under ‘Schedule OS’ to report such unexplained income under ‘Schedule SI’.

It may be noted that any taxpayer having unexplained income cannot opt for ITR-1 Sahaj.

Dividend above Rs 10 lakhs

As per Section 115BBDA the dividend received from domestic company is taxable at rate of 10% if aggregate amount of such dividend exceeds Rs. 10 lakh. New column has been inserted in ITR Forms to declare such dividend income in ‘Schedule OS’.

It may be noted that any taxpayer having dividend income above Rs 10 lakhs and covered under Section 115BBDA cannot opt for ‘ITR-1 Sahaj’.

Patent income

A new column has been inserted in ITR Forms to declare royalty income from patent developed and registered in India and chargeable to tax at 10% under section 115BBF.

5) Deduction under section 80EE

[ITR 2, 3, 4] Section 80EE allows deduction on home loan interest for first time home buyers. This deduction is over and above the Rs 2 lakhs limit covered under Section 24(b).

A new field has been provided in new ITR Forms under Schedule VI-A deductions to claim home loan interest under Section 80EE.

6) Declaration of value of assets and liabilities by Individuals/HUF earning above Rs 50 lakhs

[ITR 2, 3, 4] During 2016, the Govt. had introduced new Schedule requiring individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs. Taxpayers were required to mention cost of immovable property, jewellery, bullion, vehicles, shares, bank and cash balance, etc.

Now tax payers are also required to disclose address of immovable property and description of movable assets in new ITR Forms. Further, new fields have been introduced in ITR Forms for disclosure of ‘Interest held in the assets of a firm or AOP as a partner or member’. Such members/partners are also required to disclose name, address, PAN of the firm or AOP.

7) Registration number of Chartered Accountant Firm

[ITR 3, 5, 6] Now taxpayers are required to mention registration number of firm of Chartered Accountant which has done audit in ITR Forms.

8) Bifurcation of receipt/expenses from business and profession in no account case.

[ITR 3, 5] In old ITR Forms there was no option to bifurcate income and expense of business and profession separately. All receipts were to be clubbed together and shown in ITR.

Now in new ITR forms, there is an option to show receipts from business and profession separately.

9) Deduction of additional depreciation in case of asset put to use for less than 180 days in preceding year

[ITR 3, 5, 6] In case of purchase of an asset which is put to use for less than 180 days, additional depreciation shall be restricted to 50% for that year and remaining would be allowable in the succeeding year.

In old ITR Forms, no column was there under ‘Schedule DPM’ to claim unutilized 50% additional depreciation in succeeding year. Now in new ITR Forms such column has been inserted to claim unutilized 50% depreciation.

10) Segregation of digital receipts and other receipts under presumptive taxation scheme

[ITR 4] As per the presumptive taxation scheme under Section 44AD, 8% of gross receipts or turnover will be deemed as income of the taxpayer. However, in 2017 Union Budget such limit has been proposed to be reduced to 6% for digital receipts of taxpayer.

In new ITR form, new columns have been inserted to show turnover received through digital mode. Consequently, columns have been inserted to show presumptive income at 6% and 8%.

The Finance Act 2016, had introduced the presumptive taxation scheme for professionals as well. Now new ITR 4 Form shows an option to avail such presumptive taxation scheme for professionals under Section 44ADA.

11) Details of receipts as mentioned in Form 26AS under TDS schedule

[ITR 4] ITR 4 which is now applicable for taxpayer opting for presumptive taxation scheme has a new column under the ‘Schedule TDS2’ to show the receipts as mentioned in Form 26AS.

12) Disallowance for non-deducting or non-payment of Equalisation levy

[ITR 3, 5, 6] The Finance Act, 2016 has introduced new provision to deduct 1% Equalization Levy on payment made for certain advertisement services paid to non-residents.

Any default in deduction or payment of Equalization levy would attract disallowance of Section 40(a)(ib). In new ITR Forms a new column has been inserted under ‘Part A-OI’ to mention such disallowance under section 40(a)(ib).

13) Disallowance of any amount payable for use of railway assets

[ITR 3, 5, 6] Any sum payable by the assessee to the Indian Railways for the use of railway assets shall be allowed as deduction on actual payment basis as per section 43B.

A new column has been inserted under ‘Part A-OI’ for disallowance under section 43B in case of non-payment of such amount on or before due date of furnishing return of income.

14) New schedule to report ‘receipt and payment’ account of a company under liquidation

[ITR 6] A new schedule ‘Part A-OL’ has been inserted in ITR 6 to furnish details of ‘receipt and payment’ account of company under liquidation.

15) Changes related to ITR 7 in respect of Charitable Trusts

[ITR 7] Various changes have been introduced in the new ITR 7 form. Now trust is required to furnish following additional details in new ITR 7 –

  1. a) Registration number and date of registration for business trusts registered with the SEBI.
  1. ) ‘Schedule AI’ to report aggregate of income referred to in section 11 and 12 excluding voluntary contribution.
  1. c) ‘Schedule ER’ to report amount applied to charitable or religious purposes (revenue account).
  1. d) ‘Schedule EC’ to report amount applied to charitable or religious purposes (capital account).
  1. e) ‘Schedule 115TD’ to report accreted income of trust under section 115TD

Government notifies simplified ITR forms; e-filing to start from April 1

by | posted in: Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0

The government today notified a simpler, one-page form for filing income tax returns while making it mandatory to quote Aadhaar number and disclose bank deposits of more than Rs 2 lakh post demonetisation.

The Income Tax Return Form-1 (Sahaj) will replace the 7-page form, removing a plethora of columns on deductions from income claimed.

Sahaj can be filed by an individual having income of up to Rs 50 lakh from salary, house property and interest.

Currently, SAHAJ (ITR 1) is filed by salaried employees and ITR 2 by individuals and HUFs whose income does not include income from business.

The government has done away with form ITR 2A (used by individuals & HUFs not having income from business or profession and capital gains and by those who do not hold foreign assets).

Sahaj makes quoting of 12-digit biometric identifier Aadhaar number mandatory along with Permanent Account Number (PAN) and also seeks details of cash in excess of Rs 2 lakh that was deposited in bank accounts in the 50-day post demonetisation window.

ITR 2 and ITR 3 have a Schedule AL requiring assessees to declare their assets and liabilities at the end of the fiscal.

Only 6 crore out of 29 crore persons having PAN file income tax returns at present.

The e-filing facility for ITR-1 is enabled from April 1 and ITRs can be filed till the stipulated deadline of July 31.

While the old ITR form too had column to quote Aadhaar, the government has through an amendment to the Income Tax Act this week made quoting it mandatory.

“The Central Board of Direct Taxes has notified Income- tax Return Forms (ITR Forms) for the Assessment Year 2017-18. One of the major reforms made in the notified ITR Forms is the designing of a one page simplified ITR Form-1 (Sahaj),” CBDT said in a statement.

In the new form, parts relating to tax computation and deductions have been rationalised and simplified for easy compliance.

Besides personal details, an income tax filer needs to disclose only his income from salary or pension, one house property and other sources like interest. Thereafter, deduction claims are to be stated, followed by computation of taxable income.

Bank details are to be filled in the column following that. Details of advance tax, self-assessment tax payments and tax deducted at source come next.

In the column for providing bank details, cash deposited in excess of Rs 2 lakh during November 9 to December 30, 2016 has to be mentioned.

The rationalised ITR will “reduce the compliance burden to a significant extent on the individual tax payer,” the CBDT said, adding that the move would benefit more than two crore tax-payers who will be eligible to file their return of income in this simplified Form.

Instead of 20 columns of deductions in the old form, only four deductions claims in respect of Section 80C, 80D, 80G and 80TTA need to be filled.

“Simultaneously, the number of ITR Forms have been reduced from the existing nine to seven forms. The existing ITR Forms ITR-2, ITR-2A and ITR-3 have been rationalised and a single ITR-2 has been notified in place of these three forms,” it said.

Consequently, ITR-4 and ITR-4S (Sugam) have been renumbered as ITR-3 and ITR-4 (Sugam) respectively.

There will be no change in the manner of filing of ITR Forms and all the returns are to be filed electronically.

However, where return is furnished in ITR-1 (Sahaj) or ITR-4 (Sugam), an individual of the age of 80 years or more, an individual or HUF whose income does not exceed Rs 5 lakh and who has not claimed any refund in the return of income, have an option to file return in paper form.

At the time of filing the form, the taxpayer has to fill in PAN, Aadhaar number, personal information and information on taxes paid. TDS will be auto-filled in the form.

Post July 1, as per amendments to the Finance Bill 2017 as passed by the Lok Sabha, it would become mandatory for an assessee to provide the Aadhaar number or the number showing that he has applied for Aadhaar in the ITR.

Also ITR 4 (filed by Individuals & HUFs having income from a proprietary business or profession) will now be known as ‘Sugam’ and ITR-4S will be substituted.

“Going forward for AY 2017-18, the benefit of using the simplest ITR form i.e. ITR-Sahaj shall not be available to the following category of taxpayers: those earning total income of more than Rs 50 Lakh, those earning dividend income of more than Rs 10 lakh and those whose total income includes cash credits, unexplained investments, unexplained money etc,” said Nangia & Co Partner Suraj Nangia.

Similarly, ITR 4 (Sugam) cannot be used by the following category of taxpayers — those earning dividend income of more than Rs 10 lakh, those whose total income includes cash credits, unexplained investments, unexplained money etc.

“Owing to the aforesaid changes, taxpayers earning income for these sources will have to file a more detailed form containing disclosure in respect of their assets and liabilities, bank accounts etc,” Nangia said.

I-T refunds rise by a whopping 41.5%, government issues 1.62 cr refunds worth Rs 1.42 lakh cr

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
The income tax department has issued refunds to the tune of Rs 1.42 lakh crore so far this fiscal till February 10, 41.5 per cent higher than last year’s.

The income tax department has issued refunds to the tune of Rs 1.42 lakh crore so far this fiscal till February 10, 41.5 per cent higher than last year’s. The Centralised Processing Centre (CPC) of the tax department has already processed over 4.19 crore income tax returns (ITRs) and issued over 1.62 crore refunds during the current financial year up to February 10, 2017.

“The amount of refunds issued at Rs 1.42 lakh crore is 41.5 per cent higher than the corresponding period last year,” an official statement said. As much as 92 per cent of the refunds issued are below Rs 50,000 due to the high priority given to expeditious issue of refunds to small taxpayers.

Only 2 per cent of refunds less than Rs 50,000 remain to be issued. A majority of these cases relate to recently-filed ITRs or where the taxpayer’s response to the department is awaited.

The department also advised taxpayers to verify and update their e-mail address and mobile number on the e-filing portal to receive electronic communication.

“CBDT is committed to ensuring best possible taxpayer services through its e-governance programmes and increasing the coverage and scope of electronic filing and processing of various forms and applications,” the statement said.

As a result of emphasis on expeditious issue of refunds, 92 per cent of all I-T returns were processed within 60 days, demonstrating the Central Board of Direct Taxes’ (CBDT) commitment to faster and more efficient taxpayer service.

As many as 4.01 crore ITRs were e-filed till February 10, 2017, an increase of 20 per cent over the previous year.

Also, more than 60 lakh other online forms were filed with an increase of nearly 41 per cent compared with the previous year.

In April-January, the total direct tax collection grew 10.79 per cent to Rs 5.82 lakh crore led by robust collections in personal income tax.

CAs, Merchant Bankers face fine if assessees file wrong tax information

by | posted in: Accounting Standards, Audit, Due Diligence, Corporate Updates, Economy, Business Updates, Corporate Affairs | 0
CBDT chairman Sushil Chandra addressing a CII interactive session on Union Budget 2017-18 in New Delhi on Monday.

From April 1, chartered accountants (CAs), merchant bankers and valuers can’t escape responsibility for filing of incorrect information in certificates or reports attached with income tax returns of assessees.

 

They will be fined Rs 10,000 for each such certificates or reports, according to a provision in the Budget for 2017-18.

 

For this purpose, the Budget has proposed to insert a new section, 271J, in the Income Tax Act.

 

“Under Section 271J… we have entrusted responsibility with chartered accountants, valuers and merchant bankers who files audit, valuation reports and other things…,” CBDT Chairman Sushil Chandra said at a post-Budget interaction with PHD Chamber of Commerce and Industry here. “So, if they file any incorrect information in the returns, they are also liable for a token penalty of Rs 10,000.”

 

The whole system is based on “a lot of faith on CAs and assessees and they have to be more responsible”, he said.

 

While there are many provisions to penalise the defaulting assessees, there was none to penalise CAs, merchant bankers and valuers.

 

A memorandum to the Finance Bill said: “In order to ensure that the person furnishing reports or certificates undertakes due diligence before making such certification, it is proposed to insert a new section (271J in the Act) so as to provide that if an accountant or a merchant banker or a registered valuer furnishes incorrect information in a report or certificate, the assessing officer or the commissioner (appeals) may direct him to pay a sum of Rs 10,000 for each such report or certificate by way of penalty.”

 

Chandra said the objective of the Budget was to improve tax compliance along with increasing tax base and improving ease of doing business.

 

Non-compliance level was high despite low tax, he said, adding that Indians named in various black money reports, including Panama Papers, were among the highest.

 

He pointed to high level of evasion of tax and tendency to export black money to foreign shores in spite of having global practices and standards, emphasising that this has to come down. “The department has done its bit, now it’s time for the taxpayers to show their respect to the law of land,” he said.

 

On long-term capital gains tax, he said the Budget has tried to plug gaps.

 

In the past few years, the tax department has detected Rs 80,000-crore sale consideration through the penny stock mechanism, the CBDT chief said, adding that this was used for conversion of black money into white.

 

However, “neither have we changed capital tax regime nor have we changed any law. So, whosoever was getting the benefit of long-term capital gains through ESOP, IPO and FPO is not going to change”.

 

Nothing is going to change except misuse, he clarified.

All I-T returns must be filed by March-end of assessment year

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0

 

If the income exceeds Rs 5 lakh, a fee of Rs 5,000 shall be payable

With a view to expedite tax assessments, the income tax department proposes to make it mandatory for tax payers to file I-T returns as well as revised returns by March end of the assessment year (AY).

The department, in the memorandum to Finance Bill 2017, has also proposed a fee for delayed filing of income tax returns. In case of people whose total income does not exceed Rs 5 lakh, Rs 1,000 fee would be charged.

If the income exceeds Rs 5 lakh, a fee of Rs 5,000 shall be payable, if the return is filed after July but on or before December 31 of the Assessment Year (AY). A fee of Rs 10,000 shall be payable if ITR is filed after December.

“In order to expedite assessments of the Department, it is critical that the returns for an assessment year also freeze by the end of the assessment year. It is hence proposed to amend the provisions of sub-section (5) of section 139 to provide that the time for the furnishing of revised return shall be available up to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier,” said the memorandum to the Finance Bill 2017.

This effectively means that people filing Income Tax returns have to file it with the department by March end of the assessment year i.E return for fiscal 2017-18 has to be filed by March 2019.

CBDT Chairperson Sushil Chandra said: “Today we have 1 crore people below Rs 2.5 lakh income filing tax returns. So if they are filing ITR, we want them to file returns on time. So now timely filing of ITR is mandatory.”

So far assesses were permitted to file delayed income tax returns one year after the completion of the assessment year.

Source: http://www.business-standard.com/article/economy-policy/all-i-t-returns-must-be-filed-by-march-end-of-assessment-year-117020201119_1.html

Benami Act comes into play: I-T issues 87 notices; attaches assets worth crores

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
The Income Tax department said it has issued 87 notices and attached bank deposits worth crores in 42 cases nationwide.
Initiating a stringent action against black money holders post notes ban, the Income Tax department on Monday said it has issued 87 notices and attached bank deposits worth crores in 42 cases nationwide under the newly enforced Benami Transactions Act which attracts a heavy penalty and rigorous jail term of a maximum 7 years.Post the demonetisation order of the government on November 8 last year, the department had carried out public advertisements and had warned people against depositing their unaccounted old currency in someone else’s bank account saying such an act would attract criminal charges under the Benami Property Transactions Act, 1988, applicable on both movable and immovable property, that has been enforced from November 1, 2016.“After in-depth investigations, the I-T department has issued 87 notices under section 24 of the said Act (notice and attachment of property involved in benami transaction). A total of 42 properties, largely monies worth crores in bank accounts and an immovable property, of benamidars have been attached,” officials said citing an analysis report, also accessed by PTI.The I-T department is the nodal department to enforce the said Act in the country.They said the taxman has issued numerous summons under the Benami Transactions Act and is in the process of issuing more.

The decision, they said, to slap the stringent provisions of the Benami Transactions Act was taken after analysing serious cases where the illegalities were blatant and suspect cash was deposited in either benami accounts or Jan Dhan or dormant accounts.

The taxman had initiated a nationwide operation to identify suspect bank accounts where huge cash deposits have been made post November 8 when the government demonetised the Rs 500 and Rs 1000 currency notes.

Officials said the Act empowers the taxman to confiscate and prosecute both the depositor and the person whose illegal money he or she has “adjusted” in their account.

“Such an arrangement where a person deposits old currency of Rs 500 and Rs 1000 in the bank account of another person with an understanding that the account holder shall return his money in new currency, the transaction shall be regarded as benami transaction under the said Act.

“The person who deposits old currency in the bank account shall be treated as beneficial owner and the person in whose bank account the old currency has been deposited shall be categorised under this law as a benamidar,” a senior official had explained earlier.

Source: http://www.hindustantimes.com/india-news/benami-act-comes-into-play-i-t-issues-87-notices-attaches-assets-worth-crores/story-d5idzriuNZtuuRQ0xyghQP.html