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Five must-know changes – Tax Reforms

There are five changes in tax reforms that every taxpayer should be aware of before filing their income tax returns.

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The article points out five changes in tax reforms. These changes include explicit declarations for those earning over Rs. 50 lakh, accommodation of new deductions, TCS credit for individual taxpayers, a new schedule for pass-through income and a longer list of available 80G deductions.

A lot of tax experts provided their comments on the topic and Vaibhav Sankla, Managing Director, H&R Block was also one of them.

If your total income exceeds Rs. 50 lakh, then you are required to provide information on the cost of your assets (movable and immovable) in the new schedule introduced in forms ITR 1. According to Vaibhav Sankla, director of tax consulting firm H&R Block, you will have to disclose the cost of your land and building. Other assets such as jewellery, bullion, vehicles, yacht, aircraft, cash in hand, too, needs to be disclosed in the schedule.

The article says that a new row has been introduced in the ITR Forms (ITR 1, 2, 2A, 3, 4 and 4S) for deduction on investment in National Pension System (NPS). This is meant for an additional deduction of up to Rs. 50,000.

A new change has been introduced by the Finance Act 2012, to reduce the practice of cash payments. According to section 206 (1D), the seller of bullion and jewellery has to collect TCS (Tax Collected at Source) at 1 per cent of the sale consideration from the buyer, if the amount is more than Rs. 2 lakh and Rs. 5 lakh in case of bullion and jewellery respectively. Moreover, the amount should have been received in cash.

The article further discusses the other two above mentioned tax reforms.

Source : Outlook India