Replacing it will be an inherently more complicated Income-Tax Return. There are eight of them, with serial numbers running from 1 through 8, for various categories of taxpayers.
New form will be cumbersome for salaried class
MUMBAI: Your tax returns are set to get tougher. Saral, the old tax return meant for salaried people, is on its way out. Replacing it will be an inherently more complicated Income-Tax Return – ITR for short. There are eight of them, with serial numbers running from 1 through 8, for various categories of taxpayers.
Salaried taxpayers who earn only interest income will have to file their returns using ITR-1; those who dabble in mutual funds and shares will have to use the ITR-2 form.
The new forms demand much more information from taxpayers, especially on high-value transactions. Last year, the I-T department drew protests from the public when it demanded cash-flow statements in Form 2F. ITR-2 doesn’t demand that, but it is almost as bad.
The key high-value transactions you will have to track are: a) purchase of shares worth Rs1 lakh or more through a rights issue or IPO; b) purchase or sale of mutual fund units of Rs2 lakh or more in a year; c) credit card payments amounting to Rs2 lakh or more in a year; d) cash deposits of Rs10 lakh or more in a savings account in a year; e) any investment in bonds or debentures, including RBI bonds, of Rs5 lakh or more; and f) property purchase or sale of Rs30 lakh or more.
The real problem is not the one-time big purchases of property or big-ticket investments; it’s the small, daily purchases made through credit cards that could prove truly taxing, if the total payments exceed Rs2 lakh in a year. Individuals will have to keep detailed records of their transactions throughout the year.
Let’s take the case of credit card payments. Individuals using credit cards will have to maintain credit card bills throughout the year to fill up the form in detail.
The new forms are complex and intimidating. Simplicity seems to have been compromised to obtain accuracy and detail. The seeking of detailed, exhaustive information pertaining to each source of income has led to an increase in the bulk of the form. For example, a salaried taxpayer having investment income will have to fill in six pages with 15 schedules. For a professional, the count increases to 20 pages and 31 schedules. It does not get any better for firms. More on p19
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