New Income Tax Return Forms: What to Expect

The Finance Ministry has released a note with an update on the Income Tax Return Forms for Assessment Year 2015-16 (Financial Year 2014-15). Tax payers have been anxiously waiting to hear on these forms. Given the forms have seen some changes and are a little delayed, the ministry has also proposed that the return filing due date be extended to 31st August 2015.

As per the note of the ministry there is a proposal to release a new Form ITR-2A for tax payers who own more than one house property and do not have any capital gains. Owners of one house property have to file ITR 1. But incase a tax payer owns more than one house property; they are required to file ITR2. ITR 2 was also applicable in cases where the tax payer has capital gains. Form 2A is proposed for those who do not have capital gains but are owners of more than one house property.

Those who have exempt income, without any limit, can now file ITR -1. ITR 2A will be also be applicable for those who have agricultural income exceeding Rs 5,000.

While the forms have not been notified yet, a lot more clarity will be available soon.

Keeping the spirit of simplification of ITR Forms, it has been proposed that main pages of ITR 2 and 2A shall have only 3 pages while further details may be provided in schedules.While further clarification should be available anytime soon on what those pages require, requesting fewer details will make tax filing easier for tax payers.

There may be a big relief for those who were wary of providing bank account balances, as only IFSC Code and bank account number may be asked. Details for dormant accounts, which have not been in operational since the past 3 years, may not be required to be provided in the ITR now.

In a welcome move, the ministry also said that details of foreign trips may not be required anymore; only quoting your passport number shall be enough. Many tax payers will be relieved from collating extra information for their foreign trips; they may no longer have to provide foreign trip details.

Expatriates who become residents by virtue of their extended stay are proposed to be exempt from reporting foreign assets which were acquired by them while they were 'non-resident' in India where such foreign assets do not earn any income. This is a big relief to expatriates who are not Indian citizens and come to India on business or work or for further studies and thereby attain Resident status due to an extended stay.