Changes in Income tax return forms AY 2018-19
- 1. Income tax Updates Changes in Income tax return (ITR) forms AY 2018-19 RAPG & Co. Chartered Accountants 1
- 2. Brief about the document • Every year, CBDT notifies the income tax return forms for all assessees. For the assessment year 2018-19 also CBDT has released the new income tax return forms. These forms will be applicable for the filing the income tax return of 01-04-2017 to 31- 03-2018 period. With the help of this write up we will be able to understand the new reporting requirements so that before filing the returns the assessee shall be ready with the desired information. • It is apparent with the changes that the new ITR Forms requires self declaration on various points to shift the onus on the assessee to prove their claims for deductions, expenses or exemptions. • These ITR forms seek more information from trusts, taxpayers who opted for presumptive taxation scheme, investors in shares of unlisted companies, so on. • Let us discuss the changes in detail. RAPG & Co. Chartered Accountants 2
- 3. Calculation of salary income in detail: • Detailed calculation of income from salary; • Restricted to single figure till last year; • To increase the transparency between the assessee and department. • The assessee may get these information from Form 16 (Part B) issued by the employer. RAPG & Co. Chartered Accountants 3Relevant for ITR 1,2,3,4
- 4. Information required in relation to Sale of un- quoted shares: • The new form requires full value of consideration, fair market value of shares and full value of consideration as per section 50CA; • It would be mandatory now for the investors to obtain the valuation report; RAPG & Co. Chartered Accountants 4Relevant for ITR 2,3,5,6,7
- 5. Taxability of gifts under other sources: • A new provision has been inserted vide section 56(2)(x) to include any taxpayer within the ambit of taxability on account of receipt of money or any property without or inadequate consideration. • From AY 18-19, any person receives money or any property for without or inadequate consideration (in excess of INR 50,000) shall furnish the information of the same and pay the tax accordingly. RAPG & Co. Chartered Accountants 5Relevant for ITR 2,3,5,6,7
- 6. Presumptive taxation scheme • For tax payers of presumptive taxation scheme, new ITR 4 form seeks details of 14 financial particulars of business such as amount of secured/unsecured loans, advances, fixed assets, capital account, etc. • Also, the aggregate turnover shall be furnished by the tax payer under ITR 4 as per the GST provisions. In this way, the authorities will compare the turnover as per GST and Income tax. RAPG & Co. Chartered Accountants 6Relevant for ITR 4
- 7. Expense reporting Registered and Unregistered person • The companies which are not required to get the accounts audited under section 44AB of Income tax act, 1961, shall furnish the information; • The reporting of expenses incurred during the relevant financial year in respect to Registered/Un-registered person; RAPG & Co. Chartered Accountants 7Relevant for ITR 4
- 8. New requirement for IndAS compliant company • Though the IndAS is applicable on high net worth companies since AY 2017-18 but there was no requirement in regard to IndAS under ITR forms; • In fresh ITR forms, IndAS compliant companies shall be required to report the IndAS compliant financial statement as well; • Further, any adjustment required for calculation of MAT profit with respect to other comprehensive income or other adjustment due to IndAS reporting, can be made under separate section; RAPG & Co. Chartered Accountants 8Relevant for ITR 4
- 9. Changes w.r.t. reporting of Depreciation: • Rate of depreciation as allowable under Income tax act, 1961 on block of assets is restricted up to 40% as per the 29th Income tax amendment rules, 2016; • Therefore, new forms has replaced the column of depreciation from 50%/60%/80%/100% to 40%; • Further, new columns has been added to include proportionate depreciation in case of demerger, amalgamation, etc. • In case the asset is not used exclusively for business purpose, a separate disclosure can be made in section 38(2). RAPG & Co. Chartered Accountants 9Relevant for ITR 6
- 10. Reporting by Non-resident assessees • The new ITR forms allow non- residents to furnish details of any one foreign Bank Account; • This would ease the process to transfer the income tax refund directly the foreign accounts of the non-residents. • Non-resident assessee (Individual) shall file ITR 2 or 3. ITR 1(Sahaj) is no more available for them; RAPG & Co. Chartered Accountants 10Relevant for ITR 2, 3, 4, 5, 6 and 7
- 11. Reporting by Trusts • Reporing of annual receipts, date of approval granted and amount utilized during the year for the stated objects; • Any change in the objects which is not as per the registration conditions, the trust has to seek a fresh registration. The ITR-7 requires the reporting of date of change of objects, application date for fresh registration and date of fresh registration; • As per the Finance act, 2017, any donation by a charitable institution to another charitable institution shall not be treated as application of funds. To give effect, the trust shall be required to report the amounts separately to add back into the taxable income. RAPG & Co. Chartered Accountants 11Relevant for ITR 7
- 12. Other changes • Particulars of natural persons who were beneficial owners of shares holding not less than 10% of the voting power at any time of the previous year shall be reported in the ITR- 6; • Report the deviation of ICDS as profit and loss separately. Till now, the reporting was required to net impact (negative or positive) only; • Additional information to claim the benefit under DTAA in respect of Capital gains and income from other sources; • Penalty shall be payable at the time of filing of return in case of any delay; • Partner of a firm shall be filing ITR 3; • Reporting of CSR expenditure separately under ITR-6; • Foreign currency receipts and payments shall be reported by the companies not liable to audit under section 44AB; RAPG & Co. Chartered Accountants 12Relevant for ITR 2, 3, 4, 5, 6 and 7
- 13. RAPG & Co. Chartered Accountants 13 The information is based on the ITR forms notified by the CBDT for Assessment year 2018-19. RAPG & Co. Chartered Accountants Contact persons: CA Neeraj Kumar +91 9999836182 CA Deepak Arya +91 9818449179, [email protected]