5 changes you should be aware of while filing tax returns

Filing Income Tax Returns (ITR) isn’t anybody’s idea of “fun”. But every year this chore is getting lighter. Like every other year, this year too the government has made changes to its ITR forms. Even if you are not a Do-It-Yourself kind of person and would rather delegate the task of filing returns to a chartered accountant or a Tax Return Preparer (TRP) or prefer using online e-filing portals, this information will definitely come in handy.

More than Rs 10 lakh: The biggest change which came this year as far as filing of returns go is with compulsory e-filing. Unlike prior years, where it was mandatory only for firms and companies to e-file the ITRs, going forward, it’s mandatory for many more people to do so. Says Parizad Sirwalla, Partner (Tax), KPMG: “It is now mandatory for people with more than Rs 10 lakh of total income to file their ITRs online.” So, if you are someone who falls in this category, you can e-file your ITRs at the tax department’s website or use portals like Taxspanner.com, Taxsmile.com or Myitreturn.com, to name a few. (The direct efiling site url is: https://incometaxindiaefiling.gov.in)

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[caption id=“attachment_422177” align=“alignleft” width=“380”]  The biggest change which came this year as far as filing of returns go is with compulsory e-filing[/caption]

Keep in mind that you won’t need to digitally sign your ITR forms. You can still use the traditional method of physically signing the paper ITR-V (the online acknowledge you get after the returns are filed) and send it to the Income Tax office in Bangalore.

Assets abroad: The next change is applicable to you if you have any kind of foreign assets. Going forward, you too will have to e-file your returns. Say Anil Rego, CEO and founder, Right Horizons, an investment advisory and wealth management firm: “Resident assessees having assets located outside India have to e-file their returns.” This applies even if your total income is less than Rs 10 lakh. Rego adds: “The definition of foreign assets is very abroad. It could be a savings bank account you hold abroad or some immovable property and the like.”

Even if you have a signing authority in any bank account located outside India or you have financial interest in any entity (hold stocks, bonds, or a partnership of any kind) you will have to take the e-filing route. Take note that you will have to provide details of all foreign assets on the form. So, it’s better you keep those documents handy before you begin the e-filing process. If you look closely, you will realise that this change is through the addition of a new schedule in the ITR2 and ITR4 forms.

Share in house property: Ankur Sharma, CEO, Taxspanner.com, says, “Information related to the percentage of share of the assessee in co-owned property is mandatory. In case the property is co-owned, then the assessee needs to furnish the name of the co-owner, his or her PAN and percentage of share of the other co-owner in the property.” These changes can be seen in the ITR2 and ITR4 forms. So, keep your property documents and PAN details handy while filing the returns.

Donations: Until assessment year 2011-12, you were supposed to give details of only the amount of deduction claimed under section 80G when you made a donation to an authorised charitable organisation. Going forward, you will need to provide some finer details as well. Not only the name and address, but also PAN number of donee organisation, along with the amount you donated and deduction you’ve claimed under section 80G. You can see this change in ITR1 and ITR2 as a new schedule.

Worked abroad: If you are someone who has worked abroad for some time and paid income tax in that country and are looking for tax relief here in India, be ready to give more details. Says Sharma, “While an assessee had to declare only the tax relief claimed till last year, he or she will now have to furnish additional details. These include the name and code of the country visited, income earned, tax paid and tax identification number in the respective country under section 90, section 90A or Section 91.” This change can be seen in the forms ITR2 and ITR4 as an additional schedule.

ITR forms going forward need more detailed information. Rego says, “What the IT department is trying to do is create a cross reference, so they can spot any kind of tax avoidance practices.” We suggest, you take these changes very seriously. Even if you’ve been a student abroad last year and opened a savings account and never bothered to close it after coming back to India, it’s best you mention this on the form. If you are someone who isn’t well-versed with filing returns, we suggest you take the help of a tax professional or tax portal to ensure you get it right. After all what was supposed to be an easy task, going forward the task has only become more cumbersome.