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Every year Income Tax Forms (commonly known as ITR) are issued afresh valid for a particular assessment year. The new ITR Forms released by the Income Tax department would see various changes in the return to be filed for FY 13-14 (AY 14-15). At the very outset the department requires transparency of transactions made by the taxpayers at each level of tax avoidance. The new Form also brings in few features which will remove certain difficulties faced by taxpayers. www.choksitax.com

Key Changes Noticed In New ITR Forms All Tax Refunds through ECS only: Now all the Refunds will be E-Refunds. No refund will be granted by Cheque or DD. Claim Rebate under section 87A: The new ITR Form has a provision to claim rebate under section 87A. Resident Individuals whose total income is not exceeding Rs. 500,000 is eligible to a rebate which will be lesser of 100% of income-tax or Rs. 2,000. www.choksitax.com

Key Changes Noticed In New ITR Forms Cont Unclaimed Credit of Taxes Deducted at Source (TDS) / Taxes Collected at Source (TCS) Brought Forward and Carried Forward: Assessees are required to deduct tax at source on cash or accrual basis, whichever is earlier. Therefore, if someone is raising an invoice is also required to make advance payment of TDS. The previous ITR forms did not provide any such feature to carry forward the excess TDS. However, the new forms provide for details to be entered in respect of unclaimed TDS / TCS of the earlier tax year(s) and unclaimed TDS/TCS of the present tax year to be carried forward to the subsequent year. www.choksitax.com

Key Changes Noticed In New ITR Forms Cont Every Company or LLP has to provide Unique Identification Number issued by MCA: The new ITR Forms now requires Companies and LLPs to provide their CIN and LLPIN in their returns. The Directors & Designated Partners details along with their DIN and DPIN are also required to be furnished in the return. Provide Debtors PAN for claiming Bad-debts: For Claiming Bad Debts by assessee, PAN of Debtors has to be provided. www.choksitax.com

Key Changes Noticed In New ITR Forms Cont Certain payments to non-resident to be disclosed separately: The new ITR Form requires Individuals to separately disclose payments made to non-residents in regard to Compensation, Commission, Royalty, Professional/consultancy fees/Fee for technical services and Interest. ITR-5 for private discretionary trust: A trust where discretion is there among the trustees over the use of its income and capital are known as Discretionary Trust. The new ITR-5 Form now allows such trust to file their return of income. It gives trustee the power to decide which beneficiary would receive the funds and up to what extent. www.choksitax.com

Key Changes Noticed In New ITR Forms Cont To report buy-back of shares: A schedule has been inserted in the newly prescribed forms which mandate Indian corporate taxpayer(s) to disclose necessary information in respect of buy back of unlisted shares and tax paid thereon. Cyprus Transactions to be reported: The transactions enter with the entities in Cyprus, a non-co- operative jurisdiction, is required to be reported to claim any deductions on expenditure and payments made. The new ITR Form requires prescribed information to be furnished for transactions in Cyprus notified under section 94A. www.choksitax.com

Key Changes Noticed In New ITR Forms Cont New computation of Capital Gains: The forms provide an upgraded new schedule for computing gains arising from transfer of capital assets in each of the prescribed categories. Additionally, information in respect of intra head adjustments of capital loss also needs to be disclosed in the newly prescribed form. Sale of Land and Building involving Stamp Duty Valuation to be disclosed: Any gains under the head Profits and Gains of Business or Profession under section 43CA on sale of land or building with respect to its stamp duty valuation shall be reported in the new ITR Form. The Finance Act 2013 provided that in computing business income from transfer of land or building, stamp duty ready reckoner value should be adopted in case the actual transaction value is less than the former. The newly prescribed forms provide disclosure in respect of such ready reckoner value which exceeds the actual transaction value. www.choksitax.com

Key Changes Noticed In New ITR Forms Cont Non-Deductible Business Expenditure to be reported: In the newly prescribed forms, information in respect of the following non-deductible business expenditure has been inserted: 1. Contribution to pension schemes 2. Amount of securities transaction tax 3. Expenditure of capital nature and 4. Expenditure not wholly for the purpose of business or profession. www.choksitax.com

Conclusion The Income Tax department is in pursuit of collecting information from taxpayers to the maximum and this might be a step towards start of exchange of information amongst various departments of government. www.choksitax.com

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