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SARAL but not short

If small is beautiful, taxpayers can say goodbye to Saral forms. The new income tax return forms are substantially lengthier than various Saral variants used till now.

If small is beautiful, taxpayers can say goodbye to Saral forms. The new income tax return forms are substantially lengthier than various Saral variants used till now. The upside: the income tax department has explained each and every section of the forms in detail, which makes them truly “Do-It-Yourself” for most taxpayers. Also, all forms can be filed online, which means no need to attach Form 16s and TDS certificates.

ITR 1

Who is it for?

The plain vanilla form, is for people with only salary, pension and interest income.

What's new in it?

  • Declaration of high-value financial transactions
  • Form 16 details
  • Details of tax-saving investments
  • Details of tax-free income

ITR 2

Who is it for?

Salaried people and pensioners with other sources of income (dividends, capital gains, rentals, royalty).

What's new in it?

  • All the information required in ITR 1, plus details of:
  • Capital gains, set off and carry forward of losses
  • Property income (property address, rental income and tenant details, though his PAN is optional)
  • Income from other sources (sale of assets, royalty)
  • Income of spouse or child if it’s to be clubbed with yours

ITR 3

Who is it for?

Partners in a partnership firm

What's new in it?

  • All the information required in ITR 1 & 2, plus details of:
  • Share in partnership firm and information about firm (its PAN and financial details)

ITR 4

Who is it for?

Proprietors of business and consultants

What's new in it?

  • All the information required in ITR 1 & 2, plus details of:
  • Income if it is liable to tax audit
  • Balance sheet — profit and loss, creditors, debtors, cash balance

Choose how you want to file

  1.  Submit the return in paper form
  2.  Submit the return electronically under digital signature
  3. If no digital signature, file data online and submit verification in Form ITR-V
  4. Submit a bar-coded paper return

Big may be better

The new tax forms may be complex, but there is a pleasant surprise in the form of comprehensible instructions for taxpayers. These aren’t tax forms — they are tax ready reckoners that tell you everything you wanted to know about tax but didn’t know where to look. Some key features are:

E-FUTURE: The new forms are another baby step towards e-filing of income tax returns. The question is whether the infrastructure is geared to handle so many e-returns.

NO ATTACHEMENTS: There’s no need to attach any annexure — Form 16s and TDS certificates — with the income tax returns. The flip side: you need to fill up these details now.

SIZE DOESN’T MATTER: Don’t feel intimidated by the voluminous 20-page ITR 4. Most of it will not be required to be filled if your profit or income is less than Rs 10 lakh a year or if the business turnover is below Rs 40 lakh.

ALPHABET SOUP: Cutting through officialese, the new forms clearly state which deduction comes under which section of the Income Tax Act. So you know exactly what Sec 80DDB means and what Sec 80GG entails.

HELP IN PREPARING: Confounded by the complex forms? Get a certified tax preparer to fill it up for you for a small fee of about Rs 100-250. A word of caution: unlike a chartered accountant, the tax preparer is not accountable for any penalty levied on you because of a discrepancy in the form he filled for you. The liability is all yours.