ITR1 is for individuals earning income up to Rs 50 lakh; includes salary income, income from one house property, and other income
Have you filed your income tax return (ITR)? With the last date to do so fast approaching, tax payers must know key aspects of the process that are specific to this year. DNA Money spoke with top tax consultants to understand the nitty gritties.
Your form - Naveen Wadhwa, senior consultant, Taxmann.com said that this year the CBDT has reduced the number of ITR forms from 9 to 7. The most important forms are mentioned below.
ITR 1: It is meant for individuals earning income up to Rs 50 lakh, which includes salary income, income from one house property and other income like interest. However, such individuals cannot opt for ITR-1 if they have some unexplained income or dividend income above Rs 10 lakh.
ITR 2: It is meant for individuals and HUFs who are not carrying out any business or profession. Thus, taxpayers who are earning capital gains or income from more than one house property can file a return of income in ITR-2.
ITR 3: This return form is for individuals and HUFs who have a business or profession income. Partner of the firm will also need to file ITR 3.
New things: According to Archit Gupta, founder and CEO, ClearTax, this year tax filers must know the introduction of Section 44ADA for professionals having gross receipts less than Rs 50 lakh. Specified professionals can pay tax on presumptive basis now.
Next, there is a tax of 10% on dividend income exceeding Rs 10 lakh. This should be looked at with due care.
Aadhaar & cash deposits: From July 1, 2017, it is mandatory to link Aadhaar number with PAN to file ITR. Partnership firms are required to quote Aadhaar number of their Partner/members in ITR 5.
Wadhwa of Taxmann said that new ITR forms seek disclosure of cash deposits by taxpayers in their bank accounts during the demonetization period, i.e., from November 9, 2016, to December 30, 2016. However, taxpayers are required to fill up this column only if they have deposited Rs 2 lakh or more during the demonetization period.
"It may be noted that taxpayer is required to fill this column even if he has deposited cash below Rs 2 lakh in his various bank accounts but the aggregate cash deposit is Rs 2 lakh or more in all his bank accounts taken together," Wadhwa said.
Limit hikes: Gupta of ClearTax said there has been an increase in limits of section 80GG. "Previously the maximum deduction allowed under section 80GG for rent paid by an individual when HRA is not received was Rs 2000 per month. This has been increased to Rs 5000 per month," he said.
There rebate available u/s 87A increased from Rs 2,000 to Rs 5,000.
Last year, the CBDT had raised the threshold limit from Rs 25 lakh to Rs 50 lakh to make it mandatory for a taxpayer to provide details of his assets and liability. Taxpayers were just required to mention the cost of immovable property, jewellery, bullion, vehicles, shares, bank and cash balance, etc.
From current year, these taxpayers are now required to disclose the address of immovable property and interest held in the assets of a firm or AOP as a partner or member thereof in new ITR Forms if their taxable income exceeds Rs. 50 lakh.
Additionally, the surcharge has been increased from 12% to 15% for individuals having income above Rs 1 crore.
Change in due dates for payment of advance tax: Previously the due dates were September 15, December 15 and March 15, by when 30%, 60% and 100% tax was to be paid. "Now the first installment has to be paid by June 15. Also, the percentage of advance tax to be paid has changed. Now 15% should be paid by June 15, 45% by September 15, 75% and 100% by December 15 and March 15, respectively," said Gupta.
Also, till 2016 a return filed after due date could not be revised. But from 2017 a return filed after the due date(belated return) can also be revised.
Non-residents requirement: CBDT has inserted a new column in the ITR forms wherein non-residents are required to disclose details of their bank accounts outside India. Till now, only residents were required to disclose details of their off-shore bank account.
THE FINEPRINT
- ITR1 is for individuals earning income up to Rs 50 lakh; includes salary income, income from one house property, and other income
- ITR 2 is meant for individuals and HUFs who are not carrying out any business or profession
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- ITR 3: This return form is for individuals and HUFs who have a business or profession income
- This year tax filers must know the introduction of Section 44ADA for professionals having gross receipts < Rs 50 lakh
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