The Central Board of Direct Taxes has issued Notification No.16/2018 dated April 03, 2018 notifying Income Tax Returns (‘ITR’) forms for Assessment Year 2018-19. Income tax return is filed by a tax payer in the prescribed ITR Form, which is applicable based on the nature of the income and other criteria as prescribed.
Certain changes have been made to the return forms as prescribed vis-à-vis last year. The important changes as made are given as under:
ITR No. and Applicability
ITR 1 (SAHAJ)
For Individuals being a resident other than not ordinarily resident having Income from Salaries, one house property (except where there is brought forward loss or loss is to be carried forward), other sources (excluding loss claim, winnings from lottery, race horses or dividend under section 115BBDA, income under section 115BBE etc) and having total income upto Rs. 50 lakh.
Not applicable to:
For Individuals & Hufs not having income from profits and gains of business or profession
For Individuals & Hufs including partner in a firm having income from profits & gains of business or profession
For Presumptive Income from business & profession under section 44AD, 44AE & 44ADA (excluding income from Capital Gains, winnings from lottery, race horses or dividend under section 115BBDA, income under section 115BBE etc)
a) Agricultural income exceeding Rs. 5,000/-
For persons other than, (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR 7 (i.e. for firm, LLPs, AOP etc.)
For Companies other than companies claiming exemption under section 11
For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F). (i.e. for charitable trust, research associations, universities etc.)
1. Disclosure of fees under section 234F for delay in filing of Return
Earlier, penalty under section 271F was imposed by the Assessing Officer, if the assessee fails to file the return of income before the end of assessment year. In lieu of such penalty, the Finance Act, 2017 inserted a new section 234F as per which the assessee is required to pay late filing fees under section 234F, irrespective of any tax payable, before filing of return of income as per below details:
• Rs. 5,000, if the return is furnished after the due date but before December 31 of the assessment year [Rs. 1,000 if total income is up to Rs. 5 lakhs].
• Rs. 10,000, in any other case [Rs. 1,000 if total income is up to Rs. 5 lakhs].
All the ITR Forms [ITR 1, 2, 3, 4, 5, 6, 7] have been amended to disclose the details of late filing fees paid under section 234F.
2. Furnishing of foreign bank account particulars by non-residents
The new ITR 2, 3, 4, 5, 6 and 7 allow non-residents to furnish details of any one foreign Bank Account for the purpose of receipt of income-tax refund.
3. Reporting of income under section 115BBG from transfer of carbon credits
ITR 2, 3, 5, 6, and 7 have been amended to report the income from transfer of carbon credits and tax thereon at the rate of 10% (plus applicable surcharge and cess) under section 115BBG.
4. Disclosure of disallowance of expenditure under the head Income from other sources in case of TDS Default
A new column has been inserted in ITR 2, 3, 5 ,6 and 7 to report disallowance under section 58 under the head income from other sources, in a case where tax is not deducted or deposited in accordance with Chapter XVII-B. Similarly, disclosure is required for income under section 59.
5. Reporting of sum, property taxable as gift
A new column has been inserted in ITR 2, 3, 5, 6 and 7 under ‘Schedule OS’ to report any income specified in section 56(2)(x), deeming receipt of a sum of money or any property without consideration or for inadequate consideration (in excess of Rs. 50,000) by a person as income taxable under the head income from other sources.
6. Disclosure of Fair Market Value (‘FMV’) for computation of Capital Gains in case of transfer of unquoted shares
As per section 50CA, as introduced by Finance Act 2017, in case of sale of unquoted shares, if the sale consideration is less than its FMV, then such FMV is adopted for the purpose of computation of Capital Gains. The new ITR 2, 3, 5, 6, and 7 require the assessee to disclose fair market valuation and the following other information in respect of unlisted shares:
(i) Actual sales consideration
(ii) FMV as determined in prescribed manner
(iii) Deemed Full value of consideration as per section 50CA (higher of A or B)
7. Reporting of GST paid and received separately under the Profit & Loss Account Schedule
ITR 3, 5 and 6 have introduced new columns to report CGST, SGST, IGST and UTGST paid or received by the assessee in respect of goods/ services purchased and sold during the Financial Year. Such disclosure is to be made in para 1C and 7 of Part A- P&L Account.
8. Changes in Depreciation Schedule
In the new ITR 3,5 and 6, depreciation schedule has been aligned to provide revised depreciation rates (maximum rate upto 40%) instead of 50/60/80/100 percent in case of plant & machinery and Building as applicable earlier. New columns have also been inserted to enable the entities to claim proportionate depreciation in the event of business reorganisation, i.e., demerger, amalgamation, etc.
Further, a field is added to disclose the disallowance to be made in respect of depreciation under section 38(2) if an asset is not exclusively used for business purpose.
9. ICDS adjustments to be considered separately in Schedule BP for computation of income from business or profession
Schedule BP (Computation of income from business or profession) of ITR 3, 5 and 6 has been amended to take into consideration the effect of ICDS adjustments on profit/ loss, as disclosed in Schedule ICDS.
10. Transfer of TDS Credit to other person
As per Rule 37BA(2), if an income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, credit for such TDS shall be given to the other person and not to the deductee.
Currently, Income-tax Dept. matches the TDS disclosed in ITR with the amount of TDS as shown in Form 26AS and in case of mismatch, the Department asks the assessee to reconcile the mismatch. Presently, the assessee faces difficulties in proving his claim for TDS credit for taxes deducted in the name of another person for e.g. income chargeable in the hands of the assessee but tax deducted in the name of his spouse, TDS credit in case of inheritance, etc.
To overcome this problem, the ITR 2 and 7 have introduced new columns in TDS Schedule to disclose TDS deducted in the name of other person but in respect of which income is chargeable in his hands. The assessee is required to disclose PAN of such other person alongwith the TDS and corresponding income taxable in his hands.
11. Additional details to be furnished by Individual taxpayers
New ITR Form 1 and 4 require the individual assessee to provide detailed calculation in case of income from salary and house property.
12. Changes applicable only to companies in ITR 6
a) Break-up of payments/receipts in foreign currency- A new schedule has been inserted in ITR 6 seeking disclosure of the amount of payment & receipts in foreign currency by an assessee who is not liable to get its accounts audited under section 44AB. The disclosure is to be given separately for payments/ receipts on capital account and on revenue account.
b) Ownership information in case of unlisted company- The new ITR 6 requires every unlisted company to provide details (if available) of all ultimate beneficial owners being natural persons who are holding 10% or more voting power (directly or indirectly) at any time during the year 2017-18. These companies are required to provide the name, address, percentage of shares held and PAN of the beneficial owners.
c) Details of business transactions with registered and unregistered suppliers under GST- A new Schedule-GST has been inserted in ITR 6 which requires every company, which is not required to get its accounts audited under Section 44AB, to provide following break-up of total expenditure, the transactions for which were entered into during the year on or after 1st July 2017 with a registered or unregistered supplier under GST:
a) Expenditure relating to exempt goods or services
b) Transactions with composite suppliers
c) Other transactions with registered entities
d) Total sum paid to registered entities
e) Transactions with unregistered entities
d) Disclosure required for Ind AS Compliant Companies-In ITR 6, Ind AS Complaint Companies have been required to disclose in a separate schedule the Balance Sheet and Profit & Loss Account in the similar format as prescribed under Division II of Schedule III to the Companies Act, 2013 (i.e., Ind AS Financial Statements). It also incorporates the necessary changes to enable these companies to calculate the book profit in accordance with the new provision which require them to make additional adjustments to the book profit for all items credited and/or debited to "Other Comprehensive Income" and all other items specified therein.
13. Disclosure specifically required in ITR 7
a) Trusts/ Not for profit organisation to disclose more information in ITR- Following additional information are required to be disclosed by charitable or religious trusts/ organisations in ITR-7:
i) Aggregate annual receipts of the projects/institutions run by the organisation
ii) Amount utilized during the year for the stated objects out of surplus sum accumulated during earlier years.
b) Details of fresh registration upon change of objects [Section 12A]- ITR 7 has been amended to seek details of fresh registration due to change is objects of charitable or religious trust/ organisation.
c) No deduction for corpus donations made to other institutions [Section 11]- The amount of corpus donation made to another trust or institution to be specifically disclosed for addition to the taxable income, being not in the nature of permitted ‘application of income’.
14. Disclosure relevant only for assessees filing ITR-4 under Presumptive Taxation Scheme
a) For the taxpayers opting for presumptive taxation under section 44AD, 44AE & 44ADA furnishing of GST related details viz GST Registration No., GST Turnover etc is now mandatory in ITR 4.
b) ITR 4 has been amended to seek more detailed information with respect to financial particulars. The taxpayers opting for presumptive taxation are now required to declare the following additional information:
• Partners/ Members Capital
• Secured Loan & Unsecured Loan
• Advances received
• Other Liabilities
• Fixed Assets
• Loans & Advances
• Bank Balance
• Other Assets
15. ITR 2 not applicable to Partners in a firm
An individual or an HUF, being a partner in a firm, was required to file ITR 2 if he did not have any income from proprietorship business. In case of income from proprietary business or profession, ITR 3 was applicable. For AY 2018-19, an individual or an HUF, being a partner in a firm, shall be required to file his ITR in Form ITR 3 only.