With the onset of new Financial Year i.e., 1^st April, 2016, it’s now high time to get the returns filed for FY 15-16 as the Finance Ministry has notified the new ITR forms with certain mandatory disclosures for ultra-rich to be complied with.

The new ITR-1 (SAHAJ) appeals to be challenging for the individual taxpayers as it requires the disclosure of net wealth by high earners. This change in the ITR shall require the taxpayers to maintain their Books of Accounts too, so as to declare the correct value of their assets and liabilities.

 

The Form has already been released by the Department, so the taxpayers should get prepared with their documents and start filing their returns within the stipulated time (31^st July, 2016). As the forms are released with the start of the Assessment Year 2016-17, this time the extension of the above due date is not likely to be made by the department, so it’s time to get the returns filed at the earliest. The New ITR 1 (SAHAJ) – Calls for Net wealth Disclosure for the following applicable taxpayers :

 

Applicability of ITR 1 (SAHAJ)

 

ITR 1 (SAHAJ) can be used by the Individuals having the following incomes:

 

• Income from Salary/Pension; or

 

• Income from one house property (excluding cases where loss is brought forward from previous years); or

 

• Income from other sources (excluding winnings from lottery and income from race horses).

 

However, in case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income too is limited to the above specifications.

 

Non – Applicability of ITR 1 (SAHAJ)

 

The Individuals having income from any of the following sources has been specifically excluded from using the ITR Form 1:

 

• Income from more than one House Property

 

• Income from winnings from lottery or income from race horses.

 

• Income includes any income chargeable to tax under the head “Capital Gains”. –

 

• Agricultural income in excess of Rs. 5,000.

 

• Income from business or profession.

 

• Loss under the head “Income from other sources”.

 

• Person claiming Relief of foreign tax paid under Section 90 or 90A or 91.

 

• Individual who is a Resident and has –

 

  (i) assets (including financial interest in any entity) outside India

 

        OR

 

  (ii)signing authority in any account located outside India.

 

Key Changes in the ITR Form (ITR-1 SAHAJ)

 

• Declaration of value of assets and liabilities by Individuals earning above Rs.50 lakhs:-

 

The new ITR form, requires individuals to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs. A new reporting schedule i.e., ‘Schedule AL – Asset and Liability at the end of the year’ has been introduced in the ITR. Assets include immovable assets and movable assets.

 

Immovable assets: taxpayers have to disclose the cost of land and building.

 

Movable assets: taxpayers have to disclose the cost of Jewellery, bullion, vehicles, Yachts, boats, aircraft and cash in hand.

 

However, it has not yet come with the required instructions for determining the cost of the immovable and movable assets. Further, the taxpayers are also required to disclose all liabilities in relation to such assets.

 

• TCS (Tax Collected at Source) credit for individual taxpayers:-

 

Provisions were introduced by the Finance Act, 2012 to reduce the practice of cash payments for purchase of bullion and Jewellery and for curbing the flow of unaccounted money in the trading system. It provides that the seller of bullion and Jewellery shall collect TCS at 1% of sale consideration from buyer if such sale consideration is received in cash and it exceeds:

 

Bullion: Rs. 2 Lakhs

 

Jewellery: Rs. 5 Lakhs.

 

However, in the absence of any row in the ITR Form, individual taxpayers were unable to claim the credit of such TCS {as per Form 27D issued by the Collector(s)}. Therefore, the newly reformed ITR-1 (SAHAJ) provides an option to claim TCS by the individual taxpayers.

 

• Additional deduction for contribution to NPS under Section 80CCD :-

 

Finance Act, 2015 introduced a new Sub – Section (1B) in Section 80CCD to provide for an additional deduction of up to Rs. 50,000 for investment in National Pension Scheme. Accordingly, a new row is now introduced in the ITR Form to claim benefits of such additional deduction.

 

The above changes in the ITR form bring in the new challenges to be complied with. So, start filing your returns and get your accounts prepared at earliest without any delay.

 

Download ITR-1 (SAHAJ). 

 

For any queries or filing your returns, please get in touch with us @ taxmantra.com .

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