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The Income Tax Department has notified all the seven forms to be used for filing tax returns. The returns are to be filed for the assessment year 2019-20, that is financial year 2018-19.
Experts says the new forms seek more details like income earned through various sources and tax paid on them during the last fiscal (2018-19). All salaried persons and persons whose accounts are not required to be audited, need to file the returns by July 31. For others, the last date is September 30. After the due date, penalty will be imposed.
Additional disclosers
ITR-1 or SAHAJ cannot be used for an individual who is a director of a company or has investment in unlisted equity shares or has income on which TDS has been deducted in other person’s hands. Similarly, ITR-4 (SUGUM) cannot be used by individuals/HUF who are not resident and ordinarily residents, non-resident partnership firms, directors of companies or persons having investment in unlisted equity shares or having more than one house property, etc.
The amended forms seek comprehensive details regarding unlisted equity shares holding; expand scope of details of foreign assets and income from any source outside India to include details of Foreign Depository Accounts, Foreign Custodial Accounts etc. In case of individual assessees, the forms seek elaborate details with regard to their residential status, directorship details. Further, the forms seek bifurcation between donation in cash and other mode for Sec. 80G deduction purposes.
Similarly, for persons having agricultural income, which is claimed to be exempt from income tax, additional reporting requirements are being prescribed in terms of where such agriculture land is located, area and quality of such land, etc. A self-declaration on residential status of an individual is not any more sufficient and the Income Tax department now wants individuals to report their number of days spent in India and outside India. Similarly, more detailed reporting is required in respect of foreign assets/ bank accounts.
ITR-6 inserts new schedules for shareholding of start-ups, shareholding of unlisted company, require extensive detailing in the new assets-liabilities schedule
Reduce evasion
According to Shailesh Kumar, Director at Nangia Advisors (Andersen Global) , the new ITR forms underline the Government’s stated objective of increasing the tax net and reducing the possibility of tax evasion.
“Vide the latest version of ITR forms, every person, who is a Director or shareholder in an unlisted company, needs to disclose such directorship/ shareholding along with details and PAN number of such company. Further, benefit of relatively simpler ‘ITR-1’ and ‘ITR-4’ are no longer available to such Director/ shareholder in unlisted company,” he said.
Foreign assets
Amarpal Chadha, Partner at EY India, felt that the tax return forms have clearly tried to bring more transparency through disclosures for globally mobile employees, who avail relief under tax treaty. “Details of residence in foreign countries, along with tax identification number, additional disclosure of assets held outside India, basis of determination of residential status in India and availability of Tax Residency Certificate from foreign countries, are some of the additional details, which would be required to be quoted in the returns,” he said.
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