New Income Tax Filing Rules in India – For Salaried Individuals

The article referred above is pretty elaborate article form the perspective of helping us in deciding our way forward for filing the Tax returns.  The major change this year is directive from CBDT to all the Tax Payers in India with Income more than INR 500,000 to file Income Tax online.  As already covered in the article on Economic Times, there are many online portals that charge anything between INR 200 to INR 4000 to do so.  However, from the perspective I look at it, it would be better to take help from a CA to prepare your Tax Return and then File it through an online portal.  I for that matter do the same and my favorite site to file my returns is Income Tax India’s online Portal.  Once I get the acknowledgement (ITR-V), I then send the same by Speed Post to CPC Banglore. Year on year, I had been doing the same and never faced issues.  It has been an awesome experience with my CA preparing my returns for me and then I myself keying in the information to the Portal using the ITR-II.  Simple & easy, though ITR-II is more comprehensive, but saves a lot time from scrutiny as you provide as much information as you need  to.

This leads to the second change, why ITR-II and Why not ITR-I or Sahaj / Saral?  The reason being, the complexity of income earned – from salaries, from dividends, from house rent, agriculture etc. (ok, not that I have so many sources, mentioned them to align the thoughts that Income from Multiple sources would tend to require ITR-II). Though the overall amount may be negligible and may not impact Income Tax majorly, but then using ITR-II one can declare the same in bit more elaborate manner than what they would do in case of Sahaj or Saral .  Specifically this year when there is a rider from CBDT that anyone who has already availed the exempt of more INR 5000 or more on Income Tax, they would need to file returns using ITR-II. The referred article also provides for this information, but leaves that out with highlighting the ambiguity there.

The topic of exempt as mentioned is quite an ambiguous one as the industry experts themselves are deliberating whether the exemption of HRA, LTA, Conveyance Allowance etc would be counted as contributing to the exempt of INR 5000. But as I read the new directive, I would opine that the exempt here is with reference to the exemption received on heads other than the ones available to the Salaried individuals.  LTA and Conveyance Allowances are specifically availed by the Salaried Individual and hence they are the ones would be in a dilemma “Why use ITR-II”.  Income from Business and Partnerships etc anyways require one to use ITR-III.  So the answer lies in the List of Exemptions as available on the website of the Income Tax department or you can download it by clicking here. That should help resolve the ambiguity and the confusion as left out for in the article.

NOTE*** – It would still be better to refer your trusted CA, as I am not a qualified CA, but am just sharing my experience and my own study. Please treat this as a reference that you may use as starting point and not as the final authoritative information.  Please once again, “DO NOT treat this as an Authoritative Information”