With the new tax slabs applicable for income earned during Financial Year 2014-15 and host of new changes in income tax returns and filing norms, this e-filing season will certainly bring in a new experience for taxpayers.
Here are the eight changes which will make you feel different from the previous tax filing seasons.
1. New Income Tax Slabs for Financial Year 2015-16 :
The first and foremost thing a taxpayer must keep in mind while calculating taxes is that this year new income tax slabs are applicable for income earned during financial year 2014-15.
The slabs are mentioned below for the taxpayers whose age is less than 60 years.
a. Nil, on taxable income up to Rs 250,000*
b. If the taxable income is more than Rs 250,000* but is less than Rs 500,000 then 10 per cent of amount by which the taxable income exceeds Rs 250,000* less (in case of resident individuals only) Tax credit u/s 87A i.e. 10 per cent of taxable income up to maximum of Rs 2000
c. If the taxable income is more than Rs 500,000 but is less than Rs 10,00,000 then Rs 25,000 plus 20 per cent of amount by which the taxable income exceeds Rs 500,000
d. If the taxable income exceeds Rs 10,00,000 then Rs 125,000 plus 30 per cent of amount by which the taxable income exceeds Rs 10,00,000
Note: The figure of Rs 250,000 marked as * in superscript will be substituted with Rs 300,000 if the age of taxpayer is 60 years or more and with Rs 500,000 if the age of taxpayer is 80 years or more.
2. Last date of ITR filing extended to August 31, 2015
In order to give taxpayers ample time to understand new ITR norms for financial year 2014-15, the income tax department has extended the last date of filing income tax return (ITR) to August 31, 2015. Please note that, the income tax department has rolled out new ITR norms for financial year 2014-15 in the third week of June and owing to such delays the due date of income tax return filing has been extended from July 31, 2015 to August 31, 2015.
3. ITR- 1 is now applicable even if exempt income is more than Rs 5000:
Taxpayers with exempt income of more than Rs 5000 had to use ITR 2 or ITR 4 from the past two years. This sparked a debate among taxpayers about whether they need to file ITR 2 if their exempt HRA allowance is more than Rs 5000 something which is very common with salaried individuals. However, this year the income tax department has relaxed the norms and has allowed people with any amount of exempt income to use ITR 1 or ITR 4S.
4. Launching of new form ITR-2A
The income tax department has launched a three-page ITR form known as ITR-2A. The ITR-2A form is for individual taxpayers and HUFs who do not require filing ITR 1 but were filing complicated and bulky ITR 2 where the information regarding capital gains and foreign assets not applicable on the taxpayers was required to be reported.Thus with a view of removing the cumbersome process of filling ITR 2, individual taxpayers or HUF can now use ITR 2A if they earn income from any source except from capital gain or business income.
5. Multiple Bank A/C, Aadhar no. and Passport no. required in Income Tax Return
As per the new ITR forms , taxpayers are required to furnish the details of all bank accounts such as bank’s name, IFSC code, account no., etc. All types of bank accounts are required to be disclosed whether saving or current account. However, the dormant accounts which are not operational from the past three years are not required to be reported. With this move, government will now easily be able to keep a close watch on all the financial transactions of the taxpayers.
The taxpayers are also required to enter their Aadhar no. and Passport no. in the ITR. Aadhar no. is required for electronic verification of the return e-filed. However, it is optional to mention passport no. With these measures in place, government will keep an eye on all the foreign travelling expenses of taxpayers and the source of income for funding these expenses.
6. Compulsory e-filing to claim tax refund
With the aim of speeding up the refund issuance, the government has now made it compulsory for taxpayers to e- file their ITR to claim tax refund. Also, with effect from financial year ended on March 31, 2015, all refunds will be issued electronically only and no cheques for refunds will be issued.
7. Sending of ITR-V is now not mandatory if ITR is verified with EVC
Earlier when taxpayers efiled their ITR without digital signature, they were required to send ITR V to CPC (Central Processing Centre), Bangalore in order to verify their e-filed returns. Now, the same can be avoided as income tax department has launched a new method to verify e-filing called Electronic Verification Code. The electronic verification works with Aadhar card no. of taxpayer which s/he needs to enter in ITR.
The taxpayer receives a onetime password (OTP) on the mobile number associated with his Aadhar number. He then needs to enter the same password at the official website of income tax department to authenticate his Aadhar no. and verify his e-filing.
If the ITR is verified then s/he is not required to send ITR V to CPC, Bangalore. In case, he is not able to verify or does not have an Aadhar card then s/he will have to send the ITR V to CPC, Bangalore.
8. Super senior citizens still have option to file ITR manually
As per the new ITR norms, super senior citizens (individuals with 80 years or more) still have the option to file their ITR manually or in physical form if their total income is more than Rs 5 lakh or if they are claiming any income tax refund. This relaxation is applicable only if they are filing ITR 1 or ITR 2 or ITR 2A.
Earlier in the series:
mytaxcafe.com helps people e-file their income tax returns