Make Sure You File the Correct I-T Form This Return Filing Season
Earlier this year, the Central Board of Direct Taxes (CBDT) announced a few changes in the Income Tax Return (ITR) forms, as a measure to keep black money in check. It was a move for the welfare of the nation as a whole. However, many across industries found the forms to be quite cumbersome due to the exhaustive disclosure norms. Hence, on May 31, 2015, the Government introduced some further changes in these ITR forms.
Let's look at the changes introduced in the new Income-Tax (I-T) forms...
|Number of Pages
||Consists of 14 pages
||Will consist of only 3 pages, any other detail, if applicable, needs to be filled in the schedules
||Those making foreign trips need to furnish the following information:
- Details of your passport number,
- Name of the place where the passport was issued,
- Countries you visited during the year,
- Number of times you visited foreign countries (in case you are a resident taxpayer),
- Expenses you incurred during your foreign trips from your 'own sources' is required to be provided
|Those making foreign trips will need to furnish:
Only the passport number will be needed to be provided in ITR-2 and ITR-2A
||In case of an exempt income higher than Rs 5,000, ITR-2 is required to be filed
||In case of exempt income, of any amount, (barring agricultural income of more than Rs 5,000), ITR-1 (Sahaj) will be needed to be filed
|Individuals and HUFs having income from more than 1 house property
||ITR-2 is required to be filed by individuals and HUFs having income from more than 1 house property and capital gains
||Individuals and HUFs having income from more than 1 house property but not capital gains, foreign income/assets or income from business/profession; ITR-2A will be required to be filed
|Bank account details
||CBDT expects you to give the following disclosures while filing returns:
- All bank accounts held during the year for which income is being reported (including addresses of banks, IFSC codes etc.)
- Information about joint holders
- Bank-wise closing balance in all accounts as on March 31st of the fiscal year for which income is being reported
|Going forward, the bank-wise closing balance in all accounts will not be required to be disclosed. Moreover, you won't have to give disclosures for dormant accounts that have not been in operation during the previous 3 years. Only the following details are required to be disclosed:
- Account numbers for all the accounts (current and savings) held at any time during the 'previous year' for which income is being reported
- IFSC Codes
|Going forward, foreign nationals who had acquired assets when they were non-residents won't be required to disclose them, as long as no income is being earned from them in the 'previous year'
||Foreign nationals who have become ordinary residents in India are required to disclose all their assets held abroad
||Going forward, foreign nationals who had acquired assets when they were non-residents won't be required to disclose them, as long as no income is being earned from them in the 'previous year'
It is noteworthy that the new forms which are revised further would be made accessible to all in the third week of June 2015, and the deadline for filing returns has been proposed to be extended to August 31, 2015 from July 31, 2015.
PersonalFN is of the view that although the Government endeavors to make the process of filing I-T returns simpler; it would always keep a strict surveillance for detecting tax evaders.
You should always make proper disclosures and never hide your income from the income-tax authorities. Non-payment of taxes is a punishable offence and can lead to a lot of physical and mental stress for you and your family. Filing I-T returns apart from being viewed as a legal responsibility, should also be considered as a moral responsibility. It earns you the dignity of consciously contributing to the development of the nation. This apart, your I-T returns validate your credit worthiness before financial institutions and make it possible for you to access many financial benefits such as bank credits etc.
Even if you aren't earning income which comes under the tax bracket; it is always advantageous to file your income tax returns given the perils such as facing prosecution, difficulties in obtaining a loan (when you need funds), impediments in visa approval while travelling abroad, registration of immoveable property; amongst a host of others.
Remember to save tax the legitimate way and undertake prudent tax planning activity well in advance to keep your finances in pink.
PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.
More Views on News
Mar 10, 2016
An opportunity to find an impeccably trustworthy and competent financial guardian is in the offing.
Feb 29, 2016
Most financial planners come out as whiz kids who throw around financial jargon. But financial planning can be actually easy, provided one follows a disciplined approach.
Feb 12, 2016
PersonalFN highlights the benefits of parking a portion of your expenses in e-wallets and using them efficiently.
Feb 2, 2016
Mutual funds take a bearish call on the FMCG sector. The sector has started playing out due to a combination of slower growth and expensive valuations.
Feb 1, 2016
Ethical practices help build long lasting relationships, and healthy long-term business relationships are often mutually rewarding. But PersonalFN is of the view that the financial services industry in India seems to have forgotten this.
More Views on News
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 10, 2017
Bitcoin hits an all-time high, is there more upside left?