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direct tax

Key Updates In Direct Taxes

The Central Board of Direct Taxes (CBDT) has amended the Income-tax rules and has notified new Income Tax Return (ITR)forms applicable for the Assessment Year (AY) 2018-19.
A simplified one page ITR-1 (Sahaj) has been notified for AY 2018-19 as well. However, ITR can now be used by only Resident and Ordinarily Resident (ROR) Individuals having Income from Salary, one House Property (except loss carryforward cases), Income from Other Sources (except winnings from lottery, horse races, dividend income exceeding INR 1 Million etc.) if taxable income does not exceed INR 5 Million. As per the newly notified ITR forms, Individuals and Hindu Undivided Family (HUF) having income under any head (other than business or profession) shall be eligible to use ITR-2. Individuals and HUFs having income under the head Business or Profession will now have to file their ITR using ITR-3 or ITR-4 (presumptive business income). Individuals and HUFs having Income from Partnership Firms will no longer be eligible to use ITR-2 to file their ITR. The option of filing ITR in a paper form (only ITR-1 & ITR-4) remains same i.e. it is allowed for super senior citizens (i.e. individual of 80 years of age or more during the financial year) or the individual/ HUF whose income does not exceed INR 0.5 Million and there is no claim of refund.

The scope of newly notified ITR forms applicable for the AY 2018-19 is tabulated below for ready reference:

For Individuals and HUF :

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For other than Individuals :

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APPLICABILITY OF ITR FORM FOR AY 2018-19 – TRANSACTIONAL ANALYSIS

 

NATURE OF INCOME

ITR 1

(only for ROR)  

 

ITR 2

 

ITR-3

 

ITR-4

Income from salary/pension (for ordinarily resident person)
Income from salary/pension (for RNOR & NR person)
Income or loss from one house property (excluding brought forward & carried forward losses)
Income or loss from more than one house property
Agricultural income exceeding Rs. 5,000
Total income exceeding Rs. 50 lakhs
Income from other sources (other than winnings from lottery and race horses or losses under this head)
Income from other sources (including winnings from lottery and race horses or losses under this head)
Capital gains/loss on sale of Capital assets
Interest, salary, share of profit, etc. received by a partner from a partnership firm
Income from business or profession (Non Speculative)
Income from presumptive business
Income from Speculative Business and other special incomes
Income from an agency business or income in the nature of commission or brokerage
Income from foreign sources/assets/any account outside India
Claim of relief of tax under sections 90, 90A or 91
Dividend income exceeding Rs. 10 lakhs taxable under Section 115BBDA
Voluntary offer of income under Sections 68, 69, 69A, etc. [taxable at 60% u/s 115BBE)
Income to be apportioned under Section 5A (Relating to clubbing of Income for Portuguese Citizens)  

 

 

Adjustments of Brought Forward Losses of earlier years

 

Penalty for late filing of Income Tax Return

A separate row under ‘computation of tax liability’ tab has been inserted in all ITR forms requiring furnishing of
information pertaining to fee for default in furnishing return of income u/s 234F, leviable in respect of ITRs filed for
AY2018-19 and thereafter.

Late Fee levied in case of non-compliance of Section 139(1) of the Income Tax Act, 1961:

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Form 67 enabled on Income tax e-filing for claiming Foreign Tax Credit Relief

A Resident taxpayer (Individual, Companies, Partnership firms, etc.) who have already paid tax in another country
on amounts of foreign income and gains, may claim Foreign Tax Credit Relief in India to avoid being taxed twice on the same income.

Foreign Tax Credit Relief is not always available or may not be available on the full amount of foreign tax paid. Such relief is subject to the provisions of the Income-tax Act, 1961 read with Rule 128 of the Income-tax Rules, 1962 and the provisions of the relevant Tax Treaty, if any. The amount of Foreign Tax Credit Relief shall not exceed the Indian tax on the same item of income or gains.

For the purpose of claiming Foreign Tax Credit Relief, Form No. 67 was notified on 27 June 2016. This Form is required to be furnished on or before the due date specified for furnishing the return of income by the taxpayer. The taxpayer will be required to attach supporting documents such as certificate specifying the nature of foreign income and the amount of foreign tax deducted therefrom or paid by the taxpayer.

Recently, the CBDT vide its notification no. 9/2017, dated 19 September 2017 has prescribed the procedure for
filing Form No. 67:

For the Procedure for filing Form No. 67 please download our full guide.

Download the Full Guide

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