The Hindu : National : Cash-flow statement column to be scrapped

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Sunday, Apr 29, 2007
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Cash-flow statement column to be scrapped

Special Correspondent

Public criticism leads to move

NEW DELHI: Faced with sharp criticism from various quarters, including the Parliamentary Standing Committee, the Finance Ministry has decided to scrap the cash-flow statement provision and introduce a simpler income tax returns form for the assessment year 2007-08.

Briefing newspersons here on Saturday, Finance Minister P. Chidambaram said individuals having only salary and interest income would have to fill the new returns form (ITR-1), which did not have the column featured in last year's Form 2F.

"When we proposed some draft forms earlier, there were some concerns about column of cash- flow statement. We have taken a fresh look at that. We have decided to withdraw [the] column. This is in response to information received from the public and the Standing Committee on Finance."

In Form 2F, meant for individual assessees for the previous assessment year, taxpayers were expected to give their opening and closing balances with banks along with various expenditures incurred during the year. Although filling the column was not mandatory, the provision drew sharp criticism.

Apart from ITR-1, Mr. Chidambaram said seven more forms would be notified for the current assessment year for various taxpayer categories on May 14. The main features of the forms were that all except one — for charitable/religious trusts, political parties and other non-profit organisations — were annexure-less. Annexures would not be required to be added to these forms, except in the case of ITR-7. As such, they were amenable to electronic filing.

In the case of form ITR-1, there were two versions — a back-to-back two-page form and another consisting of three pages. The Ministry would consult the Institute of Chartered Accountants of India and notify one of them. Tax officials said except for the design there was no difference between the two forms.

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