All tax payers of assessment year 2008-09 will have to file their returns using the new saral i.e. ITR series 1 to 8. Mr.P.Chidambaram, Finance Minister on Saturday i.e. 28th of April, 2008 unveiled this form, filing procedure and has been classified that “This is to make the life simpler for all tax payers” and in his statement he said that “They have taken a fresh look and dropped it in response to demands from the public and the parliamentary standing committee on finance”.

The saral form has been replaced with ITR-1. The changed include the form is 2D, 2E and the dreaded annual cash flow statement, which was part of form 2F and all the newly designed forms are annexure-less, barring one that is to be used by political parties and charities. The key change in filing system is except charities, non-profit organizations and political parties all other tax payers have got an option to do their filing electronically from this year onwards. In future may be our finance minister will make e-filing as mandatory. Eventually, “this is a gradual process that’s the reason we asked them to do e-filing.” he said. However e-filing is mandatory for companies since 2008 and from this year onwards, it has been extended to all firms, which are liable to tax audit under section 44 AB of the Income Tax Act.

The cash flow statement, personal expenditure and income source details has been removed and in replacement of the same, now, the individual taxpayers will have to mandatorily enclose all high value financial transaction in the ITR-1 to 4.

At present state seven kinds of transactions are captured though the annual information returns, which are, cash deposits of Rs.10 lakh or more in savings accounts, credit card payments of Rs.2 lakh and more in a year and property purchase or sale of Rs.30 lakh and more etc. The failure to include this sort of information will lead to scrutiny and investigation of the returns. Chidambaram said that “may be some more transactions are expected to be brought under this system, but a clear decision has not yet been taken on these, as well as expanding the list of transactions that requires quoting the PAN number.

The new forms are available in the Income Tax department Website. May’14th or before, the forms are going to be formally notified by consulting and suggestions for changes which are going to be incorporated by the Institute of Chartered Accountants of India, so that tax payers can use them to file return by July 31st of this assessment year.

Chidambaram also took a clean care at the time of designing of the new forms. The previous saral form is in need of five to six annexure’s but the new ITR-1 is a three page form and completely annexure less. He says that “the logic behind annexure-less is to move towards e-filing, e-processing and e-assessment, so it will become popular”.