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2. Every year Income Tax Forms (commonly known as ITR)
are issued afresh valid for a particular assessment year.
The new ITR Forms released by the Income Tax
department would see various changes in the return to be
filed for FY 13-14 (AY 14-15). At the very outset the
department requires transparency of transactions made
by the taxpayers at each level of tax avoidance.
The new Form also brings in few features which will
remove certain difficulties faced by taxpayers.
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3. Key Changes Noticed In New ITR Forms
All Tax Refunds through ECS only:
Now all the Refunds will be E-Refunds. No refund will be granted by
Cheque or DD.
Claim Rebate under section 87A:
The new ITR Form has a provision to claim rebate under section
87A. Resident Individuals whose total income is not exceeding Rs.
500,000 is eligible to a rebate which will be lesser of 100% of
income-tax or Rs. 2,000.
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4. Key Changes Noticed In New ITR Forms Cont…
Unclaimed Credit of Taxes Deducted at Source (TDS) / Taxes
Collected at Source (TCS) Brought Forward and Carried
Forward:
Assessee’s are required to deduct tax at source on cash or accrual
basis, whichever is earlier. Therefore, if someone is raising an
invoice is also required to make advance payment of TDS. The
previous ITR forms did not provide any such feature to carry
forward the excess TDS. However, the new forms provide for details
to be entered in respect of unclaimed TDS / TCS of the earlier tax
year(s) and unclaimed TDS/TCS of the present tax year to be carried
forward to the subsequent year.
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5. Key Changes Noticed In New ITR Forms Cont…
Every Company or LLP has to provide Unique Identification
Number issued by MCA:
The new ITR Forms now requires Companies and LLP’s to provide
their CIN and LLPIN in their returns. The Directors & Designated
Partners details along with their DIN and DPIN are also required to
be furnished in the return.
Provide Debtors PAN for claiming Bad-debts:
For Claiming Bad Debts by assessee, PAN of Debtors has to be
provided.
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6. Key Changes Noticed In New ITR Forms Cont…
Certain payments to non-resident to be disclosed separately:
The new ITR Form requires Individuals to separately disclose
payments made to non-residents in regard to Compensation,
Commission, Royalty, Professional/consultancy fees/Fee for
technical services and Interest.
ITR-5 for private discretionary trust:
A trust where discretion is there among the trustees over the use of
its income and capital are known as Discretionary Trust. The new
ITR-5 Form now allows such trust to file their return of income. It
gives trustee the power to decide which beneficiary would receive
the funds and up to what extent.
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7. Key Changes Noticed In New ITR Forms Cont…
To report buy-back of shares:
A schedule has been inserted in the newly prescribed forms which
mandate Indian corporate taxpayer(s) to disclose necessary
information in respect of buy back of unlisted shares and tax paid
thereon.
Cyprus Transactions to be reported:
The transactions enter with the entities in Cyprus, a non-co-
operative jurisdiction, is required to be reported to claim any
deductions on expenditure and payments made. The new ITR Form
requires prescribed information to be furnished for transactions in
Cyprus notified under section 94A.
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8. Key Changes Noticed In New ITR Forms Cont…
New computation of Capital Gains:
The forms provide an upgraded new schedule for computing gains arising
from transfer of capital assets in each of the prescribed categories.
Additionally, information in respect of intra head adjustments of capital
loss also needs to be disclosed in the newly prescribed form.
Sale of Land and Building involving Stamp Duty Valuation to be
disclosed:
Any gains under the head ‘Profits and Gains of Business or Profession’
under section 43CA on sale of land or building with respect to its stamp
duty valuation shall be reported in the new ITR Form. The Finance Act
2013 provided that in computing business income from transfer of land or
building, stamp duty ready reckoner value should be adopted in case the
actual transaction value is less than the former. The newly prescribed
forms provide disclosure in respect of such ready reckoner value which
exceeds the actual transaction value.
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9. Key Changes Noticed In New ITR Forms Cont…
Non-Deductible Business Expenditure to be
reported:
In the newly prescribed forms, information in respect of the
following non-deductible business expenditure has been
inserted:
1. Contribution to pension schemes
2. Amount of securities transaction tax
3. Expenditure of capital nature and
4. Expenditure not wholly for the purpose of business or
profession.
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10. Conclusion
The Income Tax department is in pursuit of collecting
information from taxpayers to the maximum and this
might be a step towards start of exchange of
information amongst various departments of
government.
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