The government has introduced a new four-page format of Form 2E for filing Tax returns by salaried individuals and Hindu undivided families for the assessment year 2007-08. However, they have the option to fill the Saral, Form 2E this year.

The new form is “self-Explanatory” and “Easy to fill in”. The tax consultants remained skeptical. In the new form for salaried individuals and HUFs without professional, business or agriculture income will require to quote expenditure, including lumpsum household spend, in addition to income, however its mandatory to furnish a cash flow statement from 2008-09.

The tax payers from now onwards, have to mention the details pertaining to all the receipts and expenses culminating with the cash balance statement, not only investments that are eligible for exemption/deductions as at present. Receipts side, they can mention gifts, loans etc and opening balance.

The simplified form of saral i.e. ITR-1 doesn’t require any annexure’s like details of total income r the form 16 which contains the details of tax deductions at source. Tax consultant Mr.Subhash Lakhotia told to agencies that “the new format would frighten tax payers, this is definitely not simpler than saral”. However, Mr. Mukesh Bhutani, Partner, BMR Associates, agreed with the Govt’s view that a format which captures expenditure too, would make cross-verification easier and said that “the new format allows revenue department to conduct a meaningful assessment”.

But, KM Chandrasekhar, Revenue Secretary said that “Form 2F would help track down evasion, expedite issue of refunds. It would obviate scrutiny and intrusive investigation. In electronic mode, the information furnished under the new format would be conducive for cross-verification with other data available with the government like annual information returns”.

E-filing of returns in the new format would enable centralised processing without any interface between the assessing officer and the taxpayer. However, the government is asking taxpayer to follow a two-step procedure, that is file returns electronically and then file returns on paper, in the paper returns they has to mention, the date of electronic transmission and acknowledgement number received by them.