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New ITR Forms – What is Up for Review



Last Friday , the income-tax department notified the new ITR forms for the current assessment year, seeking additional details to curb non-disclosure and check the use of black money .The new forms required an assessee to furnish extensive financial details such as details of all bank accounts held, personal expenditures made on foreign trips, foreign bank account details, investments and assets held outside India.

 

The immediate reaction was outrage on social media and discussion forums where the forms were panned by one and all. Retrospective, intrusive, too complicated, difficult to compile, were some of the adjectives used by taxpayers across different categories. The criticism was so severe that the finance minister had to intervene and roll back the forms within 72 hours. Though the I-T department has been asked to simplify the forms, given the focus on curtailing black money , stringent disclosures will come sooner than later. However, some amendment and reviewing are definitely needed.

COMMON CONCERNS

The Saral forms were introduced with a focus on making tax filing easy for the ordinary taxpayers by cutting back unnecessary information. The new forms are exactly the opposite.

Foreign Travel Details:

Both residents and non-residents have to provide full details of foreign travel undertaken -passport number, place of issue of passport, countries visited during the year and number of times travelled. Residents have to also declare personal expenses incurred in relation to such travel. The common consensus on providing details of foreign travel that it is absolutely bizarre and unnecessary. Take the case of a frequent traveller. He has to preserve every single receipt for smallest of the small expense made.

The biggest problem here is that the department has not provided a threshold for declaring such expenses. There will be small personal expenditures like a clothing item, chocolates, etc. The I-T department expecting the taxpayers to keep records of such purchases is absolutely unreasonable.

Particulars of Bank Accounts:

 

The new ITRs make it mandatory to list bank accounts held at any time during the year, including those that have been closed. Taxpayers will also have to provide account numbers, IFSC code and list any joint holders along with the closing balance on March 31 of the assessment year. It is difficult to comprehend the intent of such declaration when every account is attached to the holder's PAN number.

Foreign Financial Assets Disclosure: At present, a resident individual has to declare the details of foreign bank accounts, financial interest in any entity, details of immovable property or other assets outside India in ITR-2. The new forms require these individuals to also declare the income -interest, returns and rentals -from these assets in the tax return. None of these asset disclosures that has been asked for has a declaration threshold.

ALL IS NOT BAD

Certain things are in the right direction as. For instance, the need to declare utilisation details of amounts deposited in capital gains account schemes for the year. Since the timeframe for utilising the funds in capital gains accounts to get tax exemptions for transactions such as property is long (3 years), many miss out on capturing this data properly in their return computation. The intent might not be to escape tax. Most are unaware and many forget. So by asking for details the department is simply trying to make sure that your calculations are correct. Therefore, an honest taxpayer should not hesitate to provide this detail

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