The New Income Tax Returns (ITR) form introduced by the Central Board of Direct Taxes (CBDT) will be applicable for the assessment year (AY) 2018-19. The last date to file your income tax returns for the financial year 2017-18 (AY 2018-19) is 31st July.
The last date to file returns for the assessment year financial year 2016-17 (AY 2017-18) was 31st March.
The changes include:
1. Salary Details
The new income tax return forms require salaried individual tax payers to elaborate the details of their salary and income from property. Details like allowances that are not exempt, deductions claimed under section 16, value of perquisites and profit in lieu of salary will have to be mentioned in a break up format.
You can find these details in your From 16.
2. Sahaj or ITR 1
ITR 1 or Sahaj is now restricted to Indian residents who are individual salaried tax payers with income upto Rs 50 lakh and one house property. It will include income from your salary and interest earned.
It will now be mandatory for small businesses to report goods and services tax identification number (GSTIN) and quote gross receipts as per GST returns for filing returns. Individuals and HUFs (Hindu Undivided Families) that have presumptive income (under section 44AD and section 44AE) should file ITR-3 or ITR-4.
This will help the government check tax evasion by linking the direct and indirect income data of these entities.
Partners in a firm will require to file ITR-3 instead of ITR-2.
Non-resident Indians (NRI) can give their foreign bank account details now to claim credit or refunds. Earlier, only bank accounts held in India were allowed.
NRIs however cannot required to file form ITR 2 instead of ITR 1. As mentioned before, Sahaj or ITR 1 will only be limited to residents of India. Also, ITR 2 now has additions that requires more details.
5. Paper filing
Individuals who are 80 years old or older in the financial year or individuals and HUF whose income does not exceed Rs 5 lakhs and have not claimed a refund can file ITR 1 or ITR 4 in the paper format.
Benefits of filing Income Tax Returns
Even if you fall below the tax bracket, filing your income tax returns is a good idea as the ITR receipts acts as a useful document. It is more detailed than Form 16, therefore, it is considered in many places for proof requirements.
You can use it as an address proof. It is also a very important document for a bank loan application. Banks usually ask for income tax returns fling proof of 2-3 years.
When applying for compensation for losses in the previous year, ITR receipt is required. The unadjusted losses cannot be carried forward to future years if you do not file the returns on time.
Also, late filing fine does not look good on your credit profile. For the FY 2017-18, non-filing of ITR will lead to a fine of Rs 10,000. Your credit card application will also be rejected by the bank on failure to file the returns.