Expats who claim tax relief in India under double taxation avoidance agreements will now have to provide extensive disclosures such as tax identification number of their home country, assets held outside the nation and overseas tax residency certificate, according to the latest income tax return forms.
Any person who is a director or shareholder in an unlisted company will need to disclose this along with details and permanent account number of the company.
The income tax department notified the return forms for individuals and companies for the assessment year 2019-20 on Friday. The last date of filing the income tax return (ITR) is July 31for those who are not required to get their accounts audited. This includes individual taxpayers .
Overseas residential details along with tax identification numbers and residential status in India will also need to be provided. Overseas Citizens of India and Persons of Indian Origin claiming non-resident status in India will be required to report the number of days stayed in the country in the relevant tax year and in the previous four tax years.
NO CHANGES IN ITR-1
“The tax return forms released for the tax year 2018-19 have clearly tried to bring more transparency through disclosures for globally mobile employees who avail relief under tax treaties,” said Amarpal Chadha, partner and India mobility leader, EY.
Experts hope for a reduction in the need for further enquiries by the income tax authorities.
“With so much of adoption of automation, hopefully this will reduce further questioning or need for clarification by the tax authorities as they will now have detailed information already with them,” said Kuldip Kumar, partner, PwC.
Additional reporting requirements for Indian residents include a detailed breakup of salary including directorships held, unlisted securities, mode of donation payments and agricultural land details if farm income exceeds a specified limit.
ITR-1 or Sahaj to be filed by salaried workers has not been changed but 2, 3, 5, 6 and 7 have been amended slightly. ITR-1 is filed by individuals with a total income up to Rs 50 lakh from salary and having one house besides other sources such as interest and agricultural income up to Rs 5,000. This cannot be used by an individual who is a company director or has investments in unlisted equity shares or has an income on which tax has been deducted in the hands of another person. “Taxpayers need to be very careful this time and will need to collate additional details and reporting requirements well in advance this year in order to be able to fulfil the reporting requirements prescribed in new ITR forms,” said Shailesh Kumar, director, Nangia Advisors (Andersen Global). “We also expect greater automated scrutiny of ITRs, based on extensive data, details required and furnished in ITRs.”
ITR-2 is filed by individuals and Hindu Undivided Families (HUFs) not having income from profits and gains from business or profession, while ITR-3 is filed by individuals and HUFs having income from profits and gains from business or profession. ITR-4 or Sugam is meant for individuals, HUFs and firms other than limited liability partnerships (LLPs) having a total income of up to ?50 lakh and also having presumptive income from business and professional sources.
There is a bigger list of exclusions for ITR-4, which cannot be used by individuals or HUFs not resident and ordinarily resident, non-resident partnership firms, directors of companies or persons having investment in unlisted equity shares or having more than one house property.
Those filing ITR-3 and ITR-6 (companies) will have to disclose information regarding turnover or gross receipts reported for goods and services tax included now in ITR-3 and ITR-6 also. Last year, it was applicable only to assessees filing ITR-4.
Source : Economic Times