The finance ministry on Tuesday proposed to return out with a user-friendly frequent revenue tax return type for all taxpayers, underneath which revenue from digital digital property should be disclosed underneath a separate head.
All taxpayers, besides trusts and non-profit organisations, can file returns with the proposed new frequent ITR type, on which the Central Board of Direct Taxes (CBDT) has invited stakeholder feedback by December 15.
Currently, there are 7 kinds of revenue tax return (ITR) varieties that are filed by completely different classes of taxpayers.
ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are easier varieties that cater to a lot of small and medium taxpayers. Sahaj will be filed by a person having revenue as much as Rs 50 lakh and who receives revenue from wage, one home property/different sources (curiosity and many others).
ITR-4 will be filed by people, Hindu Undivided Families (HUFs) and companies with whole revenue as much as Rs 50 lakh and having revenue from enterprise and occupation.
ITR-2 is filed by individuals having revenue from residential property, ITR-3 by individuals having revenue as earnings from enterprise/ occupation, ITR-5 and 6 by LLPs and companies respectively, whereas ITR-7 is filed by trusts.
The CBDT, underneath the finance ministry, mentioned that ITR-1 and 4 would proceed, however people would even have the choice to file returns of revenue within the frequent ITR type.
“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 mentioned.
The taxpayers is not going to be required to see the schedules that don’t apply to them. It could have a wise design of schedules in a user-friendly method with a greater association, logical circulate, and elevated 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 mentioned.
The proposed ITR could be customised for the taxpayers with relevant schedules primarily based on sure questions answered by them.
Once the frequent ITR type is notified, after bearing in mind the inputs acquired from stakeholders, the net utility will probably be launched by the Income Tax Department.
“In such a utility, a customized ITR containing only the applicable questions and schedules will be available to the taxpayer,” the CBDT mentioned.
Nangia Andersen LLP Partner Sandeep Jhunjhunwala mentioned taxpayers submitting return of revenue in Forms ITR-2, ITR-3, ITR-5 and ITR-6 wouldn’t have an choice to file the previous varieties, as soon as the brand new frequent type and associated 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.
