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22/06/2017

9 key changes in ITR Forms for AY 2017-18
Filed under TAX RETURN, TAXES0
key changes in ITR Forms for AY 2017-18
key changes in ITR Forms for AY 2017-18
The CBDT has notified the new Income Tax Return (ITR) Forms for AY 2017-18 (FY 2016-17). This time all the tax returns have to filed electronically except for people who are more than 80 years of age and have income less than Rs 5 lakhs and have no claim for refund.

The biggest change is the number of ITR forms have reduced from 9 to 7. We give you the 9 key changes that happened in ITR Forms for individuals/HUFs/Professionals.

1. Less number of ITR Forms

The numbers of ITR Forms have been reduced from 9 to 7.

The previous ITR 2A, ITR 2 and ITR 3 forms have been rationalized to single ITR 2 Form.
The previous ITR 4 Form has been re-numbered as ITR 3.
ITR 4S (Sugam) is now ITR 4 (Sugam).
Also Read: How to Pay 0 Income Tax on Rs 11 Lakh Salary?
2. One pager form for Salaried Tax payer [ITR 1 Sahaj]

As promised the government has come out with simple, one pager ITR 1 Sahaj form which can be filled by tax payers who have income from salary/pension, one house property and income from other sources like interest income. However to fill this form the total income should be less than Rs 50 Lakhs.

The form has done away with the long list of deductions and only included the most common deductions under section 80C, 80D, 80G and 80TTA. If the tax payer wants to claim tax benefit under other sections he can do so by mentioning relevant section in column titled “Any Other”.

Some new columns have been introduced to report dividend income (u/s Section 10(34)) and exempted long term capital gains (u/s Section 10(38)).

Download: Income Tax ebook with tax calculator for AY 2017-18 (FY 2016-17)
3. Disclose Cash Deposited during Demonetization [ITR 1, 2, 3, 4, 5, 6, 7]

A new field has been inserted in all ITR Forms to report the amount of cash deposited during the demonetization period of November 9 to December 30, 2016. However you need to report this if the cash deposit during the period exceeds Rs 2 Lakhs.

4. New Field for quoting Aadhar Number [ITR 1, 2, 3, 4]

The finance bill was amended to make it compulsory for tax payers to quote their aadhar number while filing income tax return. The ITR Forms have introduced column for either entering aadhar number or the Enrolment ID in case the aadhar is not received but has been applied for.

Also Read: 25 Tax Free Incomes & Investments in India
5. Fields for Income Taxable at special rates [ITR 2, 3, 4, 5, 6, 7]

Some incomes are taxed at special rates. The ITR forms have introduced columns to declare these.

Unexplained Income:

As per Section 115BB, any unexplained income or investment attracts special tax of 60% (plus surcharge and cess, as applicable) irrespective of the tax slab. This can now be shown in the newly inserted column under ‘Schedule OS’ .


If tax payer has unexplained income he/she cannot fill ITR 1.

Also Read: 21 changes in Income Tax laws from April 1, 2017
Dividend Income above Rs 10 lakhs

As per Section 115BBDA dividend income of more than Rs 10 lakh from domestic companies are taxable at the rate of 10%. The same can be reported in newly inserted column under ‘Schedule OS’ . If tax payer has dividend income above Rs 10 Lakhs (as explained above) he/she cannot fill ITR 1.

Income from patent

As per Section 115BBF, royalty received for patent developed and registered in India is taxed at 10%. The same can be reported in newly inserted column under ‘Schedule OS’ .

Also Read: How to Claim Tax Exemptions while filing ITR?
6. Deduction under section 80EE [ITR 2, 3, 4]

Section 80EE gives additional tax exemption of Rs 50,000 for payment of interest on housing loan to first time home buyers. This is over and above the tax exemption of Rs 2 lakhs u/s 24(b). A new field has been introduced in Schedule VI-A to claim this deduction.

In case you are filling ITR 1 you can mention Section 80EE in “Any Other” deductions to avail this tax benefit.

7. More detailed declaration of assets/liabilities by Individuals earning above Rs 50 lakhs [ITR 2, 3, 4]

Last year the income tax department had introduced new section to declare the values of assets and liabilities of individuals with income of more than Rs 50 lakhs. This year the ITR form asks for more detailed information like address of immovable property.

Also Read: 13 Tax Free Components You Must have in Salary
8. Digital Receipts Vs Cash payments for presumptive taxation scheme [ITR 4]

As per the presumptive taxation scheme u/s 44AD, 8% of gross turnover is considered as income. Budget 2017 made further classification in the same. Now 6% of gross turnover is considered as income if the payment is accepted in digital form including cheque, wallets, etc. The ITR 4 has made separate columns to list digital Vs Cash receipts.

9. Presumptive taxation scheme for Professionals [ITR 4]




Budget 2016 had introduced presumptive taxation scheme for professionals such as doctors, Charted accountants, lawyers, etc who can declare minimum 50% of gross receipts as income. ITR 4 has introduced new fields accordingly.

This was brief summary of key changes for ITR Forms for AY 2017-18. We would come out with more details of Income Tax Return in subsequent posts.

08/09/2016

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01/06/2016

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09/03/2016

Withdrawal of Provident Fund may attract Income Tax. The Income Tax Department recently told EPFO (Employees Provident Fund Organisation) to deduct Tax (TDS) from the withdrawal amount, if the withdrawal happened before completing five years of subscription. Tax officials have cited a rule in the 1961 Income-Tax Act that taxes PF withdrawals by employees before completing five years of contributions into the EPF is taxable.

In most cases, the accumulated PF balance is withdrawn at the time of retirement, and therefore, not taxable in the hands of the individual. However, in certain cases like change in employment, an individual may even withdraw the PF balance earlier. The point one needs to remember is that the amount received from such PF is not exempt from tax in all cases. Only under the circumstances listed below will the amount withdrawn from PF be eligible for such exemption from tax.

If the employee has rendered continuous service with the employer for five years or more. Again, if the balance includes amount transferred from the individual’s PF account maintained by previous employer(s), then the years of continuous service rendered to the former employer(s) would be included for the purpose of computing the five-year period.

If the employee has not rendered continuous service of five years, but the service is terminated by reason of the employee’s ill health or discontinuance of the employer’s business or reasons beyond the control of the employee, the amount will be tax-exempt.

Another tax-exempt case is when, on the cessation of the employment, the employee finds another job and the the accumulated PF balance is transferred to his individual PF account maintained by the new employer.

In short, where the PF amount is withdrawn before five years of continuous service, it may be taxable in the hands of the individual as if the fund was not recognised from the start of the contributions. In such a case, payment received by the individual in respect of the employer’s contribution along with the interest accrual thereon is taxed as “salary”. Interest on the employee’s contribution is taxable as “other income”. Payment received in respect of the employee’s own contribution is exempt from tax (to the extent not claimed as a deduction earlier).

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I-T provisions provide that the trustees of a recognised PF or any person authorised by the regulations of the fund to make the payment of the accumulated balance to the employee should deduct tax at source while paying the amount. Further, the person liable to deduct tax has to issue the certificate of tax deducted at source (Form 16) within the specified time frame to the employee depicting the details of taxes withheld from the accumulated PF balance and also comply with other salary-related compliance necessities. So the next time you think of withdrawing your PF, you must as an individual also assess whether the same is taxable or exempt.

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I worked with a private company for four and years and nine months. I have given a provident fund (PF) withdrawal request to my ex-employer. Will the PF amount be taxable?

We understand that the PF maintained by your former employer was a recognized PF. As per the provisions in the Income-tax Act, if the employee has rendered continuous service with his employer for five years or more, then the withdrawal of accumulated balance from such PF is not taxable at the time of termination.

Since the period of your services with the ex-employer is four and a half years which is less than five years, you shall be liable to tax on the amount withdrawn from your PF. In addition to the normal tax payable by you, you will be required to pay all the tax concessions availed by you so far on account of contribution to such recognized PF. Further, the total employer’s contribution plus interest thereon, which was not taxed earlier, shall be taxable as profits in lieu of salary.

However, if the accumulated balance in your PF account is transferred to your recognized PF account maintained by the new employer, no tax liability shall arise due to such transfer.

28/02/2016

This Time very much expecting from finance minister arun jetli

I hope budget will be progressive and for everyone's goodness.