The Hindu Business Line : `Options open on new tax form'

Soft-pedalling its stance that cash flow statements would become mandatory for salaried taxpayers from 2006-07 (assessment year 2007-08), the Government today said that all options are open and that it has not "foreclosed" its mind on the matter of applicability of the new Form 2F for assessment year 2007-08.

The cash flow statement, which has come in for criticism, forms part of Form 2F, which was notified last week.

The Finance Ministry had announced that Form 2F would be applicable only for assessment year 2006-07 and that the cash flow statement was optional for that assessment year.

However, it also then said that the cash flow statement would eventually become mandatory from 2006-07 (assessment year 2007-08).

On the applicability of the Form 2F and the cash flow statement for next year, the Revenue Secretary, Mr K.M. Chandrasekhar, told newspersons today that the Revenue Department had an "open mind" on this issue and that no final decision had been taken on the matter.

"As for next year (assessment year 2007-08), we have all options open. We can notify Form 2F in the current format (including the cash flow statement) or we can allow use of other types of forms. We have not foreclosed our mind to anything. We are receptive to ideas."

He also sought to allay apprehensions that Form 2F was technical and not `saral' for salaried taxpayers, maintaining that it was not complex as it was made out to be.

Mr Chandrasekhar said that Form 2F is not the only form for salaried taxpayers - it is one of six forms that can be opted for by a salaried taxpayer (Form 2, Form 2D, Form 2E or `naya saral', Form 2F, Form 3, and Form 16AA).

Although Form 2E is now being replaced by Form 2F, he pointed out that both forms could be used in the alternative up to July 31, 2006 (due date of return filing for assessment year 2006-07).

The Revenue Secretary also said that salaried taxpayers would require "more effort" to fill the existing naya saral form than the 2F form.

He also said that the Revenue Department was not attempting to know how much a taxpayer spends on milk or vegetables.

"We are only asking you to specify in broad terms how you used the money. We want you to specify the lumpsum amount, not the details."

He also said that the 2F has been introduced in view of certain drawbacks of the 2E.

"You (salaried taxpayer) would require less help than before if you go in for the new form 2F. The new form 2F would take less time and effort for an educated salaried person than the naya saral form."

Mr Chandrasekhar said that an annexure-less return format was being preferred as the Income-Tax Department was moving to a computerised environment.

"In an IT-based environment, we cannot have annexures. Form 2F is more electronic-friendly than naya saral."

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