It’s that time of the year, when the entire country starts talking about filing income tax returns. The deadline for filing returns is 31 July and there’s a good possibility, you haven’t filed your returns yet.

But before you begin, it's important to know the changes the Income Tax Department made in the IT returns filing forms and even which form you need to use.

Which form to use:

If you are a salaried individual you can use ITR-1 (Sahaj) or ITR-2 from, based on your individual situation.

Sahaj or ITR-1 form is for you, if you earn income from salary or pension, own not more than one house, and have other source of income. Keep in mind, if you have any assets ((including financial interest in any entity) located outside India or are a signing authority in any account located outside India, you cannot use this form.

ITR-2 form is for you or a Hindu Undivided Family if you earn income from salary or pension, or income from house property, or income from capital gains or income from other sources. You can also use this form, in case the income of another person, like your spouse, minor child is to be clubbed with your income. Keep in mind, if your total income includes income from business or profession, you cannot use this form.

Now for the changes:

There are a number of changes which were brought in the ITR forms. Here's what they are

1) Space added for relief under Section 87 A. This is a new section under which, you get a rebate of Rs 2,000, if you are a resident individual and your total income less deduction (under Section 80) is equal to or less than Rs 5 lakh.

2)  Space added under deduction of Section 80 EE. If you took a home loan of up to Rs 25 lakh for a house with a value of Rs 40 lakh or less, in FY 2013-14, you will get an additional tax benefit of Rs 1 lakh on the interest amount paid, under Section 80 EE.

3) Going forward all your refunds are to be received via ECS. There’s won’t be any refunds via cheques. So, in the new forms, you are not give a choice between ECS or cheque.

4) Space added in the form for 10 percent surcharge on Income Tax. This surcharge is for income over Rs 1 crore.

5) Details of Allowances or Exempt Income under Section 10 of the IT Act under the head Income from Salary. Here you need to mention the different kind of allowances you get, for instance Leave Travel Allowance.

6) Going forward you have to give details of bifurcation between immovable property, equities shares, mutual funds, bonds and sale of other assets for both long term as well as short term capital gains.

7) The new forms are very detail oriented, which means you will need to provide details if you want to claim exemption under Section 54, as well as Section 115 F of the Income Tax Act. In short you have to submit details about the Capital Gain exemption claims that you may want to make. In last year’s form, you did not have to provide these details. Here you will have to provide details of cost of new house purchased,  date of purchase or amount deposited in capital gains savings account scheme.

8) In the new ITR forms you will have to provide bifurcated details of set off of current year’s Capital assets with current years Capital Gains - which is short term taxable at 15 percent - 30 percent and long term taxable between 10 percent -20 percent. You will also need to provide bifurcated details of income after set off brought forward losses of earlier year. Such bifurcation wasn’t a part of prior ITR forms.

9) The new form expects you to provide details of unclaimed Tax Deducted at Source or Tax Collected at Source of past years and amount carried forward to future years.

10) The new form has added space for corporates to mention for any transactions with Cyprus. Details of such transactions have to be provided and all documents have to comply with the respective compliance requirements.

11) As far as companies, directors and limited liability partnerships go, unique identification numbers issued by the Ministry of Corporate Affairs have to be mentioned.

12) ITR 4 has to be used by individuals and HUFs who earn income from a proprietary business or profession. This year, space is added to this form to mention PAN number details of debtors for whom deduction claimed for bad debts, when such a bad debt is Rs 1 lakh or more. 

These are the 12 major changes that the IT department brought in the ITR forms. Keep in mind, this year the focus is on disclosure and transparency, which means you have to provide more details than ever before. We suggest that if you aren't someone well versed with IT laws, it’s better to either take help of a tax consultant or file your returns online at a reputable returns filing site which can assist you. (By Bindisha Sarang)