Non-salaried ITR forms are out, All NRI Pay Attention

The Central Board of Direct Taxes (CBDT) has notified the revised income tax (I-T) return forms for non-salaried individuals for the assessment year 2015-16 (financial year 2014-15, which ended as of March 31, 2015). 

Forms ITR-3 to ITR 7 have been prescribed for tax payers such as sole proprietors (businessmen or professionals), limited liability partnerships, partnership firms, Hindu Undivided Families (HUFs) and companies (see table). 

Companies are required to file their tax return using Form ITR-6, which as compared to earlier years calls for a plethora of additional disclosures. Some of these disclosures such as corporate social responsibility (CSR) expenditure relate to new regulations applicable to India Inc for the first time during the FY 2014-15 others have been introduced to enable tax authorities to keep better track of overseas assets and income. The latter, could help tax authorities detect money laundering. 

India Inc has for the year ended March 31, 2015, incurred for the first time, expenditure towards corporate social responsibility. Such expenditure is not treated as a business expenditure under section 37(1) of the I-T Act and is not allowed as a deduction for tax purposes (In other words, it does not reduce the taxable income of the company). Thus if CSR expenditure has been debited to the profit and loss account of the company, it needs to be disclosed separately in Form ITR-6. Investment allowance was another new provision introduced in tax laws. 

If a company invests Rs. 25 crore or more in new plant and machinery during a year, a deduction of 15% of its value was allowed as an investment allowance. Details have to be provided of such investment allowance claimed. ITR-6 also calls for details of all domestic bank accounts, such as name of the bank, IFSC code, account number, and nature of the bank account. No details are required in respect of dormant bank accounts which have not been operational for the past three years. 

To keep better track of foreign income earned by India Inc and identify any possible instances of round tripping or money laundering, a detailed schedule FA has been introduced in ITR-6. 

India Inc has to fill in details of foreign assets including foreign bank accounts, interests in overseas trusts and immovable property held 'at any time during the financial year'. This also includes disclosure of foreign assets which are held as a beneficiary and not just direct ownership. The income from such foreign assets also requires to be disclosed. 

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New Rules for filing Tax Returns in India

New forms, additional information, completely paperless filing.... the Finance Ministry has introduced several changes in the way taxpayers will file their returns this year. As a taxpayer you need to be aware of these changes lest you file an incorrect return that gets rejected or results in a scrutiny notice.

This week's cover story looks at the changes in the tax filling process and documentation and explains what taxpayers need to do. There is also a smart step-by-step guide to tax filing that will ensure an error-free return.

Many taxpayers tend to believe that if they have no tax liability or have already paid all taxes, they need not file their returns. "It does not really matter whether you have paid any taxes or not.

Even if all your taxes are paid through TDS by the employer and bank or you have paid an advance tax, you still need to file returns if your annual income exceeds Rs 2.5 lakh, .But before we get there, let's look at the major changes in this year's tax filing rules

Extended deadline

The filing deadline has been extended to 31 August so you have about six weeks to file your return. But it's best not to delay the process unnecessarily. If you have got all your documents (Form 16 from employer, bank statement, TDS details, capital gains statement) in place, file your return as soon as possible and get over with it. Why delay something that you cannot avoid.

New tax forms

The massive outcry against the mandatory disclosures of foreign trips and dormant bank accounts in the new ITR forms has forced the government to revise them. The revised forms are much simpler and taxpayerfriendly. But though you won't have to fill a 14-page return, the new forms have retained some of changes proposed earlier.

A new three-page ITR 2A form has been introduced for individuals and HUFs who may own more than one property, but do not have any taxable capital gains, income from business or profession or foreign asset and income outside India.

ITR-1 (Saral) can now be filed by individuals even if they have exempt income. Earlier, individuals were not allowed to use this form if they had exempt income exceeding Rs 5,000. However, individuals having agricultural income exceeding Rs 5,000 will still not be able to use Form ITR-1.

E-filing scope widened

One major change is that e-filing is now mandatory for taxpayers who are claiming a refund. Even if their income is below Rs 5 lakh, they still need to take the online route. However, this rule does not apply to super senior citizens above 80 years. They can still file their taxreturns in the physical mode.

However, e-filing has its own benefits. "E-filed tax returns get processed much faster and the refunds gets credited early and go directly into your bank account. The taxpayer can also track the status of processing of his tax return online".

If you are familiar with tax forms and rules, you can file for free on the Income Tax Department website. Some portals also allow free tax filing. Others charge a small fee for guiding you. Take professional help if not sure. It costs a little, but will ensure that your tax return is error-free.

For more information on tax filling and know how to save tax on your earning please visit by clicking on Tax consultancy in Mumbai