Get ready to file more details in new ITR forms

Heightening its vigil on unreported income, the government introduced more than two dozen changes in the new income tax return (ITR) forms for financial year 2018-19.

In the forms which were notified by the CBDT on Friday, even a taxpayer in the lowest bracket will now have to give details of his/her residual sources of income, allowances and other profits besides his/her taxable salary.

The residual incomes, known as ‘other sources of income’ in the ITR forms, were earlier bunched together for an ITR-1 user, whose income is up to Rs 50 lakh from salary and has a house property besides other sources of income.

There are approximately three crore taxpayers in this group, who will now have to select from a drop down in the form and write the exact income against each one of the ‘other sources’.

Other sources of income include income from lotteries, prize money, interest incomes from savings and fixed deposits, family pension and gambling.

Officials said the government seeks to get a handle on almost all sources of a tax payer’s income essentially to weed out the well-off from paying minimum tax and ensure better compliance.

On the sale of property, the new rules require furnishing information about the buyers as well. Till last year, only sellers’ information was required to be reported at the time of filing tax returns. The move is expected to make property transactions more transparent.

“Taxpayers need to give specific details about the capital gains too. It is making the system more transparent,” said Archit Gupta from Clear Tax.

From now on, investors buying unlisted equity shares will have to disclose their holdings.

Other new details required are information on number of days of residency in India and quoting tenant’s PAN in case of the TDS.

ITR-1 comes with an option of standard deduction. While filing ITR, the maximum amount of standard deduction that can be claimed by an individual is Rs 40,000 for the financial year 2018-19.

ITR-4, meant for small businesses such as shop owners and for professionals such as doctors seeks more disclosures than last year. The old ITR-4 sought only four details — total creditor and debtors, total stock-in-trade, and cash balance.

But the new form asks for more financial details of the business such as the amount of secured and unsecured loans, advances, fixed assets, capital account and so on. Gupta said, in the wake of GST, the new details became essential as every small business required to maintain balance sheet.

Similarly, ITR-6 meant for businesses, now seeks certain details about GST too. Changes have also been made in ITR-2 and ITR-3.