What’s new with ITR-4 in assessment year 2015-16?

ITR- 4 is the income tax return form for freelancers, professionals or those who run a business. If you have been filing ITR-4 and want to know what changed in the forms from last year, read on.

There has been some confusion about the additional information that is being sought this year, and here is the list of significant changes in ITR-4.

• Aadhaar card information & passport number – An individual tax payer must provide aadhaar card and also a passport number, where available.

• Details of bank accounts held – Similar to other ITR -1, ITR-2, ITR-2A, details have been requested for IFS Code of the bank, name of the bank, account number, whether it’s a savings or current and account in which refund should be credited.

• Foreign assets or income or bank accounts – Information about whether the taxpayer holds assets located outside India, any signing authority in an account outside India or whether there is income from any source outside India, in case yes is ticked here, details have to be provided in Schedule FA.

• Schedule FA – Foreign assets, accounts and income disclosure – In schedule FA on foreign assets disclosure, the following additional details have been added.

a) Foreign Bank accounts details: It is now further required to furnish details of interest accrued in the account, the amount which is taxable from this interest and mention the schedule where it has been offered in the return.

b) Similar details are asked of income from financial interest in any entity outside India, along with details of income offered to tax from such income and details of where it has been mentioned in the return.

c) Similar disclosure requirement is also required for Immovable property outside India, capital asset held outside India (including any beneficial interest) and for a trust held outside India, including income from any other source outside India, not included above.

• Details of utilization of capital gains account scheme – Tax payers to mention if unutilized capital gains on asset transferred during the previous years (FY 2011-12 and FY 2012-13) was deposited in the Capital Gains Accounts Scheme within due date for that year. And also to provide details (for each FY 2011-12 and 2012-13) of utilization of amount deposited in capital gain account scheme. With details of relevant income tax section in which the deduction was claimed in these years, amount utilized from the capital gains account to purchase or construct new asset as well as amount unutilized lying idle in capital gain account scheme till the date of filing of return of income.

Unutilized amounts from capital gains account schemes are taxed when not invested within the specified period. The uninvested amount is taxed as short term capital gains when the specified period for investment lapses.

• Details of DTAA benefit claimed – Additional disclosures have been added where no tax has been charged to an NRI by virtue of DTAA benefit. Details are required for name of the country, article of DTAA, Whether Tax Residency Certificate was obtained or not. One has to mention the corresponding section of the Act which prescribes the rate.

• Additional disclosure for MAT calculation – In schedule AMT, under adjustments made under section 115JC(2) a row has been added for providing information on deduction claimed under section 35AD as reduced by the amount of depreciation on assets on which such deduction has been claimed.

• Additional Details of exempt agricultural income – Instead of net agricultural receipts, gross agricultural receipts have been requested, with details of expenses incurred on agriculture, unabsorbed loss of previous 8 years.