Recent changes in Income Tax Return forms for AY 2014-2015

Recent changes in Rule 12 and Income tax return forms for AY 2014-15

dk bholusaria [email protected]

Today’s agenda

• Highlights of changes in rule 12.

• Assessee, applicable return and mode of filing for AY 2014-15.

• Discussion on changes in income tax return for AY 2014-2015.

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Changes in rule 12

Notifications

• Income-tax (4th Amendment) Rules, 2014 dated 1st April 2014

• Income-tax (6th Amendment) Rules, 2014 dated 30th May 2014

• Both notifications applicable w.(r.)e.f. April 1, 2014

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Highlights of changes

• New forms for AY 2014-2015

• In addition to reports, even notice u/s 11(2)(a) covered under compulsory e-filing

• More audit reports covered under mandatory e-filing

• Changes in compulsory e-filing of income tax returns for certain assessee

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Applicable return and mode of filing for AY 2014-15, for various type of assessees

Individuals and HUFs

without

business income

Category Form Mode

Salary or Family Pension

+/ 1 HP Income w/o b/f loss

+/ iOS w/o Lottery or Race Horse

Income

Plus: a. Ei <= 5K

b. Resident w/o Financial Interest or

signatory in any account outside

India

c. No relief/deduction claimed u/s

90/90A/91

1 E-File*

if

Ti> 5 Lac

Or

Any

mode if

Ti<= 5 lac

a. Resident w/ Financial Interest or

signatory in any account outside

India

b. Relief/deduction claimed u/s

90/90A/91

c. Total Income > 5 Lacs

2 E-file*

Other cases 2 Any

+/ means “And/or”

“HP” means “House property”

iOS means “Income from other sources”

“Ei” means “Exempted Income”

“Ti” means “Total Income”

* With or without DSC

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with

business income

Category Form Mode

Covered by provisions of 44AB 4 E-file

w/DSC

Required to furnish any audit report

electronically (other than 44AB)

4 E-File

Income from Partnership Only


signatory in any account

outside India; or


90/90A/91; or

c. Total Income > 5 Lacs

3 E-File

Other cases of partnership income

only

3 Any






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with

business income

Category Form Mode

Income computed u/s 44AD / 44AE only


signatory in any account

outside India; or


90/90A/91; or

c. Total Income > 5 Lacs; or

d. Required to furnish any audit

report electronically (other than

44AB)

4 E-File

Other cases of 44AD/AE income 4S Any

All other cases of business income

4

E-File*

if

Ti> 5 Lac

Or

Any

mode if

Ti<= 5 lac






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139 (4B):

Political Parties

Category Form Mode

Required to furnish any

audit report electronically

(other than 44AB)

7 E-File with

DSC only

(last year W/o

DSC was

permitted)

Total Income > 5 Lacs;

7 E-File with

DSC only

(last year all

modes were

permitted)

Other cases 7 E-File with

DSC only

(last year all

modes were

permitted)

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139(4A):

Trusts

139 (4C) Organisations referred to in sub-section

21 / 22B / 23A 23B / 23C / 24 46/

47 of section 10

139 (4D): University / College u/s

35(1)(ii) or (iii)

including section 25 company on which section 139(4A~4D)

applies

Category Form Mode



(other than 44AB)

7 E-File


7 Any mode

Other cases 7 Any mode

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Companies

excluding section 25

company on which section 139(4A~4D)

applies

Category Form Mode

All cases 6 E-File

With DSC

only

Firm Category Form Mode

Covered by provisions of 44AB 5 E-file w/DSC


Or

Required to furnish any audit

report electronically (other

than 44AB)

5 E-File

Income < = 5 lacs 5 E-File (last year all modes were permitted)

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Other cases not covered elsewhere

Category Form Mode



(other than 44AB)

5 E-File


5 Any mode

Other cases 5 Any mode

Eg., Approved EPF Trusts,

Municipal

Corporations,

Private Discretionary Trusts etc.

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Major changes in forms of income tax return for AY 2014-2015

No. of pages comparison

ITR Form Old pages New pages

1 5 5

2 10 12

3 12 14

4 26 30

4S 7 7

5 27 30

6 30 33

7 16 17

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Highlights of changes

• Schedule of capital gains revamped

• More disclosure on salary exemptions

• Long standing problem of TDS claim for assessees following cash method resolved

• Deduction for section 10A/10AA moved from schedule BP to TI

• CIN / LLPIN/ DIN mandatorily required

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Common changes…

• No manual/cheque refund option now.

• Mandatory digits for Bank account number reduced to 10 from 11

• Option provided for Modified Return u/s 92CD

• Notice date to be entered in case return filed in response to notice u/s 139(9) or 142(1) or 148 or 153A or 153C.

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Schedule wise changes

Part A - GEN

General

• To answer if any transaction has been made with a person located in a jurisdiction notified u/s 94A of the Act, in yes or no (Form 3-7)

• Non-residents to specify, if there is a permanent establishment (PE) in India (Form 4 only - In form 5~7 it was already present)

• Reference for date of furnishing section 115JC audit report introduced in form 4 and 5 (but is it available for online filing?)

• LLPIN, CIN and even DIN/DPIN is required now

• Private discretionary trust and Artificial juridical person specifically added as Status in form 5

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Part B - TI

Computation of Total Income

• STCG (u/s 111A) and STCG (others) merged as STCG

• LTCG and LTCG w/o Indexation merged as LTCG

• Line item for Winnings from lotteries, crossword puzzles, races, games, gambling, betting etc. removed

• New line item for Income chargeable to separate tax rate under iOS.

• Deduction u/s 10A and 10AA shifted to this part from schedule BP

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Part B - TTI

Computation of tax liability

• Line item added for rebate u/s 87A (form 1~4 and 4S)

• Surcharge added

Forms impacted:

1, 2, 3, 4 & 4S

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Schedule S

Salary

Exempt allowances to be further disclosed as:

i. Travel concession/assistance received (LTA)

ii. Tax paid by employer on non-monetary perquisite

iii. Allowance to meet expenditure incurred on house rent (HRA)

iv. Other allowances (residual entry)

(earlier no breakup was required)

Forms impacted:

2, 3 & 4

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Schedule HP

Income from House Property

Changes in disclosure and computation method -

• First declare and show Annual Value of complete property irrespective of your ownership share.

• Thereafter compute your share in the Income of a particular property.

• To impact joint-ownership cases.

• Mismatches in return of two/more co-owners may lead to scrutiny.

Forms impacted 2, 3, 4, 5, 6

No changes in form 7

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Schedule CG

Income from Capital Gains - Short Term

New line items for Non Residents:

• Sale of Securities by NR FIIs u/s 115AD (STCG/LTCG)

• Sale of shares or debenture of Indian company (LTCG)

• Sale of: (LTCG)

– unlisted securities as per sec. 112(1)(c)

– bonds or GDR as referred in sec. 115AC

– GDR of an Indian company referred in sec. 115ACA

• Sale of foreign exchange asset by Non-resident INDIAN (If opted under chapter XII-A) (LTCG)



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Schedule CG

Income from Capital Gains - Short Term

• New line items:

1. Sale of Immovable Property (STCG/LTCG)

– Need to provide value of property as per stamp valuation authority

– 50C value to be disclosed

2. Sale of Bond or Debentures (LTCG)

• New table for disclosures on deduction u/s 54/B/EC/F/GB & 115F

• New table for Intra Head set off of Losses



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Schedule OS

Income from other sources

Separate line item for Special rate Incomes (in addition to schedule SI)

– Winnings from lotteries, crossword puzzles, races, games, gambling, betting etc.

– Other Income u/c XII/XII-A

Forms impacted 2, 3, 4, 5, 6 & 7

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Schedule VI-A

Chapter VI-A deduction

New sections added:

– 80EE

– 80GGA

Forms impacted 2, 3, 4, 5 & 6

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Schedule SI

Income chargeable to tax at special

rates

New line items:

• 115AD (LTCG/STCG for FIIs on securities)

• 115AC (LTCG for non-resident on bonds/GDR)

• 115ACA (LTCG for an employee of specified company on GDR)

• 115E (LTCG for non-resident Indian on specified asset)

• 112 (LTCG on others)

• 115AC (Income of a non-resident from bonds or GDR purchased in foreign currency)

Consequential to changes in schedule CG

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Part A-P& L

Profit & Loss Account

Revenue/Income figures to be further divided into:

• Sale of goods

• Sale of services

• Other operating revenues (specify nature and amount) – All line items from PL to be specified.

On the similar line, all line items forming part of “any other income” have to be disclosed.

(More or less aligned to PL in form 6)

Only form 4

(Form 5&6 already had this)

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Part A-P& L


Commission (# 22),

Royalty expenses (# 23)

Professional / Consultancy fees / Fee for technical services and (# 24)

Interest (# 43)

are now divided into following sub-items:

• Paid outside India, or paid in India to a non-resident

• To others

(More or less aligned to PL in form 5 & 6) Only form 4

(Form 5&6 already had this)

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Part A-P& L


• On line of income side, all line items forming part of “Other expenses” to be provided now (# 38) (Form 4~5)

• Depreciation now includes amortisation (#44)

• STT includes CTT (#36)

(More or less aligned to PL in form 5&6 except CTT)

Only form 4

(Form 5 & 6 already had this)

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Part A- OI

Other

information

New sub line items for disallowance u/s 36:

• Amount of contribution to a pension scheme referred to in section 80CCD [36(1)(iva)]

• Amount of securities transaction paid in respect of transaction in securities if such income is not included in business income [36(1)(xv)]

Forms impacted

4, 5, 6

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Part A- OI

Other

information

New sub line items for disallowance u/s 37:

• Expenditure of capital nature [37(1)]

• Expenditure laid out or expended wholly and exclusively NOT for the purpose of business or profession [37(1)]

Changes in disallowance u/s 40:

• New sub-line item for disallowance as per section 40(a)(iib)

• Separate sub-line items for disallowance u/s 40 (a)(i), 40(a)(ia) and 40(a)(iii), instead of single entry.

Forms impacted 4, 5, 6

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Schedule BP

Income from Business and

Profession

• Income / Expenses considered under head of expenses:

– Give head wise breakup instead of single figure

• Provide separate line item of exempt income credited to PL (#5)

• Separate line item for deemed income u/s 43CA (Stamp duty valuation of property held as Stock in trade)

• References added for deemed income u/s 32AC/35AC/40A(3A)/33AC

• New table for Intra Head set off of Business Losses of current year inserted in schedule BP (just like in CG)

Forms impacted 4, 5, 6

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Schedule TDS 2

• Totally revamped

• Better late then never

• Boon to professionals/assessee following cash method of accounting

• Now you b/f and c/f unclaimed TDS

New Schedule BBS in form 6

Details of tax on distributed income of a domestic company on buy back of shares, not listed on stock exchange

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Thank you!

Economy & Finance

Recent changes in Income Tax Return forms for AY 2014-2015