INCOME TAX RETURN AND NEW RETURN FORMS

S.K. Gulati, Advocate
President Income Tax Bar Association

Furnishing of income-tax return has always been considered as most cumbersome job by the tax payee. With the object to make it easy for all the assessees to file their income-tax return themselves, the Government has introduced various types of new return Forms i.e. ITR-1 to ITR-8 for the assessees who have different sources of income.

For the assessment year 2007-08, the individual assesses having income from salary, pension and interest should file their return in Form ITR-1, while individuals and HUFs having income from other sources apart from salary, pension and interest but no income from business or profession should file their return in Form ITR-2. In case individual and HUFs are having income from proprietary business or profession also, the return should be filed in Form ITR-4.

Any person having gross total income (i.e. before allowing deductions under Chapter VI-A) exceeding the maximum limit of income, which is not subject to income-tax, is under obligation to file return of income within the prescribed time limit. For every individual/HUF/AOP/BOI/ Artificial judicial person below the age of 65 years, except woman, having gross total income more than one lac rupees, and every woman below the age of 65 years having gross total income of more than Rs. 1,35,000 and for individual senior citizen who is more than 65 years of age having gross total income of more than Rs. 1,85,000, it is obligatory to file income-tax return before 31st of July, 2007 for the assessment year 2007-08 subject to the other applicable provisions of Income-tax Act.

It might be easy for the individual and HUF assessees, having no income of business and profession to file their return themselves in the newly introduced Forms ITR 1 & 2. But the assessees having income from business and profession may require guidance and help from the tax professionals and Tax Return Prepare (TRP) before filing the relevant Form of Income-tax return.

Under section 44-AA it is obligatory for every person carrying on legal, medical, engineering, architectural or any other profession, as notified, and persons carrying on other business or profession and where income exceeds Rs. 1,20,000 or the total sales in business and gross receipt in profession exceeds Rs. 10,00,000 to maintain such books of accounts which enable the authorities to compute the total income according to the provisions of Act.

As now no document is required to be attached with the Income-tax return therefore, it is mandatory to give the required information in the Income-tax return Form itself in the manner prescribed. All the individual/HUF/AOP/BOI, etc. having income from sole proprietary business and profession are required to fill the information of all income and expenses in the columns of profit & loss account prescribed in the return Form.

Return Forms have been divided into two parts i.e. parts and schedules, various details are to be filled in these parts and schedules for which it is advised to go through the instructions given for filling the Forms. In schedule AIR the information of transactions entered during the financial year 2006-07 are required to be given. These transactions are reported through AIR to the tax authorities under section 285-BA of the Income-tax Act.

Every return is required to be verified and signed properly. Giving false statement in the return and schedules may attract prosecution under section 277 of the Income-tax Act and conviction which is punishable with fine and rigorous imprisonment.