Recent Changes in Income TaxForms & Efiling

********************************************Organised by:

Dahisar CPE Study Circle of WIRC of ICAI

********************************************

By

CA. NIMESH DEDHIA

Recent Changes in Income TaxForms & Efiling

********************************************Organised by:

Dahisar CPE Study Circle of WIRC of ICAI

********************************************

By

CA. NIMESH DEDHIA

Key Changes in New ITR Forms(AY 2014-15)

• Schedule – TDS2 : Details of TaxDeducted at Source on Income [As perForm 16 A issued by Deductor(s) or Form26QB]

• Schedule – TDS2 : Details of TaxDeducted at Source on Income [As perForm 16 A issued by Deductor(s) or Form26QB]

[ITR 1, 2, 3, 4, 5, 6, 7]

Initiative for Speedy refund of taxes: Refund tobe credited to bank account only

• Earlier taxpayers had an option to claim refundof tax through cheque or credit into its bankaccount.

• As per new forms, facility of getting refund viacheque has been dispensed with and assesseeshall get credit of refund of taxes directly into hisbank account.

• Earlier taxpayers had an option to claim refundof tax through cheque or credit into its bankaccount.

• As per new forms, facility of getting refund viacheque has been dispensed with and assesseeshall get credit of refund of taxes directly into hisbank account.

[ITR 1, 2, 3, 4, 5, 6, 7]

• Domestic Company or LLP shall mention a uniqueCorporate Identity Number (CIN)/LLP identificationnumber ('LLPIN') issued by the MCA in the tax returnfiled in new ITR form.

Unique Identification Numbers issuedby MCA to be reported in ITR Forms:

[ITR 5, 6]

Unique Identification Numbers issuedby MCA to be reported in ITR Forms:

• DIN for the Director in Company & DPIN for theDesignated Partner in LLP to be mentioned.

[ITR 5, 6]

Buy-back of shares to be reported byclosely held company

[ITR 6]

Furnish PAN of debtor responsible for bad-debts• Every person claiming deduction of bad debts is required

to specify PAN of the debtor, if available, responsible forbad debts. This requirement is specified if quantum ofbad debts is Rs. 1 lakh or more.

• Such requirement was already available in old Forms ofITR 5 and ITR 6. It is now introduced in ITR 4.

[ITR 4]

Upgraded computation sheet for Capital Gains:

• New Schedule on Capital Gains provides for adetailed mechanism for computation of capitalgains. Major takeaways from Schedule CG areas under:

• New form provides additionally for computationof short-term capital gains in following cases:(a) Sale of land or building or both as perprovisions of section 50C, i.e., full value ofconsideration viz-a-viz stamp valuation.(b) Sale of securities by FIIs which is taxable asper provisions of section 115AD

• New Schedule on Capital Gains provides for adetailed mechanism for computation of capitalgains. Major takeaways from Schedule CG areas under:

• New form provides additionally for computationof short-term capital gains in following cases:(a) Sale of land or building or both as perprovisions of section 50C, i.e., full value ofconsideration viz-a-viz stamp valuation.(b) Sale of securities by FIIs which is taxable asper provisions of section 115AD

• New form provides additionally for computation oflong-term capital gains in following cases:(a) Sale of land or building or both as per provisionsof section 50C, i.e., full value of consideration viz-a-viz stamp valuation.(b) Sale of bonds or debentures (other than capitalindexed bonds issued by Government).(c) Sale of bonds or GDRs by a non-resident whichis taxable as per provisions of section 115AC.(d) Sale of securities by FIIs which is taxable as perprovisions of section 115AD

• New form provides additionally for computation oflong-term capital gains in following cases:(a) Sale of land or building or both as per provisionsof section 50C, i.e., full value of consideration viz-a-viz stamp valuation.(b) Sale of bonds or debentures (other than capitalindexed bonds issued by Government).(c) Sale of bonds or GDRs by a non-resident whichis taxable as per provisions of section 115AC.(d) Sale of securities by FIIs which is taxable as perprovisions of section 115AD

• The Schedule CG in ITR forms of earlier years couldnot allow computations of capital gains fromindividual assets, especially land and building,thereby making it difficult for the taxpayers tocorrelate the exemptions with rollover ofinvestments. With more categorization, the claim forexemptions would be easier to compute and claim.

• Capital gains, short-term and long-term, are taxableat different rates so the ITR forms add more rows fortaxability of such capital gains at different rates.

• Details for intra-head adjustments under section 70shall be provided along with computation of capitalgains under the Schedule CG.

• The Schedule CG in ITR forms of earlier years couldnot allow computations of capital gains fromindividual assets, especially land and building,thereby making it difficult for the taxpayers tocorrelate the exemptions with rollover ofinvestments. With more categorization, the claim forexemptions would be easier to compute and claim.

• Capital gains, short-term and long-term, are taxableat different rates so the ITR forms add more rows fortaxability of such capital gains at different rates.

• Details for intra-head adjustments under section 70shall be provided along with computation of capitalgains under the Schedule CG.[ITR 2, 3, 4, 5, 6]

New cells inserted to obtain morespecific information:

A. Expenditure disallowable under sections 36 and 37• The New ITR forms require taxpayers to provide specific

information to the extent possible. Accordingly, it inserts newcells to disclose expenditures which are is allowable underspecific provisions of the Income-tax Act as under:(a) Amount of contribution to a pension scheme referred to insection 80CCD [section 36(1)(iva)](b) Amount of securities transaction paid in respect oftransaction in securities, if such income is not included inbusiness income [36(1)(xv)](c) Expenditure of capital nature [section 37(1)](d) Expenditure laid out or expended wholly and exclusivelynot for the purpose of business or profession [section 37(1)]

A. Expenditure disallowable under sections 36 and 37• The New ITR forms require taxpayers to provide specific

information to the extent possible. Accordingly, it inserts newcells to disclose expenditures which are is allowable underspecific provisions of the Income-tax Act as under:(a) Amount of contribution to a pension scheme referred to insection 80CCD [section 36(1)(iva)](b) Amount of securities transaction paid in respect oftransaction in securities, if such income is not included inbusiness income [36(1)(xv)](c) Expenditure of capital nature [section 37(1)](d) Expenditure laid out or expended wholly and exclusivelynot for the purpose of business or profession [section 37(1)]

[ITR 4, 5, 6]

B. Deemed Income under section 43CA

• The Finance Act, 2013 has introduced a newsection 43CA which provides that stamp dutyvalue shall be considered for the purpose ofcomputation of income under the head 'Profitsand Gains of Business or Profession' in respectof transactions relating to land or building orboth. Any deemed income, i.e., excess of stampduty value over actual sales consideration, ifany, shall be reported in new ITR Form.

• The Finance Act, 2013 has introduced a newsection 43CA which provides that stamp dutyvalue shall be considered for the purpose ofcomputation of income under the head 'Profitsand Gains of Business or Profession' in respectof transactions relating to land or building orboth. Any deemed income, i.e., excess of stampduty value over actual sales consideration, ifany, shall be reported in new ITR Form.

[ITR 4, 5, 6]

C. Intra-head adjustments:• Details for intra-head adjustments under

section 70 shall be provided along withcomputation of business profits under theSchedule BP.

[ITR 4, 5, 6]

D. Income chargeable at different rates to bereported specifically

[ITR 2, 3, 4, 5, 6]

E. Sections 10A and 10AA deductions

• Entities claiming exemptions under sections 10Aand 10AA shall provide the relevant AssessmentYears in which eligible units beganmanufacturing or production.

[ITR 4, 5, 6]

Date of furnishing audit reports undersections 92E and 115JC

• Old ITR Forms 5 and 6 already had acolumn to fill in the date of furnishing ofreport under sections 92E and115JC/115JB.The column is nowintroduced in ITR 4.

• Old ITR Forms 5 and 6 already had acolumn to fill in the date of furnishing ofreport under sections 92E and115JC/115JB.The column is nowintroduced in ITR 4.

[ITR 4]

Separate disclosure of sumspaid to non-residents

• Following payments to non-residents need separatedisclosure:(1) Compensation in case of non-resident employees,(2) Commission,(3) Royalty,(4) Professional/consultancy fees/Fee for technicalservices, and(5) Interest.

• Old Forms of ITR 5 and ITR 6 already had this option.However, ITR 4 now seeks this information.

• Following payments to non-residents need separatedisclosure:(1) Compensation in case of non-resident employees,(2) Commission,(3) Royalty,(4) Professional/consultancy fees/Fee for technicalservices, and(5) Interest.

• Old Forms of ITR 5 and ITR 6 already had this option.However, ITR 4 now seeks this information.

[ITR 4]

Rebate under section 87A• The Finance Act, 2013 inserted section 87A which

provides rebate to resident individuals whose totalincome does not exceed Rs. 5,00,000. The amount ofrebate will be 100% of income-tax or Rs. 2,000,whichever is less.

• An option is provided under new Form for availing ofrebate under section 87A.

• The Finance Act, 2013 inserted section 87A whichprovides rebate to resident individuals whose totalincome does not exceed Rs. 5,00,000. The amount ofrebate will be 100% of income-tax or Rs. 2,000,whichever is less.

• An option is provided under new Form for availing ofrebate under section 87A.

[ITR 1, 2, 3, 4]

Private discretionary trust

• A 'Discretionary Trust' is a trust where trusteeshave discretion over the use of its income andcapital. It gives trustee the power to decidewhich beneficiary would receive the funds andup to what extent.

• In new ITR 5, a new category of 'Privatediscretionary trust' is included. Such trust cannow file return of income in new ITR 5.

• A 'Discretionary Trust' is a trust where trusteeshave discretion over the use of its income andcapital. It gives trustee the power to decidewhich beneficiary would receive the funds andup to what extent.

• In new ITR 5, a new category of 'Privatediscretionary trust' is included. Such trust cannow file return of income in new ITR 5.

[ITR 5]

Filing of Return by a Trust [ITR 7]

A. Mention Registering Authority andrelevant provision

• In addition to name of theproject/Institution and nature of activity,New ITR 7 requires trust to mention itsregistration no., registering authority andsection number under which it is claimingexemption in respect of project orInstitution being run by it.

A. Mention Registering Authority andrelevant provision

• In addition to name of theproject/Institution and nature of activity,New ITR 7 requires trust to mention itsregistration no., registering authority andsection number under which it is claimingexemption in respect of project orInstitution being run by it.

B. Accumulation of income for charitableor religious purpose

• Where 85% of the income is not applied for charitablepurposes by a trust then it has an option to accumulateor set apart such income for future application. However,trust has to file an application electronically to the AObefore the due date of filing of return to avail of suchoption.

• Such accumulation of income shall be reported by thetrust in new Form ITR 7.

B. Accumulation of income for charitableor religious purpose

• Where 85% of the income is not applied for charitablepurposes by a trust then it has an option to accumulateor set apart such income for future application. However,trust has to file an application electronically to the AObefore the due date of filing of return to avail of suchoption.

• Such accumulation of income shall be reported by thetrust in new Form ITR 7.

C. Voluntary Contributions• A new 'Schedule VC' has been inserted in new Form ITR

7 for reporting of various voluntary donations received bythe trust. Every trust shall report nature of donation alongwith its quantum as under:(1) Local voluntary donations (Corpus and non-corpus)(2) Foreign Contributions (Corpus and non-corpus)(3) Anonymous donation

C. Voluntary Contributions• A new 'Schedule VC' has been inserted in new Form ITR

7 for reporting of various voluntary donations received bythe trust. Every trust shall report nature of donation alongwith its quantum as under:(1) Local voluntary donations (Corpus and non-corpus)(2) Foreign Contributions (Corpus and non-corpus)(3) Anonymous donation

• Reference of material:[2014] 46 taxmann.com 93 (Article) ByNAVEEN WADHWA CA

• New features introduced by Income TaxDepartment

Updating of Contact Information

Compliance

Change ITR Form Particulars

Provide Ack No. &Click on Submit

Provide Ack No. &Click on Submit

You can change Bank Details, Address Details & Contact Details provided inReturn of Income.

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