Changes in new ITR Forms

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There are over 25 changes in current year Income Tax Return (ITR) forms this year. For the common person, it is important to understand the key implications of the ITR form changes so that you can easily finish the task of filings your income tax returns in the next few weeks.

For the salaried person, ITR filing was relatively easy so far. An assessee with income from salary, one house property and other sources (like interest from fixed deposits) uses the most basic one-page ITR-1 or Sahaj form. The new Sahaj form wants you to disclose specific details about your salary. It seeks an assessee's salary details in separate fields and in a breakup format such as allowances that are not exempt, the value of perquisites, profit in lieu of salary and deductions claimed under section 16. Basically, the taxman wants to know the structure in case of salary income.

The new ITR-1 Sahaj form also seeks details about income from property such as gross rent received/ receivable/ letable value and tax paid to local authorities etc. "In case of self-occupied property, one needs to provide only the amount of interest paid on housing loan taken for the purchase or construction of the property. In case if the property is jointly owned then he should only claim the amount proportionate to his/her share in ownership

In case of property given on rent, one needs to calculate the total rent received/receivable for the financial year in respect of the said property. If the property is subjected to property tax by local authorities then the actual amount of taxes (including prior year arrears) paid during the financial year can be claimed as a deduction. After reducing the amount of property taxes actually paid from the yearly rent you arrive at Net Annual Value of the property. On this NAV you can claim 30% standard deduction for repairs and maintenance which is auto calculated in most of the software.

Lastly, you can claim your share in the amount of housing loan interest paid in respect of the rented. Do remember that you can also add the loan processing fee in the cost of borrowing. You can also claim pre-construction interest in five equal installments starting the year of possession

Coming to the new ITR 4 form, it requires a taxpayer to provide the aggregate turnover reported by him/her in GST returns. This can also affect some employees who do part-time work of others and in that case earn money from outside salary and charge GST on those invoices. The GST return matching is important because many a times business owners have been reporting two sets of income, one for income tax and another one for service tax. "The ITR forms require the business entities to report the GST transaction which would help the Dept. to independently reconcile the transactions reported by them in income-tax return and GST returns

The new ITR forms have specific columns to report each capital gain exemption separately. Details of each capital gains exemption under Sections 54, 54B, 54EC, 54EE, 54F, 54GB and 115F need to be reported in its applicable column now. This is a crucial change. New ITR form wants the taxpayer to provide the details about the date of transfer of the original capital asset (house, share, plot of land, agricultural land, jewellery) which can be found from the property sale agreement or contract note for share transfer.

The new form also asks to provide the details (amount invested and the date of investment) of the purchase of a specified new asset (house, bonds, shares, units, agricultural land, etc.) These details can be traced from the purchase agreement of the new house or from the share certificate, or bond receipt on folio statement of the fund.

In case if the unutilised amount is invested in capital gain account scheme, then the details of such investment can be traced from the bank passbook/FD receipt for such account. For claiming the deduction of section 54GB one has to provide various details viz. PAN of the eligible company, amount invested and date of investment in shares of the company etc. These details can be obtained from the investee company.

• In case of property given on rent, one needs to calculate the total rent received/receivable for the financial year in respect of the said property  
• The new ITR 4 form requires a taxpayer to provide the aggregate turnover reported by him/her in GST returns.

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