The government has been trying to simplify tax return forms for some time now. However, this year the focus seems to have shifted from simplification to compliance and transparency, which means more details and information will be revealed in the form.
Though the look and feel of the form is the same, you will need to spend some more time. Ensure you fill your forms correctly. A lowdown on some key changes that you need to brace for while filing returns.
E-file your return
Individuals and Hindu Undivided Families (HUFs), whose taxable income is above R10 lakh will now need to e-file their returns. You can e-file your returns directly on www.incometaxindiaefiling.gov.in or take the help of one of the portals that help you e-file your return.
A good point is that you don’t have to depend on a digital signature to complete your forms. You can submit your returns electronically and subsequently fill up the ITR-V form offline, sign it and send it to the Centralised Processing Centre, CPC, in Bangalore by normal or speed post. ITR-V is a one-page document that acknowledges your return. You will need to dispatch these documents within 120 days of filing your return online.
Declare foreign assets
In order to check black money and unreported income, declaration of any foreign asset held by you has been made mandatory from this assessment year. You will need to fill in the details of any foreign bank account held by you along with any immovable property or any financial interest in any entity.
You will also need to declare any other assets held by you overseas. But experts find the lack of definition cumbersome. “Even a television set can be an asset,” explains Sonu Iyer, tax partner and national leader, human capital mobility services, Ernst & Young. “Unless there is a clear definition of what assets are, filing returns will be very tedious. Though this is a good practice but it lacks definition.”
But the worry doesn’t stop just here. “Contrary to the government’s intention of tracking black money, this will end up hurting the expat population the most,” said Iyer. “Expats who are considered residents will also need to report all their assets held abroad.”
You will be considered a resident if you have spent more than 182 days in India in 2011-12 or have spent more than 730 days in the last seven years in India.
Declare co-ownership of property
At the time of filing income from house property, you will need to mention if the property is co-owned and in what percentage. So if you hold a property along with your spouse and both have an equal stake, you will need to mention that you own only 50% of the property. Accordingly, the rent you get will need to be in the same proportion. You will also need to mention the name and the permanent account number (PAN) of the co-owner.
Section 80G: Until last year, you could report an aggregate amount of donation entitled for a deduction under section 80G, but now the government is seeking details of all your philanthropic work. In addition to reporting the amount of donation, you will also have to mention the details of the donee, such as the name, address and PAN.
Schedule TR: This schedule is meant for those who worked abroad for some time, paid tax in that country and are eligible for a tax relief in India. You will also need to mention the country code and the tax identification number in addition to the tax paid and total tax relief claimed.