WHAT YOU NEED TO KNOW about the new rules for filing your ITR….

By | 21 July 2015

New Return forms, Additional information, Paperless filing…. the income Tax Department has iFinal Picntroduced several changes, and all at the same time, in the way you need to file your returns this year. As a taxpayer you need to be aware of these changes lest you file an incorrect return that gets rejected or results in a scrutiny notice.

Our week’s article looks at the changes in the ITR filing process and explains what You need to do, this year.

Many taxpayers tend to believe that if they had already paid all taxes, they need not file their returns. For such tax payer, here is the enlightment – www.xpertconsulting.biz/file-itr-employer-deducts-tds.html

Now let’s share with you at the major changes in this year’s tax filing rules:

Deadline Extended to 31 Aug 2015
The due date of filing ITR has been extended to 31 Aug 2015, so you have about six weeks to file your return. But it’s best not to delay the process unnecessarily. If you have got all your documents (Form 16 from employer, bank statement, TDS details, capital gains statement) in place, file your return as soon as possible and get over with it. Why delay something that you cannot avoid.

New ITR forms
The Public outcry against the mandatory disclosures of foreign trips and dormant bank accounts in the new ITR forms has forced the government to revise them. The revised forms are much simpler and taxpayer friendly. But though you won’t have to fill a 14-page return, the new forms have retained some of changes proposed earlier.

A new three-page ITR 2A form has been introduced for individuals and HUFs who may own more than one property, but do not have any taxable capital gains, income from business or profession or foreign asset and income outside India. new rules for filing your ITR

ITR-1 (Saral) can now be filed by individuals even if they have exempt income. Earlier, individuals were not allowed to use this form if they had exempt income exceeding Rs 5,000. However, individuals having agricultural income exceeding Rs 5,000 will still not be able to use Form ITR-1. new rules for filing your ITR

Click here to read our article on which ITR form to choose for filing your ITR.

E-filing scope widened
The scope of Electronic filing of ITR has been further widened and now it is now mandatory for taxpayers who are claiming a refund. Even if their income is below Rs 5 lakh, they still need to take the online route.

However, e-filing has its own benefits. E-filed ITRs get processed faster and the refund gets credited early and goes directly into your bank account. The taxpayer can also track the status of processing of his tax return online.

Property and capital gains under the lens
The new forms also segregate the columns for ‘deemed-to-be-letout’ and ‘let-out’ status of property. So, make sure you pay tax for the second house even if it is lying unoccupied. You are liable to pay tax on the notional income based on the prevailing rent in that area.

In case of sale of property, pay the capital gains tax carefully as the new forms seek year-wise particulars regarding any unutilised amount lying in capital gain scheme account to check for long and short-term gains.

If the property is situated outside India, the new forms require disclosure of such income in the Schedule FSI.

Capital gains now need to be reported separately based on the tax rate applicable on you. If you have deposited any amount in capital gains account scheme, you will have to mention the year in which the asset was transferred, section under which exemption was claimed, year in which the new asset was acquired and the amount utilised out of capital gains account scheme to acquire the new asset. You also need to mention the balance amount in the account.

Foreign income and assets
The revised forms contain a lot of questions regarding foreign income and assets. You need to give the details of foreign income (amount, nature of income, taxability, country where it was earned, name and address of employer).

If you claimed relief under a Double Taxation Avoidance Agreement (DTAA), you will have to mention details in the return.

Similarly, if you own a property outside India, details like nature of ownership (direct or beneficiary), date of acquisition, income derived from such property and income offered to tax in the return will have to be specified.

Similar details for any financial interest held in a foreign entity will also be required to be declared. Apart from owners, even beneficiaries of assets held outside India or any income generated from the assets will have to report such ownership in their ITRs.

Paperless e-filing now easier
From this year, e-filing will become truly paperless for a large majority of the taxpayers. Till now, after e-filing of your tax return, you need to send the signed ITR-V form to the Centralised Processing Centre in Bengaluru. The objective was to establish the identity of the taxpayer. Now, the identity returns can be verified electronically by generating an electronic verification code (EVC).

The 10-digit EVC is an alpha-numeric code which will be unique for each PAN, and is an electronic verification of the person e-filing the tax. This will make the procedure truly paperless.

From this year, the ITRs will also have a space for Aadhaar card holders to mention their Unique Identification Numbers. The Aadhaar is one of the four ways in which the identity of the taxpayer is verified. Of course, if you don’t want to use this mode you can still send your ITR V to the CPC by snail mail.