New income tax form draws flak

NEW DELHI: Tax experts do not share the views of the Finance Ministry that new income tax form is simpler than Saral form and said it would increase the work of common tax assessee.

The new form, called '2F' is definitely not simpler than Saral as the tax assessee is to give each and every detail of expenses incurred by him, said direct tax expert with Deloitte Haskins and Sells Sameer Gogia.

The new tax form has Schedule 5, where assesses are supposed to file their cash flow statement-- opening cash and bank balance, various receipts and ougoings during the assessment year.

The schedule is optional for this assessment year, but would be made mandatory from the next year.

Schedule 5 will require assessee to file their statement of affairs (which is akin to balance sheet of corporates), Gogia said. It will make returns filing a cumbersome exercise, he added.

Noted income tax consultant Subhash Lakhotia said the new form would frighten the assessees.

 The new form is definitely not simpler than Saral, he said.

"One fails to understand how this form is going to be easy to fill up, easy to understand with little or no help (from tax experts) as is being said by tax authorities," he said.

Though he defended the logic behind filing of cash flow statement by assessees, he said the rationale should have been adequately explained by the tax authorities before coming out with the new form. "Assessees would be frightened by the new form," he said.

Filing of cash flow in schedule 5 of the new form is, however, optional in the current assessment year, making life easier for tax assessees at present, Lakhotia said.

Tax assessees need not worry also because they can file returns in Saral form or 2E, up to July 31.

Moreover, the new form is not meant for persons having business income, short-term capital gains from securities, and agriculture income, he said.

Ved Jain, central council member of the Institute of Chartered Accountants of India, however, said the new form is neither more difficult nor simpler than Saral.

 The new form was brought in by tax authorities to receive structured information on computers, he said. Saral form with documents and annexures did not give structured information.

That way, new form would help efforts of the income tax department to expedite computerisation process.

He said those who needed the help of chartered accountants and tax experts for filing the returns would continue to do so. It is not that the new form would increase dependence on tax experts and CAs, he said.

Admitting that filing returns on Saral form was not that easy, officials in the Revenue Department said cash-flow statement would reduce the chances of search and seizures and intrusive investigations.