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Tuesday, July 7, 2015

This form you should use to file your income tax return

Have some time spare to file your income tax return!For our readers,this content I post thanks to moneycontrol .com.Hope that it would be quite a guide who happen to be a little confused.We depend on our old lawyer Singh Saheb though and would file the returns consulting him only.IT returns should be on topmost priorities these days.
Palash Biswas
Here you are!

This form you should use to file your income tax return

This form you should use to file your income tax return© Moneycontrol.com This form you should use to file your income tax return

Balwant Jain

So the new income tax forms have been notified by the government. This came after the forms notified earlier in April were withdrawn due to huge protest by the tax payers. Let us now understand the latest requirements as to the forms which you are required to file. I also intend to discuss other relevant matters relating to additional disclosure on bank accounts and foreign travels as originally proposed and modified as per these modified ITR forms.

The government has notified four forms for filing of your income tax returns which are applicable to individual and/or HUF. Let us discuss as to which form you need to file?

Form No ITR 1: This is also known as Sahaj meaning easy. This form can only be filed by an Individual and no other assessee can use this form for filing of their return of income. It is not that every individual can use this form. This form can only be used by a person whose source of income is salary and not business. Even pensioners can use this form. Moreover you can also use this form in case you have any income under the head income from other sources which generally includes interest from various investment products like saving bank account, recurring bank account, fixed deposits with bank and post offices. This form can be used by you even if you have any exempt income in addition to the taxable income from two of the sources discussed above. You cannot use this form in case your agricultural income exceeds Rs. 5,000 in the previous year as the same need to be added to your regular income for the purpose of determining the average rate of tax on which your other income shall be taxed. So you can use this form even if your other exempt income exceeds the threshold of Rs. 5,000. Earlier there was a cap of Rs. 5,000 of exempt income for using this form.

Please note that if you have won any lottery or have any income from horse race in the last year, you cannot use this form. Moreover you can use this form only if you own one house property, so in case you own more than one house, you cannot use this form. This can also not be used in case you have any asset outside India or any income from a source outside India.

In my opinion this is the forms which would be applicable to majority of the tax payers as most of the tax payers are salaried and do not own more than one house property and have only income taxable under the head "Income from other sources" in addition to receiving either salaries or pension.

Form No. ITR 2A : This is a new form introduced from this year. This form can be used by Individual as well as an HUF unlike the form ITR 1 which can only be used by an Individual and who does not have any taxable income under the head "profits and Gains or business or Profession" or "capital Gains". Moreover in case you have any foreign asset outside India or have income from any foreign source you still cannot use this form for filing of your income tax return. It may be noted that you can use this form in case you have more than one house property or have agricultural income exceeding Rs. 5,000. This form is extended version of form No. ITR1 and can be used only if you either do not have business income or capital gains as well as do not own any foreign asset or have foreign income.

Form No ITR 2: This form can be used by Individual as well as an HUF. This form can be used in case you have income taxable under the head Capital Gains in addition to the income taxable under the head "Salaries" and "Income from other Sources". This form can be used by you even in case you have income from lotteries and horse races. This form can also be used by you in case you have agricultural income exceeding Rs. 5,000 or you own more than one house property. However this form cannot be used by you if you have any income taxable under the head "Profits and gains of business or profession" howsoever small the amount taxable under this head.

This form can even be used by the resident tax payers who have any foreign asset or any income from foreign source.

Form No. ITR 4S: This is commonly called Sugam. This form can be filed by any individual or an HUF who has business income which is taxable at certain predefined basis either as certain percentage of your gross receipt/sales or your income is presumed at fixed amount per income yielding asset owned by you like truck etc. So this form can be used, only and only if, your business income is taxable on some presumptive basis. Broadly speaking this form can be filed by a person who is otherwise entitled to file his return of income in ITR 1 but cannot file as he has certain business income taxable at predetermined way. So in case you have capital gains income or agricultural income exceeding Rs. 5,000 or own any foreign asset or have income from any foreign source you cannot use this return to file your return of income. You cannot use this form even if you have income from lottery or horse race.

Requirement of disclosure in respect of passport and bank accounts

The forms notified earlier had provisions for disclosure of foreign travels undertaken with details of expenses incurred by you. However the revised forms have done away with this requirement and you are only required to give details of your passport number.

As regards the other requirements of furnishing details of your bank account the earlier forms had requirement to furnish details of all the bank accounts held during the previous year including the particulars of joint holders and closing balances in those bank account. The revised forms have the requirements to furnish the details of only active bank account and in case there are no transactions in the bank account during the last three year, you do not have to furnish the details of such dormant bank accounts. Moreover you are not required to furnish the details of balances at the year end and the details of the joint holder of the accounts.

However, you are still required to furnish the details of the bank name, IFSC code and account number of all your bank accounts whether saving or current account. It seems you are not required to furnish details of your recurring account or fixed deposits with banks held by you during the year.

The forms to be used by the person who has taxable income under the head profits and gains of business or profession other than on presumptive basis are not yet notified for the current filing.

I am sure the above discussion will help you in determining which form you need to use for filing of your income tax return.

Balwant Jain is a CA, CS and CFP. Presently working as Company Secretary of Bombay Oxygen Corporation Limited. He can be reached at jainbalwant@gmail.com

http://www.msn.com/en-in/money/personalfinance/this-form-you-should-use-to-file-your-income-tax-return/ar-AAc2l3z?ocid=UP97DHP

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