As an attempt to simplify the tax filing process and reduce the compliance burden on the taxpayer, The Central Board of Direct Taxes (CBDT), or the regulator of income tax, has reported the simplified new income tax return forms for the assessment year 2017/18.
Major changes have been made to the past complex method of filling out the income tax return form, but now it has been transitioned to a relatively easier process. One can now go on with the filing of their income tax return form online by just logging in to the official website of the income tax department.
Why Is It Necessary to Link one’s Aadhar to Their Tax Profile
With effect from July 1, 2017, it has become mandatory for taxpayers to link their Aadhaar and Permanent Account Number (PAN) for filing an Income Tax Return. The department of income tax is sending e-mails and texts to taxpayers requesting them to link their Aadhaar numbers with PAN for simple income tax filing of returns.
Although, taxpayers are still facing numerous problems in connecting Aadhaar and PAN due to numerous reasons, such as a mismatch in date of birth, name, non-update of a phone number in the database of Aadhaar, etc.
Changes in the Income Tax Return Form Filing Procedure
The government implied various changes which a resident of India, moreover a taxpayer should know about.
- The New ITR- 1 (Sahaj) This income tax return form is a one-page form, and it can only be filed by an individual with an income of up to INR 50 lakh per year. This list comprises of salaried income, income from one house property and interest income. Those who have an income of more than INR 50 lakh or own more than one house property will have to file ITR – 2 Forms.
- In order to account for those who have put around INR 2 lakh or more in a bank account in the period of demonetization, the tax department has introduced a new column in which the person filing the tax will have to provide details of the bank account and money deposited. If a person has deposited INR 2 lakh or more, he or she will mention the IFSC code, name of the bank, account number along with the amount deposited in the income tax return.
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During the time in which demonetization started in India, it was said by the concerned authority, and it appears that probability to receive notice for cash deposit would be smaller in the case where a deposit of cash amount is smaller than INR 2.5 lakh that is the exemption limit. Now with this modification that is in addition to the column of “cash deposit where the amount is INR 2 lakh or higher”, it appears that chances of receiving a notice is increased to explain the source of income despite the fact that the said assesses is having income less than INR 2.5 lakh in current year.
- Now, mentioning an individual’s Aadhar number is compulsory for filling income tax return. One has to mention their twelve digit Aadhaar number or their twenty-eight digit Aadhaar number of enrolment while completing the income tax return. Until last year it was non-compulsory to refer the Aadhaar number while filing the return whereas now it’s a compulsory field.
- The asset and column of liability have now been detached from ITR- 1 (Sahaj) form for Income Tax Return Form. Earlier an individual having an income higher than INR 50 lakh per year had to declare liabilities and assets while filling the tax return. It has been removed from the ITR-1 as now an individual with an income of INR 50 lakh cannot file ITR-1. Remaining all the other forms continue to have the liability and asset column to be fulfilled.
- The quantity of income tax return forms has been lessened from the previous nine to a much less complex seven now. The old ITR-2A, ITR-2, and ITR-3 have been done away with and merged with the new ITR-2. ITR -2A was earlier filed by those owning more than one house property. Whereas ITR-3 was filled by those with income from profession and business. ITR 2 was filed for those with more than one house property in addition to capital taxable gains tax. Now, if one has more than one house property, taxable capital gains tax or revenue from profession and business, then they will have to file new ITR-2 Form.
As the ITR 3 and ITR 2A and no longer exist, the earlier ITR-4S (Sugam) and ITR-4 have been renumbered as ITR-4 (Sugam) and ITR-3 respectively.
Consider This before Filing the Income Tax Return Form
One should take into consideration a few things while filling out the income tax return forms. If the same mobile number or email address is used for more than four taxpayers, one cannot file returns on the website, unless the required changes are done.
For example, in some cases, higher than five returns could be filed for income tax return forms, the asset holder, his wife, his mother, mother-in-law, and the HUF (undivided Hindu family) of which you are the karta, or the executor of a will. Moreover, if the name of the taxpayer is mentioned in his bank documents or his official statements is even somewhat different from the one provided in the PAN card, the portal will see him as a different individual.
In certain circumstances, some individuals give their father’s name as their ‘middle’ name in their PAN card but do not use it for their bank accounts. And if a non-resident Indian has to file income tax returns, he will need both an India number and a foreign number.
Click here and download all kinds of Income tax return forms.