With the IT department sharpening its scrutiny, get ready to share more details about your finances!
In the coming months, the government expects you to furnish more details about your finances and business when filing for Income Tax.
In the new forms released by the Central Board of Direct Taxes for the financial year 2017-18, you will see several new columns ranging across all categories of taxpayers—Sahaj (ITR1), Form ITR-2, Form ITR-3, Form Sugam-ITR-4, Form ITR-5, Form ITR-6, Form ITR-7, and Form ITR-V.
Why is the government asking its citizens to furnish more details?
According to this Economic Times report, information ranging from allowances of salaried persons that are not tax-exempt, to tallying direct and indirect tax sums of any engaged in any legal business venture, the IT department is looking to prevent tax evasion at multiple levels.
“There are more than 25 key changes in the new ITR forms. Some of these changes clearly suggest that the focus of new ITR forms is to get more information from unlisted companies, trusts and taxpayers who have opted for presumptive taxation scheme. The ITR forms will also require business entities to report GST transactions which would help the department to independently reconcile the transactions reported by them in income-tax return and GST returns,” said Naveen Wadhwa of Taxmann.com to the Economic Times.
These are some of the additional information you and your business will have to submit to the taxman:
1) Businesses will have to submit the Aadhaar numbers of their members and partners. Trusts will also have to furnish the Aadhaar numbers of related functionaries.
2) Under ITS-4, those with businesses will also have to submit their GST registration number and the turnover. By tallying direct and indirect tax figures, the IT Department seeks to check tax evasion. This is probably one of the more critical details.
3) Firms have to release details of income generated from the property.
Also Read: Only 1.7% of Indians Pay Income Tax, but Not for the Reasons You Think
4) Quality chartered accounts offer you the best way to save on your taxes. The government, however, wants to strengthen checks on them and you will now have to submit the registration number of the firm or chartered account auditing your books for the tax return.
5) Under the new Sahaj form, specific details pertaining to salary require disclosure. “It seeks an assessee’s salary details in separate fields, and in a breakup format such as allowances that are not exempt, the value of perquisites, profit in lieu of salary and deductions claimed under section 16. Though these details are provided in the Form 16 of a salaried employee, they now have to be mentioned on the tax return for clarity of deductions,” reports Business Standard.
Also Read: The Budget Effect On Income Tax: New Rules That Come Into Effect From April
Who is eligible to fill the new Sahaj form?
According to the Economic Times, those with an income up to Rs 50,00,000 will have to reveal the following sources:
a) Income from property such as gross rent received
b) Receivable/letable value
c) Tax paid to local authorities
d) Annual value
e) Interest payable on borrowed capital
f) Income chargeable under the head house property
Additionally, Non-Resident Indians (NRIs) will now fill their tax returns and furnish more details using the ITR-2 form instead of the earlier ITR-1. Among others, the taxman seeks information pertaining to one foreign bank account for refund purposes.