FinMin proposes to introduce one common ITR form for all taxpayers, invites stakeholder comments
The finance ministry has proposed to merge all the existing ITR forms except ITR 7.
New Delhi, Nov 1 (PTI) The finance ministry on Tuesday proposed to come out with a user-friendly common income tax return form for all taxpayers, under which income from virtual digital assets will have to be disclosed under a separate head.
All taxpayers, except trusts and non-profit organisations, can file returns with the proposed new common ITR form, on which the Central Board of Direct Taxes (CBDT) has invited stakeholder comments by December 15.
Currently, there are 7 types of income tax return (ITR) forms which are filed by different categories of taxpayers.
ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are simpler forms that cater to a large number of small and medium taxpayers. Sahaj can be filed by an individual having income up to Rs 50 lakh and who receives income from salary, one house property/other sources (interest etc).
ITR-4 can be filed by individuals, Hindu Undivided Families (HUFs) and firms with total income up to Rs 50 lakh and having income from business and profession.
ITR-2 is filed by people having income from residential property, ITR-3 by people having income as profits from business/ profession, ITR-5 and 6 by LLPs and businesses respectively, while ITR-7 is filed by trusts.
The CBDT, under the finance ministry, said that ITR-1 and 4 would continue, but individuals would also have the option to file returns of income in the common ITR form.
“It proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. The draft ITR aims to bring ease of filing returns and reduce the time for filing the ITR by individuals and non-business-type taxpayers considerably,” the CBDT said.
The taxpayers will not be required to see the schedules that do not apply to them. It will have a smart design of schedules in a user-friendly manner with a better arrangement, logical flow, and increased scope of pre-filling.
“It will also facilitate the proper reconciliation of third-party data available with the Income-tax Department vis a vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers,” the CBDT said.
The proposed ITR would be customised for the taxpayers with applicable schedules based on certain questions answered by them.
Once the common ITR form is notified, after taking into account the inputs received from stakeholders, the online utility will be released by the Income Tax Department.
“In such a utility, a customised ITR containing only the applicable questions and schedules will be available to the taxpayer,” the CBDT said.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala said 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.
“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,” Jhunjhunwala added.
Disclaimer :- This story has not been edited by The Sen Times staff and is auto-generated from news agency feeds. Source: PTI