Top 16 Changes in ITR Form AY 2016-17 (FY 2015-16 )

By | April 3, 2016

Changes in ITR Form AY 2016-17

Changes in ITR Form AY 2016-17

1. Changes in ITR Form AY 2016-17 if Earning Above Rs 50 Lakh :  Declaration of value of assets and liabilities by Individuals/HUF 

New Schedule has been introduces in  ITR 1, 2, 2A, 3, 4, 4S  requiring individuals/HUFs to declare the value of assets and liabilities if their total income exceeds Rs. 50 lakhs.

Assets include immovable assets and movable assets.

Immovable assets :  Disclose cost of land and building.

Movable assets : cost of following assets needs to be disclosed

  • Jewellery,
  • bullion,
  • vehicles,
  • Yachts,
  • boats,
  • aircraft
  • cash in hand

Taxpayers also need to disclose all liabilities in relation to such assets.

2. Changes in ITR Form AY 2016-17 : Claim of TCS credit for individual taxpayers

New ITR Forms  1, 2, 2A provide an option to claim TCS by the individual taxpayers in case of Deduction of tax u/s 206 (1d) by the seller.

Section 206(1D) provides that the seller of bullion and Jewellery shall collect TCS at 1% of sale consideration from buyer if such sale consideration is received in cash and it exceeds:

   i) Rs. 2 lakh, in case Bullion; and

  ii) Rs. 5 lakh, in case of Jewellery.

3. Changes in ITR Form AY 2016-17 :Firms can file ITR-4S for presumptive income

Now firms can file ITR 4 in case of presumptive income. A separate row is provided for in ITR 4S to claim deduction of interest and salary paid by the firms to the partners.

4. Changes in ITR Form AY 2016-17 😀eduction for contribution to NPS under Section 80CCD

To provide for an additional deduction of upto Rs. 50,000 for investment in National Pension Scheme. a new row is has been introduced in the ITR Forms ITR 1, 2, 2A, 3, 4 and 4S .

5. Changes in ITR Form AY 2016-17 :Disclosure of details regarding partnership firm by a partner

Separate column has been inserted in Schedule IF of ITR 3, 4  so that partners can to disclose whether such firm is liable to transfer pricing audit under Section 92E .

6. Changes in ITR Form AY 2016-17 :  Details of pass through income of business trust or investment fund

New Schedule PTI  of  ITR Forms 2, 2A, 3, 4, 5, 6, 7 requires following reporting of pass through income of business trust/investment fund.

  ■  Name of business trust/investment fund

  ■  PAN

  ■  Head of income

  ■  Amount of income

  ■  TDS on such amount, if any.

Note :Section 115UA and Section 115UB,pass through status is provided in respect of income [other than income from business or profession] of business trust/investment fund. Income distributed by the business trust/investment fund is to be taxed in the hands of the unit holders.

7. Changes in ITR Form AY 2016-17 :No need to disclosed Share of income from firm/AOP/BOI

Share of income from partnership firm, AOP and BOI (which exempt from tax in hands of recipient) was required to be disclosed under Schedule EI of old ITR 3, 4, 5, 6 . Now there is no need to make disclosure

8. Changes in ITR Form AY 2016-17 : Deduction of additional investment allowance

A separate rowhas been inserted in new ITR forms 4, 5, 6 to claim deduction under Section 32AD. A separate row is provided to offer the deemed income to tax under Section 32AD.

Note : Section 32AD was inserted by the Finance Act, 2015 to provide for an additional investment allowance to an undertaking set-up in the notified backward areas in the States of Andhra Pradesh or Telangana.Suitable safeguards have been provided in the provision for restricting the transfer of the plant or machinery for a period of 5 years. On transfer of such asset within five years, the amount of deduction already allowed shall be deemed as income from business or profession (i.e., deemed income under Section 32AD) in the year of transfer.

9. Changes in ITR Form AY 2016-17 :Disclosure of Effect of Income Computation and Disclosure Standards

New ‘chedule ICDS  has been inserted in ITR forms (ITR 4, 5, 6)  wherein effect of Income Computation and Disclosure Standards(‘ICDS’) on profit needs to be disclosed.

10 .Changes in ITR Form AY 2016-17 : Disclosure of Percentage of commercial receipts by a trust

Advancement of any other object of charitable purpose shall not be deemed as charitable if receipts from any commercial activity exceed 20% of total receipts. Accordingly, a new row is inserted in ITR 7 to disclose percentage of commercial receipts vis-à-vis total receipts in order to ensure that such condition (as provided i Section 2 (15)) is not violated.

Note :

The Finance Act, 2015 has substituted the proviso to Section 2(15) to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, unless:

   i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and

  ii) the aggregate receipts from such activity or activities during the previous year, do not exceed 20% of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year.

11. Changes in ITR Form AY 2016-17 :Application of income by a trust

A separate row is provided in new ITR 7 requiring trust to confirm if it has filed Form 9A (in case application of Income of trust fall short of 85% )and the date of filing of such form.

Note

Income of charitable or religious trust is exempt if 85% of its income is applied for charitable or religious purposes in India. If income applied for charitable or religious purposes during the previous year falls short of 85% because such income has not been received during the year or due to any other reason, an option is given to assessee to apply such income in future years in prescribed manner. Assessee has to choose such an option by filing Form 9A to the Assessing Officer before due date of filing return of income under Section 139(1).

12. Changes in ITR Form AY 2016-17 :Details to be given by Universities, hospitals, educational institutions

Now universities, hospitals, educational institutions, etc., have to disclose their name , receipts  and amount eligible for exemption in ITR 7.

Note 

Exemption under sub-clause (iiiab) and (iiiac) of Section 10(23C) is available to universities or educational institutions, hospitals or other institutions which are wholly or substantially financed by the Government, subject to certain prescribed conditions.The Finance Act, 2015 has amended the provisions of Section 139 to provide that such entities covered under clauses (iiiab) and (iiiac) of Section 10(23C) shall be mandatorily required to file their returns of income.

13. Changes in ITR Form AY 2016-17 :Disclosure of MAT 

The Finance Act, 2015 had excluded following incomes for computing MAT liability:

   i) Share of a member in the income of the AOP/BOI, on which no income-tax was payable.

  ii) Passive income (like capital gains, interest, royalty, FTS) accruing or arising to foreign company if income-tax payable thereon was less than 18.5%.

 iii) Amount representing

    – Notional gain on transfer of a capital asset, being share of SPV to a business trust in exchange of units allotted by that trust referred to in clause (xvii) of Section 47; or

    – Notional gain resulting from change in carrying amount of said units; or

    – Gain on transfer of units referred to in clause (xvii) of section 47.

 iv) Loss on transfer of units referred to in Section 47(xvii) (subject to conditions)

Consequently, the Finance Act, 2015 had provided for addition of related expenditure on aforesaid income while computing MAT liability.

Therefore Separate row have been inserted in ITR forms (ITR-6, 7)  to incorporate such changes.

14.  Changes in ITR Form AY 2016-17 ;Disclosure of Audit information

In new ITR forms (ITR 5, 6) there is a separate row for disclosure of following details if taxpayer is liable for audit under any Act [other than the Income Tax Act]:

  1) Act and Section under which taxpayer is liable for audit

  2) Date of furnishing of Audit Report.

15. Changes in ITR Form AY 2016-17 ;Deduction of sum paid for purchase of sugarcane

ITR-5 has inserted a separate row for disclosure of sum which is disallowable under Section 36(1)(xvii).

Note

The Finance Act, 2015 had inserted Section 36(1)(xvii) to provide that co-operative society, engaged in the business of manufacturing of sugar,couldclaim deduction of expenditure on purchase of sugarcane tothe extent of price approved or fixed by the Government. Expenditure in excess of such fixed price was tobe disallowed.

16. Changes in ITR Form AY 2016-17 :Deduction under section 80JJAA

New ITR-4 and ITR-5 forms now contain a separate row for taxpayers (other than corporate taxpayers)to claim benefit of such deduction under Section 80JJAA.

Note

Section 80JJAA, inter alia, provided for deduction to an Indian company, deriving profits from manufacture of goods in a factory. The quantum of deduction allowed was equal to 30% of additional wages paid to the new regular workmen employed by the assessee in such factory, in the previous year, for three assessment years including the assessment year relevant to the previous year in which such employment was provided.

This section was amended by Finance Act, 2015 so as to extend the benefit of such provision to all assessees having manufacturing units rather than restricting it to corporate assessees only.

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