Individuals and businesses have to disclose more details of their professional and residential status, as well as their income, while filing tax returns for FY19, according to the new forms notified on Thursday night by the income tax (I-T) department. The aim is to increase transparency and narrow the scope for tax evasion.
The new norms bar individuals who hold directorships in companies or had investments in unlisted company shares in the last fiscal year from using the simpler forms—income tax return (ITR)-1 or ITR -4. They have to use either ITR-2 or ITR-3 forms in which details of holdings of unlisted equity shares have to be disclosed.
This covers those who have received employee stock options in unlisted companies, including those listed outside India, experts said.
The new forms also require individuals to disclose more details about their residential status, such as the number of days spent in India and abroad, rather than giving a self-declaration on residential status. The scope of reporting foreign assets and bank accounts has also been scaled up.
Those who claim income tax exemption for farm income will have to disclose where the agricultural land is located, its size, whether it is irrigated or rain-fed, and whether they own the land or hold it on lease.
{{/usCountry}}Those who claim income tax exemption for farm income will have to disclose where the agricultural land is located, its size, whether it is irrigated or rain-fed, and whether they own the land or hold it on lease.
{{/usCountry}}Taxpayers will need to be careful while filing returns and will need to collate additional details well in advance, said experts.
The option of filing tax returns in physical form is now available only to people aged 80 or more and are filing the simpler ITR -1 or ITR -4 forms.
The new ITR forms seek to increase the disclosure requirement on property transactions too, said Archit Gupta, founder and chief executive officer of Cleartax.com, a taxpayer service provider.
“It is now mandatory for sellers to report in ITR forms, the name, permanent account number, address with pin code, both in case of short-term as well as long-term capital gains earned by a seller,” Gupta said.