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Everything you need to know about new ITR Forms

Income Tax Department has introduced New ITR Forms for Financial year 2016-17.

Main Objective behind introducing these changes :

  • Simplifying the complex tax return system
  • Increasing the number of taxpayer in the country
  • Reducing the compliance burden on the tax filers

Changes made in the new ITR Forms-

New ITR Forms:

  1. The number of ITR Forms reduced from nine to seven for the F.Y. 2016-17 filing.
  2. The old ITR 2, 2A and 3 gets merged into a single ITR form as ITR 2.
  3. The old ITR 4 now renumbered as ITR 3
  4. Old ITR 4S (Sahaj) also renumbered as ITR 4 (Sugam).

Mandatory quoting of Aadhar No. in all ITR Forms:

  1. When a person does received Aadhar Card but applied for the Aadhaar card then he can quote Enrollment ID of Aadhaar application Form in the ITR.
  2. In new ITR 5, firms also required to Quote Aadhaar number or Aadhaar Enrollment ID of their Partner/members.
  3. In new ITR 7, trust needs to specify the Aadhaar number or Aadhaar Enrollment ID of Author(s) / Founder(s) / Trustee(s) / Manager(s), etc.

Disclosure of cash deposits during demonetization:

To report on cash deposited by taxpayers in their bank accounts during the demonetization period, i.e., from November 9, 2016 to December 30, 2016, new columns are added in all ITR Forms However, taxpayer also required to fill up this column only if they have deposited Rs 2 Lakh or more during the demonetization period.

Specific Changes in ITR 1:

  1. The Govt. notified a simplified one- page form ‘ITR-1 Sahaj’ for individuals
  2. IT department removed the less frequently used columns from ITR 1.
  3. Out of 20 columns of deductions only 4 columns of deductions like section 80C, 80D, 80G and 80TTA retained in ITR 1. In case you want to claim any other deduction you can specify under ‘Any Other’ column.
  4. To make ITR 1 shorter and simpler, schedules of TDS and TCS merged into One
  5. Income Tax Department inserted new columns to report dividend income and long-term capital gains exempt under Section 10(34) and Section 10(38) respectively.

Specific Changes in new ITR 2, 3, 4:

  • A new field of Section 80 EE under Schedule VI-A(Deductions) have been added. Section 80EE allows deduction on home loan interest for first time home-buyers. This deduction is over and above the Rs 2 lakhs limit covered under Section 24(b).
  • Compulsory declaration of value, cost/declaration of assets and liabilities by Individuals/HUF earning above Rs 50 lakhs. Tax payers required to mention cost of immovable property, jewellery, bullion, vehicles, shares, bank and cash balance etc. Even address of immovable property and description of movable assets and some other details are also required to be disclosed.
  • Addition of new field for disclosure of ‘Interest held in the assets of a firm or AOP as a partner or member’. Such members/partners also required to disclose name, address, PAN of the firm or AOP.

Specific Changes in new ITR 4 (old ITR 4S):                  

  • New columns added in new ITR 4 to show turnover received through digital mode & non-digital mode. As per Budget 2017 Net Profit/Income on the basis of , Turnover under section 44 AD now proposed to be reduced from 8% to 6% of Turnover for digital receipts of taxpayer.
  • An option to avail presumptive taxation scheme for professionals under Section 44ADA introduced by the Finance Act, 2016. Columns for this like gross receipts and profit been inserted in ITR Form.

This article was first published on Tax2Win.in

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