New IT Form introduced; captures expenditure

New Delhi, June 2 (UNI) The government today came out with a new four-page Income Tax Return Form ('Form 2F') for the Assessment Year 2006-07, replacing the earlier 'Saral,' claiming that it was easy to understand and fill up.

A new feature of the new Form is that it attempts to capture expenditure of an individual, not just his income, as was the case earlier. The items that will entail expenditure for purposes of filing the return have been identified.

''The Form has been designed in a manner so that it is easy to understand and can be filled up with little or no help,'' Revenue Secretary K M Chandrasekhar told newspersons here.

Mr Chandrasekhar said assessees have an option of filing the return electronically or by way of a hard copy for this assessment year. Next year the returns will be accepted only in an electronic form.

''It will reflect the actual expenditure and cash inflow of an individual. An assessee will also have to give the opening and closing balance and the two will need to be matched,'' the top Finance Ministry official said.

Senior officials of the Central Board of Direct Taxes (CBDT) were present on the occasion.

The Form states that outgoings during the year will include: (a) expenses, investment under which deduction under Chapter VI-A (b) outgoings by way of other investments and (c) other outgoings.

An official said, ''People at present do not report their actual expenditure. As many as 50 per cent of the assessees have been indicating that their expenditure per annum is to the tune of Rs 50,000. This is gross under reporting as only the poor would incur this level of low expenditure.'' The Form can be used by resident individuals and HUF who do not have (a) profits and gains of business or profession (b) capital gains (c) agriculture income (d) more than one house/property or (e) any claim for relief under Section 89 in respect of arrears or advance of salary.

Mr Chandrasekhar said individuals and HUF having long-term capital gains from transacations in securities, on which Securities Transcation Tax (STT), has been paid can also use the form.

He said the Form is applicable with immediate effect. However to allow sufficient time to taxpayers to familiarise with this Return form, the existing one-page 'Saral Form 2E' can also be used up to July 31, 2006.

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