New, simpler I-T returns forms are just 3 pages: Here's what they mean for tax-payers

The finance ministry has given in to popular pressure and removed a few controversial requirements from the new income tax returns filing forms on Sunday. It has also extended the deadline to 31 August. The new ITR forms have 3 pages and are a lot simpler than the earlier one, which asked for details of the assessee like overseas travel. As per the new ITR, the assessees need to only give their passport number as also the details of their active bank accounts. The main ITR form will not contain more than three pages, while ‘other information’ will be captured in the “schedules” which will be required to be filled only if applicable. [caption id=“attachment_2272486” align=“alignleft” width=“380”]  ThinkStock[/caption] These ITRs will replace the 14-page form that were notified earlier this year, triggering a major controversy with individuals, industrialists and MPs saying the tax filing would become cumbersome as those forms sought unnecessary details including foreign trips and bank accounts. It was supposed to come into force this year, in place of 12-page ITR forms that had been in use in previous years. Finance Minister Arun Jaitley had ordered putting these forms on hold following the controversy. The changes have been made after a review by the government of the return forms post responses received from various stakeholders on Income Tax (I-T) forms. “It is appreciated that the government has set up expectations on the timelines, extended the due date and has taken stakeholders concerns into consideration in their endeavour to simplify the forms,” Tapati Ghose, Partner, Deloitte Haskins & Sells. Here’s a decoder for the tax-payer’s perusal: 1) Deadline extended: The move is possibly aimed at giving more time for individuals to prepare and file their tax returns after the e-filing version of the returns are available in about 3 weeks from now, said Ghose. Another reason is that the extended deadline also buys time for the government to put in place the software for new forms, which is currently under preparation. 2) Foreign travel: The biggest relief for the assessee is on this front. Tax-payers who have travelled to foreign countries in 2014-15, need not disclose the details of these trips. This was considered cumbersome as in the case of residents, even the expenses incurred thereon were to be mentioned. The tax-payer just needs to disclose their passport number in the new ITR. 3) For foreigners: A foreign citizen who has come to India on business, student or employment visa would not be required to report the foreign assets which were acquired by her during the period when she was a non–resident in India. “This may not really be a reprieve to many as the condition for relief from reporting is only in cases where no income is derived from such assets during the current year. Accordingly, the exemption seems to be only in the case of non-revenue generating assets in the current year,” says Ghose. 3) Bank accounts: In the new ITRs only the IFS code and account number of all bank accounts which are held at any time during the previous year need to be provided. There is no need to mention the bank balances and other details as was earlier proposal. Also, you need not give the details, if the account has remained dormant for the last three years. “This is a major relief for those who have bank accounts with minimal balances – the IFSC code could be easily sourced from the websites of the banks,” Ghose said. 4) ITR-2A: As of now, individuals/Hindu undivided families (HUF) having income from more than one house property and capital gains are required to file a Form ITR-2. But a majority of individuals/HUFs who file this form have no capital gains. The finance ministry no has a new ITR-2A. According to Ghose, the new form is simplified and can be filed by an individual or HUF who does not have capital gains, income from business/profession or foreign asset/foreign income. Moreover, in the ITR 2 and the new ITR 2A, the main form will not contain more than 3 pages. All other information will be captured in the Schedules. The big relief here is that these will be required to be filled only if applicable, notes. 5) Sahaj: Individuals having exempt income will be entitled to file the ITR1 – Sahaj. There will be no ceiling for such exempt income. It is expected that other conditions to be satisfied for the ITR1 will continue to remain.