Income Tax Return Forms: Not so Saral

By Divya Baweja (Partner, BMR & Associates) and Nitin Baijal (Director, BMR & Associates)

The monsoon this year has been no different for the taxpayer with new Income Tax Return Forms ('ITR Forms') once again raining on the various categories of taxpayers. These forms are applicable with respect to Assessment Year 2007-08 alone. In relation to the salaried taxpayer, it is claimed that the unique selling point of the new ITR Forms is that they are paperless and less complex.

A perusal of the forms however indicates that they may actually be more complex than the earlier forms and in most cases would require the assistance of a tax consultant. However, given the government`s aim of a paper-less and annexure-less return filing system coupled with the aim to curb tax evasion, the introduction of these forms represents a significant step forward. Through this article, we attempt to demystify for the salaried class the two main ITR forms applicable in their case i.e. Forms ITR-1 and ITR-2.

Form ITR-1: Overview

ITR- 1 is the return form for individuals having income from one or more of the following sources:

* Income under the head salaries;

* Interest income whether such income is taxable or tax exempt;