Which Income Tax Return (ITR) Form should be used for A.Y.2017-2018?

New and Revised ITR Forms-FY-2016-17, AY2017-2018-RevWhich Income Tax Return (ITR) Form should be used for A.Y.2017-2018?


Last month, Income Tax of India has made some changes into Income Tax Return (ITR) Forms for A.Y. 2017-2018 (Financial year 2016-2017). Some of the forms are made simple now. Since the ITR deadline is 31-Jul, many of you are yet to file income tax returns. Which ITR Forms to be used for last financial year and assessment year 2017-2018? Who need to file income tax Returns in FY2016-2017? This article would help you to clarify these points.

What is Income Tax Return?


If you are already aware, skip this section.

An ITR is the tax form that is used to file income tax with the income tax department. The return is filed in a predefined work sheet format where the income figures are written to calculate the tax liability. The Income Tax Department has released the ITRs for the financial year 2016-17 (Assessment Year 2017-18) with few major changes in the forms. The last date of submission of these ITR forms will be 31st July. You can file income tax returns in just 15 minutes online.

According to the income tax act, 1961 every income earned by an individual, HUF, firm, LLP, company or any other artificial person has to fall amongst these five categories

  • Income from salary
  • Income for household property
  • Income from business and profession
  • Income from capital gains
  • Income from other sources

The income tax department has issued seven types of ITRs as specified all the above five heads in different ITRs. One has to choose the right ITR in which his income is falling.

Who needs to file the income return?


As per the Income Tax Act 1961, every person should file the income tax return if his income exceeds the limit prescribed by the income tax department on their respective due dates. The due dates are 31 July for salaried individuals and non-auditable firms. For companies and auditable firms, it is 30 September. A person has to file IT return if his income exceeds basic exemption limit, the slab rates and the applicable rate of income tax has been tabulated below:

Income tax slabs and Rates: FY 2016-2017 (AY 2017-18)


Income tax slabs and Rates- FY 2016-2017 (AY 2017-18)

What are the major changes in ITR Forms for A.Y.2017-2018?


Here are the major changes in the recent ITR forms revised by Income tax Dept.

  • One page ITR Form for those individuals who has income up to Rs 50 Lakhs
  • ITR-1 can only be filed by those who have one house property. Schedule AL has been taken off from ITR-1.
  • New ITR-2 is formed by merging ITR-2, ITR-2A and ITR-3.
  • New ITR-3 is replaced with Old ITR-4 and New ITR-4 (Sugam) is replaced with Old ITR-4S(Sugam).
  • Aadhaar number or Aadhaar enrollment id is mandatorily to be mentioned.
  • New section added in ITR-1 for mentioning exempt long term capital gains. Mandatory to e-file tax returns for those with LTCG of Rs 2.5L or more, even though their total taxable income may be below Rs 2.5L.
  • Paper returns can only be filed by those who are above 80 years of age OR by an individual or HUF whose income does not exceed five lakh rupees and who has not claimed any refund in the return of income.

Also Read: Which are the best Tax Saving Investment Plans for 2017-2018?

Which Income Tax Return (ITR) Form should be used for A.Y.2017-2018?


The Income Tax Department notified new income tax return forms for filing of returns for the assessment year 2017-18 (Financial year 2016-17), cutting down the number to seven from earlier nine. One more important notification is that all taxpayers will have to now mandatorily link Aadhar with their PAN cards. From 1st July, 2017 if your Aadhar card is not linked with the Pan card, you cannot file your return electronically.

 The various types of IT returns with changes made are mentioned below:

1) ITR -1: It is now a simplified one page form. Individuals having income from salary and only one house property and income from other sources can fill this form. Individuals having income exceeding Rs. 50 lakhs cannot use this form.

2) ITR 2:  ITR 2, ITR 2A and ITR 3 has been merged into a single form of ITR 2. Individuals and HUF (Hindu Undivided Family) who is not having income from business and profession (B&P) can fill this form.

3) ITR 3: The old ITR-4 has been renamed ITR 3. Individuals and HUF being partners in firms and not carrying any business and profession (B&P) under any proprietorship can fill this form.

4) ITR 4: The old ITR-4S has been renamed as ITR 4 for the Individuals and HUF who are having income from B&P.

5) ITR 4S: This form is used for the businesses where income is calculated on ‘presumptive method’.

6) ITR 5:  This form is used by firms, AOP (Association of Persons), and LLP (limited liability partnership).

7) ITR 6: Companies other than claiming exemption under Section- 11 of Income tax act.

8) ITR 7: Persons, including companies required to furnish under Sec- 139(4A), 139(4B), 139(4C), 139(4D).

One important point to note in the ITRs of this year is the new column of cash deposited during the period 9th November, 2016 to 31st December, 2016. It is a onetime feature and would not be there in the ITRs from the next year onwards. All cash payments of over Rs 2 lakhs for paying loans and credit card bills during the 50 day period post demonetization will have to be disclosed in the new one-page Income Tax return forms. You can file income tax returns online at several websites for free which are simplied on their websites.

What happens in case wrong ITR is filed?


The assesse has to choose from these IT forms which are applicable to him/her according to income earned by him. If wrong IT return has been filed by the assesse, then it is treated as defective and return will be deemed as not been filed. Rectification has to be done under Section 139(9). It has to be done with in the 15 days of receiving the notice from the CPC office Bangalore. It is always advisable that the right forms are filled with accurate information to avoid all the inconveniences.

What documents required to file income tax returns?


There is a set of few documents that are required for filing the return:

a)     PAN – Permanent Account Number

b)     Bank Account Details

c)     Last year’s return

d)     TDS Certificates

e)     Financial Statements and Audit Report, if applicable     

f)      Details of investments as per Sec.80C and details of donations as per Sec 80G         

g)     For reporting of salaried income

i. Pay Slips

ii. Form 16

iii. Rent receipts for claiming HRA.

h)     For reporting of house property income

i. Address

ii. Details of Home Loan

iii. Details of rental income if the property is rented.

i)      For reporting of capital gain –

i. Stock Trading Statement in case of CG from Shares.

ii. Sale, purchase, registration and CG details in case of     property.

iii. Details of fund statement for Mutual Funds, equity funds etc.

j)      For reporting of other income

i. Bank account statement for interest income

ii. Income details from Post Office saving account.

iii. Details if there is other source of income.

Also Read: How to file income Tax Returns of Previous Years Online?

Conclusion: Keeping the amendments and new requirements in mind, go ahead, select the appropriate ITR and file your returns on time to avoid penalties and interests levied as per Income Tax Act, 1961. One has to ensure to file income tax returns by 31st July.

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Suresh

Which Income Tax Return (ITR) Form should be used for A.Y.2017-2018?

5 comments

  • Sasmita sahoo

    Hi Suresh,

     

    Could you please advise which ITR form should be used if a person has an active account overseas? I tried to search for it but its confusing as the ITRs have been changed (again). 🙁

    Thanks,

    Sasmita

  • Ravi Chandran

    Hi Suresh,

    thanks for the post, Since i am a newbie to the whole term income tax, I need to understand all the things about IT and ITR, , till last yyear I was not paying tax as my icome did'nt fall under even the minm slab, But this year I am falling in the range of paying 10% of my income as tax, since I am into 3to 5 lakh category, how should I do it?

  • Krupal Amin

    Nice Article Mr. Suresh,

    I am an NRI having Interest income, Short / Long Term Capital Gain and some Interest Income on NRE Accounts.

    Which Form shoul I use?

    Regards,

    Krupal Amin

  • narayanan

    Please explain in detail the procedure for self assessment tax and it's payment including name of banks.My income tax slab is 20% but banks have deducted 10% only. Should I pay the balance tax before filing the return?

     

  • Raju Penumatsa

    Hi Suresh, thanks for the simplified article.I have a question regarding HRA. In case if I miss to submit HRA documents to employer during the financial year , am I still allowed to claim my money during tax filing ? If so, could you please tell me which form I need to fill and any details or documents should I provide..Etc.

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