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Saral has become complex. Filing I-T returns will no longer be easy.india Updated: Jun 03, 2006 15:50 IST
Saral has become complex. Filing income-tax returns will no longer be easy.
The government on Friday notified a new, four-page, tax-returns form for 2006-07. Called Form 2F, it will eventually replace the one-page Naya Saral. In the new form, a taxpayer will have to show both income and expenditure, as in a company’s balance sheet.
Filling in the details is far from simple and most people may require the help of professionals.
Form 2F is optional for the current year but will become mandatory from 2007-08. It asks for a statement of one’s cash flow, including investments. One also has to provide the cash balance and the bank balance in the beginning and the end of the year, which tantamount to assessees declaring every financial detail.
“The new form has asked the taxpayer to give the break-up of income from all sources, including tax-free income like gifts from a blood relation, and expenses and investments,” said Sudhir Malik, tax consultant. “At the end of the year, your income and expenses should match.”
Taxpayers, however, need not give spending details; instead, they must show the lump sum expenditure. Since the taxmen have not asked for details, an assessee can show the amount that has not been invested as expenditure.
With the new form, the government plans to detect the money trail. But not all are convinced. A leading economist termed the move “highly obtrusive”. “It does not make any sense,” he said. “In no other country does the tax authority ask for details on how much money one has spent. And, what will it do with so much information.”