New Income tax forms Released and their usage

Starting from this post we will be explaining in a series of posts the various precautions required before filing of returns under Income tax from the year 2018-19 as also the precautions required failing which one may land into trouble with income tax department .

Since from this year viz Asst Year 2018-19 Income tax return filing has gone a sea change which means the assessee has to be very careful while filing the returns.Though the system has started screening from last year but many inbuilt checks will be active from this year.We will try to explain the usage of forms , their intricacies and the possible screens or better known as inbuilt checks that the department will be implementing in processing of the returns.

So first thing first as on date only 4 forms have been released (please see correction below) which are meant for Individuals having salary Income and PGBP income which do not require Audit as the last date for filing the return is 31st July 2018 and further that from this year a penalty is proposed in delay in filing of returns

Correction: Two more forms have been released today viz 21/05/2018

Form NameTo be used byHeads of IncomeLimitationsInbuilt checks
ITR 1IndividualsSalary,Income from House Property and Income from other sourcesIncome Should be less than or equal to 50.00 lacs and only one house property should be earning incomeMore Salary details now asked
ITR 2Individuals and HUFAny head Except PGBPThere should be no Income from BusinessPlease see the details explained below
ITR 3Individuals and HUF having PGBPAny HeadNon Audited casePlease see the details explained below
ITR 4Assessee having Presumptive IncomePresumptive IncomeNon Audited casePlease see the details explained below
ITR 5Assessee other than Individual,HUF,Company and person filing ITR 7Any HeadAudited or Non Audited wherever applicableExplained in our post
ITR 7For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)Any HeadAudited GenerallyExplained in our post

Now regarding inbuilt checks the returns are being screened for following discrepancies:

(Please note that the checks explained below are given on the basis of inputs recieved from various assessees and on the basis of experience gained in field by the writer and in no way these should be considered as provided by the department)

1)The salary and other income reported in 26AS at the time of processing rather than at the time of filing of returns is checked and if any discrepancy found the return is treated as defective.

Now this is a real tricky situation as suppose your bank reports a certain amount of interest on FDR which you declare on the face value as reported by bank and file the return.Suppose bank later on say after 15 days revises its TDS returns which thereby revises your interest income .In that case you will be getting defective return notice based upon the mistake done by the bank on which you have no control.Same goes true with your employer as well if he later on rectifies the income .

Of course there are penal sections that penalise the deductor for reporting wrong income of the deductee but still the deductee being the assessee is at the recieving end as in many cases the refunds are struck due to these notices in earlier year and the same practice is going to be followed this year.

2) Suppose you have declared a bank account which is in joint name of your spouse and there is a refund in the return .Now the system checks that the name do not matches (in those cases where your spouse is first name) then your refund is bound to be delayed as then the department will ask for a reverification

3) In those cases where there is adjustment of any income from other heads the system checks for any variation from the income deducted from any head from that added in another head .If there is any difference say due to rounding off (which is bound to happen in many cases) then the system will flag the return as defective

4) In those cases where there was a notice for any reason and the reply is kept unfiled the return will be kept unproccessed till the time that notice is kept pending

5) The salary details should match with that shown in 26AS inclusive of allowances

As and when new forms are released we will keep you posted and will also explain the checks required before filing the returns .


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