Latest Key Changes in ITR Forms for AY 2015-16

I am sharing with you an important CBDTNotification No. 49 dated 22th June 2015 regarding CBDT notifies
new IT return forms for AY 2015-16; ITR 1, ITR 2, ITR 2A and ITR 4S notified.

Scrutiny of Return Forms for the Assessment Year 2015-16

The Rule 12 of the Income-tax Rules was amended vide Notification
No. 41/2015, Dated 15-04-2015. The new ITR Forms 1, 2 and 4S were notified for
the assessment year 2015-16 vide said notification.

In view of various representations received it was announced that these ITR
forms will be reviewed. Having considered the responses received from various
stakeholders, new ITR forms have been notified vide Notification
No. SO 1660, dated June 22, 2015.

At present individuals and HUFs having income from more than one house property
or capital gains are required to file Form ITR 2. It was observed that majority
of taxpayers who file Form ITR 2 do not have capital gains. With a view to
provide a simplified version of this form for these individuals and
HUFs, a new Form ITR 2A is notified which can be filed by an
individual or HUF who does not have capital gains, income from
business/profession or foreign asset/foreign income.

Further, it shall not be mandatory to furnish details of foreign trips in new
Form ITR 2. Only Passport Number, if available, would be required to be
furnished in the Form 2.

As regards furnishing of details of the bank accounts in ITR forms, only the
IFS Code, account number of all current/savings accounts which are held at any
time during the previous year have to be furnished. The balance in accounts
will not be required to be furnished. Details of dormant accounts which have
not been operational during the last three years are not required to be
furnished.

It is further provided in Rule 12 that individuals having exempt income without
any ceiling (other than agricultural income exceeding Rs. 5,000) can also
file return in Form ITR 1. If taxpayer has agricultural income the return
shall be filed in ITR 2 or ITR 2A, as the case may be.

Till assessment year 2014-15, individuals or HUFs, who were otherwise not
liable to file return of income electronically, could claim tax refund by
filing return of income in physical form. However, Rule 12 as notified on
15-04-2015, has made it mandatory for every taxpayer to file return of income
electronically so as to claim refund of tax from the department.

Under the extant Rules all taxpayers including super senior citizen (being an
individual of 80 years or more) are required to file return of income
electronically, if their total income exceeds five lakh rupees. Now an option
has been given to the super senior citizens whose total income exceeds five
lakh rupees or who is claiming income-tax refund, to file return of income in
physical form, provided return is furnished in ITR- 1 or ITR- 2.

As per the new provision (as notified on 15-04-2015) every individual or HUF
whose total income exceeds five lakh rupees or who is required to file return
in Form ITR-3 or ITR-4 shall have to file return of income electronically.

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If an individual (not being a citizen of India) is in India on a business,
employment or student visa purposes and he acquires any asset during the
previous year in which he was a non-resident, such asset shall not be required
to be reported in Schedule FA – Details of foreign assets and income if no
income is derived from that asset during the current previous year.


II. Key changes in new ITR Forms

1.
 Introduction of ITR 2A

[ITR 2A] At present individuals/HUFs having income from more than one
house property or capital gains are required to file Form ITR-2. It is,
however, noticed that majority of individuals/HUFs who file return in Form ITR
2 do not have capital gains. With a view to provide a simplified form for these
individuals/HUFs, a new Form ITR 2A has been introduced which can be filed by
an individual or HUF who does not have capital gains, income from
business/profession or foreign asset/foreign income or have not claimed relief
under section 90/90A/91.
ITR 2A includes almost all fields as were contained in ITR 2, except
information relating to capital gains, foreign asset/foreign income and relief
under section 90/90A/91.

2.
 Details of all bank accounts
held by assessee
[ITRs 1, 2, 2A, 4S]
Under new ITR form, an assessee is
required to furnish details of all bank accounts held by him in India at any
time during the previous year. However, the new ITR forms notified on June 22,
2015 provide immunity to the taxpayer from furnishing details about the bank
accounts which have become dormant.
The ‘dormant‘ account shall be those current and saving bank accounts
which have not been operational for more than 3 years.
Following details shall be reported in
respect of each bank account held by assessee in India:
a) IFSC Code of the Bank
b) Name of the Bank
c) Name of joint holders (if any) (withdrawn)
d) Account Number
e) Account Balance as on 31st March
of the previous year
 (withdrawn)
fNature of the bank
account, i.e., current account or saving account

3.
 Details of foreign
travelling shall not be reported, except Passport No.
[ITRs 2, 2A]
If assessee has travelled overseas, the
details about such travelling is not required to be furnished in the new return
forms. However, the individual should furnish his Passport number, if
available.

4.
 Reporting of Aadhaar Number
[ITRs 1, 2, 2A, 4S]
The ITR forms require assessee to
provide his Aadhaar Number (if assessee has obtained the same).

5.
 Date of Formation by HUF
[ITR 2, 2A, 4S]
In ITR forms, an HUF is required to
report date of its formation.


6.
 Reporting of amount that has remained unutilized in
capital gains account

[ITR 2]
If assessee is unable to roll over the
investment in new capital asset within the specified time period so as to avail
of the exemptions under section 54, 54B, etc., he can deposit the sum in
capital gains account scheme.
In that case, exemption to be granted to assessee shall be aggregate of actual
investment in new capital asset and amount deposited in capital gains account
scheme before due date of filing of return of income.
The amount so deposited in the capital gains account scheme should be utilized
for investment in specified asset within specified time-limit, otherwise the
unutilized amount shall be chargeable to tax in the previous year in which the
time-limit expires. The unutilized amount would be taxable as short-term
capital gain/long-term capital gain, depending upon the nature of original
capital gain.
In ITR forms, requisite details are required to be provided in respect of
amount so deposited in capital gains account scheme.
The details which are required to be
provided if amount is deposited in capital gains account scheme are as:
follows:
a)     
Previous year in which asset is
transferred
b)     
Section under which exemption is claimed
c)      
Year in which new asset is acquired
d)     
Amount utilized out of capital gains
account scheme to acquire new asset
e)      Amount that has remained unutilized in
capital gains account scheme or             amount which is not used for making investment
in specified new asset

7.
 Return filed pursuant to
order of CBDT under Section 119
[ITR 1, 2, 2A, 4S]
For avoiding genuine hardship, by
general or special order, the Board may authorize any tax authority other than
CIT (Appeals) to admit an application or claim for any exemption, deduction,
refund or any other relief after the expiry of the period specified under the
Act.
If assessee is filing return of income pursuant to an order of CBDT under
Section 119(2)(b), it shall tick the check-box [ under Section 119(2)(b)]
introduced in the ITR form.
Generally CBDT extends date of filing of return under Section 119 in cases of
natural calamities or when taxpayer faces genuine hardship in certain
circumstances. Recently, the due date of filing of return for J&K taxpayers
was extended by the CBDT due to devastation caused by flood in J&K.

8.
 Details of income taxable under DTAA
[ITR 2, 2A]
If capital gain or residuary income of
assessee is taxable as per provisions of the DTAA entered into between India
and a foreign country, of which the assessee is a resident, following details
shall be furnished in the return:
a)      Name of the Country
b)      Relevant Article of the DTAA
c)       Rate of tax under DTAA (applicable in case of residuary income)
d)      Confirmation if TRC has been obtained
e)       Corresponding section of the Act which prescribe the rate of tax
(applicable        in case of residuary income)
f)       
Amount of income

Further, the special tax rate on capital gain or residuary income and tax on
such income as per DTAA shall be disclosed separately in Schedule SI.

9.
 Advance Pricing Agreement –
Code for filing modified return withdrawn
[ITR 2]
As per provisions of Section 92CD – Effect of Advance Pricing Agreement
(‘APA’), where any person has entered into an APA and prior to the date of
entering into the agreement any return of income has been furnished under
section 139 for any previous year to which such agreement applies, such person
shall furnish, within a period of three months from the end of the month in
which the said agreement was entered into, a modified return in accordance with
the APA. In the ITR forms notified earlier on April 15, 2015, the taxpayer was
required to select the relevant check-box in Part A – Gen [Modified Return –
Section 92CD] if modified return was being filed pursuant to an Advance Pricing
Agreement. The check-box for selecting the option of ‘Modified Return – Section
92CD’ has been withdrawn from ITR 2 as notified on June 22, 2015. Such an
option is withdrawn from ITR 2 for the reasons that the taxpayer who enters
into an APA will have the business income and in that case, he shall file
return of income in ITR 4 only. Similarly, the additional verification clause
introduced in the ITR form notified earlier has also been withdrawn.

10.
 Details about the foreign
assets and foreign income
 [ITR 2]
If an individual (not being a citizen of India) is in India on a
business, employment or student visa purposes and he acquires any asset during
the previous year in which he was a non-resident, such an asset shall not be
required to be reported in return if no income has been derived from that asset
during the current previous year.

The ITR forms seek more details about the foreign assets and income from any
source outside India. Schedule FA is substituted which requires assessee to
provide detailed information about such foreign assets and income. The
additional disclosures in the new ITR form shall be as under:

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1)      
Foreign Bank Account:
a)     
Status of account holder (i.e.,
Owner/Beneficial Owner/Beneficiary)
b)     
Date of opening of such bank account;
c)      
Interest accrued in the account; and
d)     
Details about the interest offered to
tax in the return.
2)     
Financial Interest in a foreign
entity:
a)      Nature of financial interest (direct, beneficial ownership or
beneficiary) in 
          such entity;
b)      Date since such interest is held;
c)       Income accrued from such interest;
d)      Nature of income; and
e)      Details about the income offered to tax in this return.
3) Foreign Immovable Property or any other capital asset
a)      Whether ownership in such asset is direct or beneficial or as
beneficiary;
b)      Date of acquisition of such asset;
c)       Income derived from such asset;
d)      Nature of income; and
e)      Details about the income offered to tax in this return

4) Signing authority in any foreign account
a)    Whether income accrued in such account
is taxable in assessees hands; and
b)   
If yes then furnish details about the
income offered to tax in this return

5) Trustee or Beneficiary or Settler in a foreign trust
a)    Date since the position of trustee or beneficiary or settler held in
foreign trust;
b)    Whether income derived from the trust is taxable in assessees hands; and
c)     If yes, details about the income offered to tax in this return

6) Any other income derived from any source outside India
a)      Country Name and Code;
b)      Name and address of the person from whom income is derived;
c)       Amount of income derived;
d)      Nature of income;
e)      Whether income is taxable in assessees hands; and
f)       
If yes, details about the income offered
to tax in this return.

11. Agricultural income
[ITR 2, 2A]
The Schedule EI in ITR forms requires assessee to provide following
figures separately:
a)     Gross agricultural receipts
b)    Expenditure incurred on agriculture
c)     Unabsorbed agricultural loss of previous eight assessment years
d)    Net agricultural income for the year.


12.
 Distinction between heavy and light good carriages
removed
 [ITR- 4S]
The Finance (No. 2) Act, 2014 amended Section 44AE to remove the distinction
between heavy goods carriages and light good carriages. From Assessment Year
2015-16, presumptive income in respect of goods carriages is computed at a
uniform rate of Rs. 7,500 per month for any goods carriages.
Therefore, the ITR forms remove the concept of type of goods carriages and to
provide for uniform rate of Rs. 7,500 per month for computation of presumptive
income of goods carriages.

13.
 Acknowledgment of details
relating to exempt income in ITR-V
[ITRs- 1, 2, 2A, 4S]
Relevant columns have been provided under ITR-V to acknowledge exempt
income, inter-alia, agricultural income and other exempt incomes.

14.
 Concessional tax rate in case
of sale of listed securities (other than unit)
[ITR 2]
As per the existing proviso to Section 112, if tax payable on long-term
capital gains arising on transfer of a capital asset, being listed
securities or units or zero coupon bonds, exceeds 10% per cent
of the amount of capital gains before allowing for indexation adjustment, then
such excess shall be ignored.
The Finance (No. 2) Act, 2014 amended the said proviso to provide that the
concessional rate of tax of ten per cent shall be available only for long-term
capital gain arising from transfer of listed securities(other than unit) and
zero coupon bonds. Therefore, consequential amendment is made to ITR forms in
accordance with the amendment.

15.
 Sale of units of business trust
[ITR- 2]
The Finance (No. 2) Act, 2014 introduced a new Chapter XII-FA in the I-T
Act to provide for special provisions relating to business trust. The special
taxation regime contains provisions for taxability of income in the hands of
business trusts and the income distributed to its unit holders.
Consequential amendment is made to Section 10(38) to provide that long-term
capital gain arising from transfer of unit of a business trust on which
securities transaction tax (STT) is paid shall be exempt from tax.
Similarly, Section 111A has been amended to provide that short-term capital
gain arising from transfer of unit of a business trust on which STT is paid
shall be chargeable to tax at reduced rate of 15%.
Necessary changes have been made in this regard in the ITR forms.

16.
 Securities held by FIIs
[ITR 2]
Section 2(14) of the Act was amended by the Finance (No. 2) Act, 2014 to
provide that securities held by FIIs shall be deemed as ‘Capital Assets’. The
amendment was made to end the controversy of categorization of income of FIIs
as business income or capital gains. Consequential changes have been made in
ITR forms in this regard.

17. Reshuffling of Schedules
[ITRs 1, 2, 2A, 4S]
The information required to be filed in the following Schedules has been
reshuffled:
a)    Schedule BA – Details of Bank Accounts [ITRs 1, 2, 2A, 4S]
b)    Schedule IT – Details of payments of Advance Tax and Self-Assessment Tax    
        [ITR 2]
c)    Schedule TDS1 – Details of Tax Deducted at Source from Salary [ITR 2]
d)    Schedule TDS2 – Details of Tax Deducted at Source on Income [ ITR 2]
e)   Schedule FT – Passport Number. No need to furnish details of foreign
travel  and expenses incurred during the year. [ITRs 2, 2A]

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