New Delhi: All cash payments of more than Rs2 lakh for payment of loans and credit card bills during the 50-day period following demonetization will need to be disclosed in the new Income Tax Return (ITR) form of a page. A few days ago, the tax department notified new income tax return forms (ITRs) for filing returns for the 2017-18 tax year (fiscal year 2016-17).
In addition to providing for the declaration of income, exemption claimed and tax paid, the forms have a new column providing for the declaration of any deposit of more than Rs2 lakh in bank accounts made between November 9 and December 30, 2016 after the demonetization of the old notes of Rs500 and Rs1,000. . This column should also be used to report cash payments above Rs2 lakh for repayment of any loan or settlement of credit card bills during this 50-day period, a senior official said.
“The column is an attempt to match cash deposits made after demonetization with annual income,” he said. While all credit cards are linked to the permanent account number (PAN) of the holder, almost all loans from regular banks are also granted on The tax service will collect the data it has on cash payments made beyond of Rs2 lakh with filed returns. “We want to see if the income profile matches the cash payments made,” he said.
The move comes amid concerns over unaccounted or black money being used to pay bills after credit cards have been used to make large purchases. It could also be that the black money could have been used to repay loans. After the demonetization, the government had provided a 50-day window from November 9, 2016 to deposit abandoned banknotes into bank accounts. For those with unaccounted-for money, it gave them one last chance to clean up by depositing 50% of it as tax and securing another 25% in an interest-free deposit for four years.
The changes to the ITR are an attempt to catch tax evaders, the official said. Revenue Secretary Hasmukh Adhia had told PTI last week that the new column of cash deposits made on November 9, 2016 and December 30, 2016 was a unique feature in the ITR and would no longer be there in the ITR from next year.
The ITR, he said, would evolve or change every year as needed. By issuing new ITRs, the CBDT had also streamlined them and reduced the number of forms to seven from nine previously. While all taxpayers will now have to compulsorily link Aadhaar to their PAN cards, the ITR1 (Sahaj) form has been shortened from 7 pages to 1 page to allow filing of returns by those with incomes of up to Rs50 lakh of here on July 31.
The ITR2 must be filed by individuals and HUFs with no business or professional income and the ITR3 is filed by individuals and HUFs with business or professional income. ITR 2 and ITR 3 also have an Annex AL which requires assessments to report their assets and liabilities at year end. ITR4 (Sugam) is filed by persons who have opted for the calculation of income under presumed business and professional income.
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