Govt to scrap new I-T return form
"The new 4-page form which replaces Naya Saral form is meant for only this year and will be optional," Govt said.india Updated: Jun 08, 2006 22:15 IST
Under severe attack from various quarters, including the Congress party, the Government on Thursday said the new form introduced for filing Income Tax returns would be dropped from next year.
"The new four-page form which replaces the one-page "Naya Saral (simple) form" is meant for only this year and will only be optional for filing returns, Revenue Secretary KM Chandrasekhar told reporters.
The salaried tax assesses have the option of filing Income Tax returns this year either in the existing 'Naya Saral' form or the new form called '2F', he said, adding the Government will come out with another form next year based on the feedback it receives this year.
Earlier, the Government while notifying the new form 2F had said that it would be optional for this year and mandatory from next year with the withdrawal of 'Naya Saral' form.
The move follows widespread criticism from tax experts and political parties, including the ruling Congress, who wanted the Saral form to remain simple and the new form simpler.
The new form next year could be a modified one based on the feedback the tax department receives or could be an improved version of either the existing saral form or 2F, he said.
Giving a detailed rationale behind the form 2F, he said the new form was really "simple" and an attempt to make it self-explanatory and do away with all annexure including Form 16A providing details of tax deducted at source by the employer.
Critical of the attempts to depict the new form in a bad light, Chandrasekhar said the new form was certainly more simpler than the existing 'Naya Saral' form and the additional pages provided only "worksheets" to make the filing of returns easier for the common man.
Under the earlier 'Naya Saral' form, which will cease to exist from July 31, the last day of filing returns, these worksheets were provided by way of annexure, details of which could be worked out only by experts and not by the common man as no instructions were provided.
The new form also needed the tax assesses to provide cash flow statement indicating the broad income, expenditure and investments. Providing the cash flow statement was however optional, he said.
The basic purpose of cash flow statement is to track if the assesses were concealing income, he said adding unlike in the past, tax authorities have access to a lot of information like annual information return (AIR) to track the lifestyle of tax assesses.
"We have collated individual ledgers of tax payers," he said adding whenever income tax returns are filed, the tax authority can access on his computer all details about the tax assesses like Pan and other details including some of the high-value purchases and investments.
He also said the tax department was in the process of improving the existing Form 16AA provided by the employers indicating the tax deducted at source from its employees.
All those tax assesses who do not have any income other than salary upto Rs 1,50,000 need have to file only form 16AA as tax returns.