Individuals have to disclose cash payments over Rs 2 lakh made for loans, card payments in new ITR form

Highlights:

1. The new ITR form has a new column for providing declaration for any deposit of over Rs 2 lakh in bank accounts made during 50-day demonetisation period

2.  The column can also be used for declaring cash payments in excess of Rs 2 lakh for repayment of any loan or settlement of credit card bills during the period

3. According to tax official, the new move is an attempt to match the cash deposits made post demonetisation with the annual income

For filing a new Income Tax Return (ITR) forms, individuals have to disclose all cash payments of over Rs 2 lakh made for paying loans and credit card bills during the 50-day period post demonetisation, PTI reported. 

The Income Tax Department few days back had notified a new Income Tax Return (ITR) form for filing of returns for the assessment year 2017-18 (for financial year 2016-17). 

In a surprise move to curb black money, terrorism and corruption, prime minister Narendra Modi had announced to scrap old currency notes of Rs 500 and Rs 1,000 on November 8 last year which had resulted in massive cash crunch across India. 

In addition to declaring income, exemption claimed and tax paid, the new Income Tax Return (ITR) forms have a new column for providing declaration for any deposit of over Rs 2 lakh in bank accounts made during November 9 and December 30, 2016 after the old Rs 500 and Rs 1,000 notes were demonetised. 

This column is also to be used for declaring cash payments in excess of Rs 2 lakh for repayment of any loan or settlement of credit card bills during this 50-day period, cited the news report quoting a senior official as saying.

The column is an attempt to match the cash deposits made post demonetisation with the annual income," he said. 

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According to the report, the tax department will collate the data it has of cash payments made in excess of Rs 2 lakh with the returns filed. "We want to see if the income profile matches with the cash payments made," cited the official.

The government's latest move comes in the midst of concerns of unaccounted cash or black money being used to settle bills after credit cards were used to make heavy purchases. It could also be that black money could have been used to repay loans.

After demonetisation, the government had provided a 50-day window from November 9 last year to deposit the junked notes in bank accounts. For those with unaccounted cash, it gave them one last opportunity to come clean by depositing 50% of it as tax and parking another 25% in a zero- interest bearing deposit for four years.

The report further quoting the official said the changes made in ITR are an attempt to catch tax evaders.

The new column of cash deposits made during November 9, 2016 and December 30, 2016 was a one-time feature in the ITR and would not be there in the ITR from next year onwards, revenue secretary Hasmukh Adhia told PTI last week.

According to Adhia, the ITR would evolve or change every year depending on the need.

While coming out with new ITRs, the CBDT had also rationalised them and cut down the number of forms to seven from earlier nine.

While all taxpayers will have to now mandatorily link Aadhaar with their PAN cards, ITR1 (Sahaj) form has been shortened from seven page to one page to enable filing of returns by people with income up to Rs 50 lakh by July 31.

ITR 2 is to be filed by individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession while ITR3 is filed by individuals and HUFs having income from a proprietary business or profession. 

ITR 2 and ITR 3 also have a Schedule AL which require assessees to declare their assets and liabilities at the end of the fiscal. 

ITR 4 (Sugam) is filed by those individuals who have opted for income calculation under presumptive income from business and profession. 

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