New Income Tax Return Forms: Details of cash deposited during demonetization to reported now in the returns

The Income Tax Department officials would now seek the details of all deposits done by the assessee during the period of demonetization as a part of the newly notified New Income Tax Returns for the assessment year 2017-18. The new Income Tax Return forms now have new column for filling all the details with respect to the deposits made during the demonetization period viz. between 8th November 2016 and 30th December 2016.

What is Different in New Income Tax Return Forms for Ay 2017-18

The Central Board of Direct Taxes through its notification No. 21/2017 has released ITR for the AY 2017-18 and the same could be downloaded from income tax portal.

1. The number of income tax return forms have now been reduced from 9  to 7.
2. The existing income tax return forms ITR-2, ITR-2A and ITR-3 is unified and a single form ITR-2 is notified which has replaced all the previous 3 forms. Accordingly, ITR-4 and ITR-4S are renumbered as ITR-3 and ITR-4 respectively.
3. The department officials said while the income tax department has provided several opportunities to the taxpayers for explaining the existence of their unaccounted deposits which were made during demonetization like under the PMGKY (Pradhan Mantri Garib Kalyan Yojna) scheme and under the Operation Clean Money, this new move for introducing the new column is for ascertaining all the deposits made by persons or entities regardless of the threshold.

One of the senior officers from the department said that it is an effort for discovering what kind of deposits were done during the notes ban. The income tax department has not issued any notices where the amounts of deposits were small, the senior officer further added.

Mandatory use of Aadhar Number

The tax officials also mentioned the new income tax return forms would continue to have the column which would ask taxpayers to provide their Aadhaar number, however; it won’t be optional as it was during last time. The officials also added that the e-verification of income tax returns using Aadhaar would continue.

According to officials, the new ITR-1 has been made simpler by the columns together for all the deductions and the details with respect to the assets and liabilities.
The new ITRs has been launched on 1st of April 2017 while keeping in mind the push of the Central Board of Direct Taxes and the department, that the timely filing of income tax returns is important for enhancing the non-disturbing yet information-driven approach to improving tax compliance and efficient utilization of information for tax administration.

That’s not all- There are some other changes too in Income Tax Return Forms

1. Enrollment No./ Aadhar No./ is mandatory for all the ITRs. For a partnership firm, Aadhar number of all the partners is required be provided.
2. New column have been inserted in the income tax return forms for report unexplained income.
3. New Column has been inserted in the income tax return forms for the dividend income in “Schedule OS”. The new column is inserted for reporting the dividend income up to INR 10 Lakhs and LTCG (Long Term Capital Gain) exempt  under section 10(34),10(38) respectively.
4. A new field is provided in the new income tax forms for the deduction u/s 80EE that allows the deduction for interest on home loan for first time home buyers.
5. The government has inserted a new schedule which requires an individual and HUF for declaring the total value of Assets and Liabilities in case the total income is more than INR 50Lakhs.
6. The taxpayers are now required to reveal the address of any immovable property and also the description of the movable properties under the revised income tax return forms. Moreover, a new field is introduced for disclosing Interest held in the assets of AOP or a firm as member or a partner.
7. A taxpayer under the presumptive taxation is not required to maintain books of accounts that implies they need to pay tax on the profit calculated on the gross turnover.

(a) In the F.Y 2016-17 if an assesse whose income is less than INR 2 Crore, a column is inserted in the new ITR for reporting the income at the rate of 8 percent of the turnover which is realized in cash and 6 percent for the turnover which is realized via digital receipts.

(b) In the new ITR-4 form, a new column is inserted that shows the option for availing the presumptive taxation scheme for the professionals having total receipts of less than INR 50 lakhs u/s 44ADA. ITR-4 that is now relevant for the taxpayers who have opted the presumptive taxation scheme, the form has a new column under Schedule TDS-2 for showing the receipts as mentioned in the form 26AS.

8. In case of the trusts it is now compulsory for mentioning the internal audits which is conducted under other act in the form ITR-7. Likewise details are required to be reported about the usage of funds toward charity or capital purpose.

Re-Introduction of Raid -Raj- a reminiscent of Indira Gandhi Times

9. The tax officials are more powerful than ever. Effective 1st of April, the income tax officials will have the right for raiding anyone by providing any reason. The department officials could also confiscate property that is not subject to raids according to latest provisions which received the legislative approval when the Parliament recently passed the Finance Bill.

The Bill at present is with the President of India and is in the anticipation of his nod. The new provisions will have the assent and would come into force from 1st April 2017. Once these new regulations are in effect, the tax officials would have the right for raiding the properties even where the charitable events are taking place.

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