Notification on Income Tax Returns (ITR)

The Central Board of Direct Taxes (CBDT) exercising powers conferred to it under Section 295 of the Income Tax Act, 1961 (IT Act) has issued Notification No. 34/2013 (F.No.142/5/2013-TPL). The notification has made significant amendments to Rule 12 of the Income Tax Rules, 1962 (IT Rules) pertaining to filing of income tax returns under Section 139, 148 and 153 of the IT Act. The notification is applicable from Assessment Year (AY) 2013 -2014 i.e. financial year 2012 -13.

Some of the significant amendments to the Income Tax Returns (ITR) are summarized as follows:

Form SAHAJ (ITR 1) and Form SUGAM (ITR 4S)

  • Tax payers are mandatorily required to furnish their bank details irrespective of any refund arising to them or not.
  • Earlier details of MICR code were required to be furnished. Now, instead of MICR code, Indian Financial System Code (IFSC) is required to be quoted by the tax payer. IFSC code is an eleven digit code assigned by Reserve Bank of India to identify every banks branch uniquely, that are participating in National Electronic Fund Transfer system in India.

              The said forms shall not be applicable to tax payers in the following circumstances:

- If tax payers have losses under the head income from other sources then such tax payers cannot utilize Form SAHAJ to file their income tax returns.

- If a tax payer being is a ‘resident’ but ‘not ordinarily resident’ and has assets located outside India or possesses authority to sign in any account located outside India.

- Tax payers claiming benefits under Section 90 and 90A of the IT Act.

- If tax payers have exempt income exceeding Rs 5,000/-.

Amendments to Form ITR 2

  • In case of short term capital gains arising to a non-resident tax payer, gains earned are to be bifurcated into shares / units on which Securities Transaction Tax (STT) has been paid and on those on which STT has not been paid.
  • If a tax payer has claimed benefit under Section 54GB, the Permanent Account Number (PAN) of the Company is to be provided.
  • A separate schedule FSI has been inserted requiring tax payers to declare ‘Details of Income accruing or arising outside India’. The tax payer has to provide details like country code, tax identification number, income earned under the five heads of income and division of such income where a tax treaty is applicable and where not.
  • Schedule TR pertaining to details of taxes paid outside India has been amended to provide for details of the relevant article of the tax treaty.
  • Schedule FA pertaining to ‘Details of Foreign Assets’ has been amended requiring a tax payer to declare its account number if it has maintained a foreign bank account or possesses signing authority for any account located outside India.
  • If a tax payer is a trustee of a trust formed outside India, the tax payer has to provide details like country name, country code and the name and addresses of trustees, settlers and the beneficiaries.

 Amendments to Form ITR 3 and ITR 4

  • Schedule AL has been inserted requiring a tax payer to report details of their personal assets and liabilities in India if the tax payer’s income exceeds Rs 25 Lakhs.
  • The assets covered under the said schedule are land, building, bank (including all deposits), shares and securities, insurance policies, loans and advances given cash in hand, jewellery, bullion, archaeological collections, drawings, painting, sculpture or any work of art, vehicles, yachts, boats and aircrafts is provided. Further, the value has to be reported at cost. The taxpayers can report any liability against these assets in the schedule.

 Electronic filing of Tax Audit Reports, Transfer Pricing and Minimum Alternate Tax Report  along with income tax returns

  • Until last year tax payers filing their income tax returns electronically were not required to enclose any papers / documents / reports with their income tax returns. Now clause 2 of Rule 12 of the IT Rules has been amended to provide that tax payers are required to file the reports electronically along with their income tax returns.

Categories: Income Tax Return

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