New Income-tax returns form introduced
I-T assesses will hereafter have to mention both their income and expenditure under the new four-page tax returns form.india Updated: Jun 02, 2006 16:13 IST
Income tax assesses will hereafter have to mention both their income and expenditure under the new four-page tax returns form that replaces one-page Saral (simple) form.
Aimed at tracking down tax evasion, the new form, which came into effect from June one, has space for giving a detailed cash flow statement under which the income tax payers have to mention their cash balance, both in the beginning and the end of the year, including in their bank account.
Claiming that the new form is self-explanatory and easy to fill, Revenue Secretary KM Chandrasekhar said assesses would also have to mention investments and expenses made, the loans secured and gifts received during the year.
Deduction of outgoings of tax assesses, including their expenses and investments, from receipts, including opening cash balance, bank balance, income, gifts and other receipts, would give cash balance and balance in banks at the close of year.
If that amount roughly matches the information provided by third parties through annual information returns, banking cash transaction tax and field officers, there would not be any need of scrutiny and investigation, senior tax officials said.
They said the new form is the result of one and a half years of exercise including consultations with various stakeholders.
Cash flow statement, to be given under schedule 5 of the form, is optional for this assessment year but will be mandatory from 2007-08, Chandrasekhar said.
Though widely touted as complicated by the tax consultants, Chandrasekhar said the new form would make returns filing easier and without little or no help from tax experts.
Claiming the form would benefit honest taxpayers, Chandrasekhar said that under the new form no annexures like details of total income, form 16 giving details of tax deducted at source, will have to be filed along with the income tax returns.
He, however, said this year, the tax assesses had the option of using one-page Saral form till July 31, the last date for filing income tax returns.
With computerisation of most of income tax offices, tax authorities would encourage the assesses to file returns electronically.
While individuals, HUF having long-term capital gains from transactions in securities on which securities transaction tax has been paid can use this form, those earning short-term capital gains cannot file returns in the new form.
Denying that the new form is more complicated than Saral form, senior tax officials now confessed that it was not so easy to fill Saral form. Merely number of pages do not make a form simple, they argued.
Saral forms capture only data of income and not cash flow, they said.
They said the new tax form was the outcome of two and a half years of exercise, including consultations with various stakeholders. The people believe that the new form is much easier to fill in than Saral, they said.
The officials claimed that the new forms are designed to help honest taxpayers.
They said with computerisation of almost all of income tax offices, assesses would be encouraged to file their returns online, though they could also do so in physical form.
The tax officials clarified that returns of past assessment forms could be filed in Saral.