The finance ministry has proposed to come back out with a typical revenue tax return (ITr) type for all taxpayers. Currently, there are 7 forms of ITR types that are filed by totally different classes of taxpayers. “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.
Archit Gupta, Founder & CEO, Clear mentioned the revenue tax division is transferring in direction of automation for ITR submitting with every passing 12 months.
“Earlier the pre-fill choice was launched for taxpayers and within the latest previous AIS has been launched. Allowing taxpayers and the division detailed info associated to each taxpayer’s revenue and monetary exercise,” Gupta said.
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.
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.
Taxpayers filing ITR-2 (ITR for capital gains) and ITR-3 (ITR for Business Returns) will now have to compulsorily file the common ITR, once it is notified and implemented, said Gupta.
Will it actually help the taxpayers?
Archit Gupta said frequent changes in the filing system make filing onerous for taxpayers, who have to re-learn the process to e-file. It also means the flow introduced last year by the department will have to undergo more change.
He further explained that right now in the transition period right now, there are too many decisions that a taxpayer has to make: “Should I take advantage of the previous tax regime or new tax regime?” “Should I take advantage of frequent ITR or proceed with ITR-1 / ITR-4?”
“We really feel taxpayers will now should be extra cautious whereas answering sure/no questions and be totally conscious of the implications. We additionally consider that additional simplification of questions will assist taxpayers self e-file efficiently,” mentioned Gupta.
7 forms of revenue tax return (ITR) types
ITR Form 1 (Sahaj) Sahaj could be filed by a person having revenue as much as ₹50 lakh and who receives revenue from wage, one home property/different sources (curiosity and so on).
ITR-2 is filed by folks having revenue from residential property
ITR-3 by folks having revenue as income from enterprise/ career,
ITR Form 4 (Sugam) are less complicated types that cater to numerous small and medium taxpayers.
ITR-5 is filed by LLPs
ITR- 6 is filed by companies respectively
ITR-7 is filed by trusts.
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