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Income Tax Department proposes common ITR for you; Check details here

Income Tax Department proposes common ITR for you; Check details here

The new proposed common ITR form would be available in parallel to old forms in ITR-1 and ITR-4

The inputs on the draft ITR are to be submitted by December 15, 2022 The inputs on the draft ITR are to be submitted by December 15, 2022

If multiple Income Tax Return (ITR) forms baffle you then there is some good news in store for you. This is because the Income Tax Department has proposed that it will introduce a common ITR by integrating all existing forms of return of income except ITR-7, which is applicable for charitable institutions, business trusts, investment funds, etc. 

Currently, taxpayers are required to furnish their income-tax returns in Form ITR-1 to ITR-7, depending upon the legal classification of taxpayer and nature of income.

Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP, says, "The new common ITR form would be available in parallel to old forms in ITR-1 and ITR-4 and the assessee belonging to ITR-1 and ITR-4 categories could choose to file old forms or the new, depending on convenience. Taxpayers filing return of income in Forms ITR-2, ITR-3, ITR-5 and ITR-6 would not have an option to file the old forms, once the new common form and related utility are notified."

While filing the draft form taxpayers will not be required to see the schedules that do not apply to them in a user-friendly manner with increased scope of pre-filling.

"The proposed draft of new ITR form is designed to facilitate suitable reconciliation of third-party data available with the Income-tax Department vis-à-vis data to be reported in ITR, to reduce compliance burden on taxpayers. The new form is customised for taxpayers with applicable schedules based on wizard questions," says Jhunjhunwala.

The circular says that once the ITR is notified the taxpayer is required to answer questions which apply to him and fill the schedules linked to those questions where the answer has been given as ‘yes’. As a result, the time and energy of the taxpayer will be saved and he will be relieved of the additional burden of going through all the parts of the ITR as is the requirement under the existing ITRs. 

"Contemporary reporting requirements such as pass-through income or loss under various heads, income from virtual digital assets, declaration and details of Business Connection, Permanent Establishment and Significant Economic Presence in India for non-residents, and details of foreign equity and debt interest held remain key highlights of the new common ITR form" adds Jhunjhunwala .
The inputs on the draft ITR are to be submitted by December 15, 2022.

Also Read: Centre extends ITR filing deadline for companies till November 7

Published on: Nov 01, 2022, 8:10 PM IST
Posted by: Shubham Singh, Nov 01, 2022, 8:00 PM IST