I ‘am Rishi and Iam working as a Blogger and specialised in compiling blog posts on the topics relating to financial products. This article is about the recent change occur in income tax returns.
Filing I-T Returns is probably one of the most important responsibilities that is bestowed upon every earning individual. In addition to the fact that it helps the government understand the expenditure and earnings that individuals receive, it is also quite taxing (no pun intended). In order to ensure that the tax net is widened and more individuals file their returns, the government will introduce a single page I-T or income tax return form from the 1st of April. This will be applicable for all individuals whose salaried income per year is Rs.50 lakh and below, which is much higher than the Rs.5 lakh limit that has been proposed in the Union Budget. This is also only applicable for those who are salaried and have one house rent income.
As of now, there are 290 million PAN card holders but only around 60 million individuals file I-T return. Presently, the form for I-T Return is three pages long and is a simplified version from two years ago. This is because a provision for compulsory disclosure of dormant bank accounts and foreign trips was removed due to their controversial nature. 5.6 million from the 7.6 million individuals who declare annual income that is above Rs.5 lakh fall into the salaried class category. For those individuals who have an annual income of above Rs.50 lakh and below Rs.1 crore (including Rs.1 crore), will have to pay a surcharge of 10%. For those individuals who earn over Rs.1 crore, 15% surcharge will be imposed. This surcharge itself would generate an additional revenue of around Rs.2,500 crore.
It has been observed that many individuals do not file their returns as it is quite complicated and time consuming and their I-T returns are deducted via TDS or Tax Deduction at Source which is 37% of the gross direct collection of tax. The contribution noted in the year 2015-16 was higher by 11.6% as compared to the previous financial year. Payers of may also have tax liability due to income from other sources which they wish to avoid paying.