CHANGES IN INCOME TAX RETURNS/NEW RETURNS
FOR I.T.A.Y. 2016-17
- New Schedule has been introduced in ITR 1, 2, 2A, 3, 4, 4S requiring individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs.
Assets include immovable assets and movable assets.
Immovable Assets : Disclose cost of land and building.
Movable Assets : cost of following assets needs to be disclosed
- cash in hand
- ITR Forms 1, 2, 2A provide an option to claim TCS by the individual taxpayers in case of Deduction of tax u/s 206 (1d) by the seller.
Section 206(1D) 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:
i) Rs. 2 lakh, in case Bullion; and
ii) Rs. 5 lakh, in case of Jewellery.
- Now firms can file ITR 4S in case of presumptive income. A separate row is provided for in ITR 4S to claim deduction of interest and salary paid by the firms to the partners.
- To provide for an additional deduction of upto Rs. 50,000 for investment in National Pension Scheme. a new row is has been introduced in the ITR Forms ITR 1, 2, 2A, 3, 4 and 4S . U/s.80CCD.
- Separate column has been inserted in Schedule IF of ITR 3, 4 so that partners can to disclose whether such firm is liable to transfer pricing audit under Section 92E.
- New Schedule PTI of ITR Forms 2, 2A, 3, 4, 5, 6, 7 requires following reporting of pass through income of business trust/investment fund.
- Share of income from partnership firm, AOP and BOI (which exempt from tax in hands of recipient) was required to be disclosed under Schedule EI of old ITR 3, 4, 5, 6 . Now there is no need to make disclosure.
- New Schedule ICDS has been inserted in ITR forms (ITR 4, 5, 6) wherein effect of Income Computation and Disclosure Standards(‘ICDS’) for income /expense under “Profits and Gains of Business Profession” as well as “other sources” needs to be disclosed.
- In new ITR forms (ITR 5, 6) there is a separate row for disclosure of following details if taxpayer is liable for audit under any Act [other than the Income Tax Act]:
1) Act and Section under which taxpayer is liable for audit
2) Date of furnishing of Audit Report.
FAQs on Wealth Tax
Q. What is Wealth tax and on whom and when it is applicable?
A. Wealth Tax is applicable on Individual, HUF and a Company if the net wealth of such person exceeds Rs. 30 Lakh. Wealth tax is charged @ 1% on net wealth exceeding Rs. 30 Lakh.
Q. What is the meaning of net wealth?
A. Net wealth means assets minus debt incurred for acquiring such asset.
Q. What is the meaning of asset as per Wealth Tax Act?
A. Asset includes:
— Motor Cars (Other than used by the assessee in the business of running them on hire or used by the assessee as stock in trade)
— Yachts, boats and aircrafts (other than used by the assessee for commercial purposes)
— Jewellery, bullion, furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal. (other than used by the assessee as stock in trade)
— Any building or land (with some exceptions like):
o One residential home is exempt from Wealth Tax or urban land measuring 500 sqm or less.
o Any residential property which has been let out for a minimum period of 300 days in the previous year
o Any house occupied by the assessee for the purpose of any business or profession carried on by him
o Commercial establishments or complexes
— Cash in excess of Rs. 50000 in case of individual or HUF
— Deemed Assets i.e assets transferred without consideration to family members etc.
— Assets of minor child barring some exception
— Value of share of assets in partnership firm to be clubbed with the assets of partner
Q. What is the last date of filing return?
A. Last date to file the return is:
— 31st July for Individuals or HUF
— 30th Sep for Company and individual or HUF whose accounts are required to be audited u/s 44AB
Q. what can happen if I do not pay the tax or file the return?
— Belated or revised return can be filed within one year from the end of assessment year after paying 1% per month of tax as penalty for delay.
— Penalty upto 100% of tax in case of non-payment of wealth tax
— Penalty upto 500% of tax in case of concealment of wealth tax
— In case of willful default, imprisonment upto 7 years can be imposed
Filing of Wealth Tax Return by electronic means made mandatory
Vide Notification No. 32/2014 dated 23-06-2014, the CBDT has made itmandatory to file Wealth Tax Returns by electronic meansfor certain persons including a Company and an assessee being an individual or HUF liable to audit u/s 44AB.
From Assessment Year 2014-2015 onwards, a Company and an assessee being an individual or HUF liable to audit u/s 44AB are required to furnish Form BB (Return of Net Wealth) electronically with digital signature.
A few highlights of this notification are:
- New wealth tax return form BB (E-Filing) shall be applicable from assessment year 2014-15. For Years prior to this, Form BA will continue to remain applicable.
- E filing of wealth tax return is mandatory for all types of persons for assessment year 2014-15 onwards, except for Individuals / HUFs to whom provision of section 44AB (tax audit) is not applicable in assessment year 2014-15.
- Individual / HUF to whom provision of section 44AB (tax audit) is not applicable in assessment year 2014-15 may file wealth tax return in paper form.
- Exemption to Individual / HUF from e-filing of form BB is granted only for AY 2014-15. Hence, till further notice, from next year onwards (i.e. AY 2015-16) all persons are required to e-file their wealth tax return with digital signature only.
- Form BB shall not be accompanied by any document i.e. statement of computation of wealth, valuation report of registered valuer, proof of tax or interest deposit. However, these details have to be given in the return itself. Please see the below section for more details.
Information required for Filing Wealth tax Return – Assessment Year 2014-15
Name : _________________________________________ For Individual./HUF
PAN : _____________________
- FIXED ASSETS (SCHEDULE IP):
- Prepare separate list of Each Asset.
- Description of Assets E.g. Residence, Shop, Show Room, Factory, Land.
- Survey Number of above Assets
- Value as on 31stMarch.
- Details of Loan if taken to purchase above Assets.
- If Any Valuation is done in above case:
- Name of Registered Valuer
- Registered Number of Valuer>
- Date of Report
- (Schedule MP)
Details of Motor Car (Loan due Amount at the end of year, Value as per Insurance policy)
- Details of Cash on Hand if more than Rs. 50,000/-
- (Schedule JE)
Ornaments : [a] Valuer’s Report
[b] Name of Registered Valuer
[c] Registered Number of Valuer
[d] Date of Report
- (Schedule INW):
List of Assets in the case if Minor Son/Daughter.
Bring this List separately as per below mentioned format :
Name of Minor
PAN of Minor
Total Value of Assets
Any Loan on these Assets
(Schedule IFA) :
Partnership Firm / Share in A.O.P if any :
Bring Details of each Firm as per below mentioned Format :
Name of Firm
PAN of Firm
Name of Other Partners
Our Share (%)
Value of Our Share in Assets of Firm
Loan on Assets if any
- (Schedule ACE) :
Details of Assets which are not Taxable as per section (5),
(A) One Residence / Land below 500 Meter (Details as per above Schedule (IP))
Below Mentioned Details are necessary in the case of Individuals / H.U.F.
- Immovable property:
a. Agricultural Land
b. Land Except Agricultural Land
c. Commercial Building
d. Residence Building
Above details as per below mentioned Format :
- Other details:
Details of Amount in Bank Accounts (Saving & Current) and Financial Institutes
Details of Fixed Deposits in Bank
Shares / Debentures / Unit in Mutual Fund
N.S.S., Postal Savings, Insurance Policy, Investment in Insurance Companies
Loan / Advances / Amount Receivable from Companies and Other Receivables
Any other Assets other than above (At Purchase Cost)
Less : Loan Rs.
Loan on above assets
Net Amount of other assets