Which ITR form to fill and how to fill for FY 2016-17.
The Central Board of Direct Taxes (CBDT) notified tax return forms for the Financial Year (FY) 2016-17 on March 31, 2017. The government also mandated quoting of Aadhaar number/ Aadhaar enrolment number while filing the tax return if the same is filed on or after July 1, 2017.
According to latest notification dated May 11, 2017, relief from obtaining Aadhaar has been provided to below taxpayers:
* Taxpayer residing in the states of Assam, Jammu and Kashmir and Meghalaya;
* A Non resident taxpayer as per Income tax Act, 1961;
* A taxpayer who become major at any time during the previous year;
* A taxpayer who is not a citizen of India.
1. Below is a brief synopsis of the tax return forms applicable to an individual taxpayer for filing income tax return for the FY 2016-17: It is very important to file the correct tax return form, as filing of incorrect tax return form may make the tax return defective.
Below is a table to help you pick the right form
Applicability of the different ITR forms
Form -1 used to report of spouse of the individual taxpayer has income only from other sources which needs to be clubbed such income. However, if the spouse has earned income from capital gains, then the individual taxpayer will have to file
2. Major changes from last year:
separate column must be added in all forms to disclose aggregate cash deposited in excess of INR 2 lakh during the
demonetisation period i.e. 9 November 2016 to 30 December 2016.
A. ITR1 form
* simplified and one page;
* ‘Asset and Liability’ schedule has been done away with in ITR1 form since it is required to be filled only when the total income of the
taxpayer is more than INR 50 lakh.
B. ITR2 form
* Old ITR2, 2A and 3 have been merged into the new form ITR2;
* ‘Asset and Liability’ schedule (applicable to individuals having total income more than INR 50 lakh) now requires reporting of additional information with respect to bank balance (including deposits) as on 31 March 2017, description and address of immovable assets, cost of shares and securities held at at march 31st 2017, insurance policies, loans and advances given, interest held in assets of a firm or association of persons (AOP) as a partner or member etc.;
* ‘Schedule of information regarding partnership firms in which the taxpayer is a partner
*’Schedule BP (i.e. details of income from firms in which the taxpayer is a partner)’ has been inserted to report details of income in the nature of salary, bonus, commission or remuneration received from partnership firms;
* Under the ‘Schedule OS (i.e. Other Sources)’, additional information is sought with respect to cash credits, unexplained investments, unexplained money, unexplained expenditure, amount borrowed or repaid on hundi, dividend income from Indian companies in excess of INR 10 lakh, royalty income from patents etc.
C. ITR3 form
* additional information is sought Under the ‘Schedule OS’, with respect to cash credits, unexplained investments, unexplained money, unexplained expenditure, amount borrowed or repaid on hundi, dividend income from Indian companies in excess of INR 10 lakh, royalty income from patents etc.
3. General instructions for filling and submitting the tax return forms:
* The name filled in the ITR form should be as per the Permanent Account Number (PAN) card;
*The taxpayer should ensure that email address, phone number and postal address are correctly stated in the tax return since the same are used by Income tax Department for future correspondence with the taxpayer. Quoting of PIN code is mandatory;
* Quote Aadhaar/ Aadhaar enrolment number (if applicable) if filing the tax return after 30 June 2017;
* ITR1 form can be filed in paper form only by:
a) An individual age 80 years or more at any time during the financial year for which the return is being filed ; or
b) An individual/HUF whose income does not more than 5 lakh and no refund is claimed in the return of income.
* If the return is submitted in paper form, no document (including TDS certificate) should be attached to the return;
* While filling ITR1 in paper form, ITRV should be duly filled;
*All other return forms have to be filed electronically;
* Check Form 26AS for income and taxes reported by the deductor so that there is no mismatch with the income and credit of taxes claimed in the tax return visàvis Form 26AS;
* Ensure that outstanding taxes are paid before filing the tax return and use correct challan to avoid mismatch;
*Report all bank accounts held in India at any time during FY 201617 provided they have been operated in last three years. It
also includes reporting of joint accounts in which the taxpayer is the primary holder;
* Bank balance (including deposits) and cash in hand as on 31 March needs to be reported in ‘Asset and Liability’ schedule. While a
lay man do not know exact amount of cash held physically on 31 March 2017, assessee should ensured himself that declared amount can be reasonably justified in case of scrutiny by the Incometax Department;
* Schedule of Foreign assets requires information regarding assets held outside India at any time during the relevant year only by a taxpayer qualifying as Resident and Ordinarily Resident of India. Since the Black Money Act 2015 imposes a stringent penalty of INR 10 lakh for non disclosure of foreign assets and income, it is recommended to take help from a subject matter expert to avoid non compliance in terms of type of asset to be reported and the value at which the asset should be reported;
* As per the CBDT notification on foreign tax credit rules, a resident taxpayer claiming credit of taxes paid outside India on doubly taxed income should file Form 67 along with specified certificate or statement on or before the due date of filing the tax return. The manner to file Form 67 and certificate or statement is yet to be prescribed by the CBDT;
* Reporting and disclosure requirement in ITR3 form has been enhanced to ensure compliance by the taxpayers. However, a layman may not have complete details of requisite information sought in the tax return form and hence seeking help of a tax expert may be advisable;
* Taxpayers should ensure that the tax returns they file are verified, either manually or electronically, within 120 days of filing to avoid annulment of the tax return;
* In case the taxpayer wishes to manually verify the ITR-V form by sending a signed hard copy to CPC Bangalore, he should ensure that
ITRV is printed on A4 size paper and signed with blue ink only before sending to CPC Bangalore;
* ITRV can be e-verified by generating electronic verification code using Aadhaar, net banking, bank account number, demat account or registered email address and mobile number etc. of the taxpayer;
* Instructions for filling the tax return forms issued by CBDT and annexed to the relevant ITR form should be referred to before filing the tax return