Several changes have been made in the tax filing rules since last year. Find out what these mean for you
As the deadline for filing tax returns approaches, thousands of Indians who have worked abroad will be scrambling to gather the information required to be filled in the new tax forms. This year’s budget had proposed that individuals who have assets abroad must file their tax return and mention details of their foreign assets in the forms.
This is just one of the several changes in the tax filing rules this year. The new forms are a wake-up call for taxpayers who have not been entirely honest in paying their taxes. Nearly 5% of the respondents in an online survey conducted recently said that they have under-reported their income quite a few times. Another 10% said they have done so just once or twice. We believe there is also a large community of innocent offenders who don’t even know that they are falling foul of the tax laws. To ensure that your tax returns are flawless and you don’t end up on the wrong side of the law, read our current article to understand the changes in this year’s tax forms.
E-filing for income over 10 lakh Any individual or Hindu Undivided Family (HUF) with an annual income of 10 lakh and above will now have to compulsorily e-file the income tax return.
E-filing for income over 10 lakh Any individual or Hindu Undivided Family (HUF) with an annual income of 10 lakh and above will now have to compulsorily e-file the income tax return.
The government wants to nudge taxpayers to e-file because it improves tax compliance and reduces its own back-office workload. When returns are filed physically, data entry operators manually feed the information into the system. In the process, they introduce many mistakes in the return, which leads to delays in refunds or, worse, a notice from the tax department.
Declaration of foreign assets The foreign assets include bank accounts, immovable property and interest in any company. The taxpayer will have to mention the peak bank balance in his account during the year as well as the total investment in other assets at cost price.
Declaration of foreign assets The foreign assets include bank accounts, immovable property and interest in any company. The taxpayer will have to mention the peak bank balance in his account during the year as well as the total investment in other assets at cost price.
By introducing this change, the government intends to track the undisclosed income from these assets.
Details of tax relief claimed If the assessee has claimed relief for taxes paid abroad, he will have to mention details in his return. He will have to mention the name and code of the country visited, income earned, taxes paid, and the tax identification number in the foreign country.
Ownership pattern of property The new reporting requirements have also plugged a big loophole in the way income from property is reported. Till now, a taxpayer had to just mention the property and the income received as rent. Now he will have to disclose the ownership details in the tax return. If the property is jointly owned, the percentage share in the property and the details of the co-owner need to be mentioned. “This also means that the rental income will have to be proportionately divided among the joint owners.
Deduction for donations Taxpayers who want to claim tax deduction for donations given to organisations must provide full details of the recipient. They must give the name and address of the organization, its PAN, amount of donation and the amount eligible for deduction.
Bank details now mandatory In the new forms, you have to mention your bank account details even if there is no refund. Despite the changes, the basic rules remain the same. If you have some unpaid tax, pay it right away before you file your return. File by the due date to escape penalty. If you miss the 31 July deadline, you can always file by the end of the assessment year. You will, of course, forego some privileges enjoyed by taxpayers who file their returns by due date. For instance, you will not be allowed to carry forward short-term and long-term capital losses (except from house property). This provision can be very helpful, especially if you have lost money in stocks
Details of tax relief claimed If the assessee has claimed relief for taxes paid abroad, he will have to mention details in his return. He will have to mention the name and code of the country visited, income earned, taxes paid, and the tax identification number in the foreign country.
Ownership pattern of property The new reporting requirements have also plugged a big loophole in the way income from property is reported. Till now, a taxpayer had to just mention the property and the income received as rent. Now he will have to disclose the ownership details in the tax return. If the property is jointly owned, the percentage share in the property and the details of the co-owner need to be mentioned. “This also means that the rental income will have to be proportionately divided among the joint owners.
Deduction for donations Taxpayers who want to claim tax deduction for donations given to organisations must provide full details of the recipient. They must give the name and address of the organization, its PAN, amount of donation and the amount eligible for deduction.
Bank details now mandatory In the new forms, you have to mention your bank account details even if there is no refund. Despite the changes, the basic rules remain the same. If you have some unpaid tax, pay it right away before you file your return. File by the due date to escape penalty. If you miss the 31 July deadline, you can always file by the end of the assessment year. You will, of course, forego some privileges enjoyed by taxpayers who file their returns by due date. For instance, you will not be allowed to carry forward short-term and long-term capital losses (except from house property). This provision can be very helpful, especially if you have lost money in stocks
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