The Central Board of Direct Taxes has notified six income tax return forms for the assessment year 2023-24 as well as the income tax return verification form. While the forms remain largely the same as the ones for last year, taxpayers will have to now provide details on income from virtual digital assets.
A separate schedule for virtual digital assets has been provided that requires details like date of acquisition, date of transfer and head under which income to be taxed (capital gain). Further, in case the asset is a gift, the amount on which the tax has been paid for transfer of the asset also has to be provided.
This follows the new taxation regime for virtual digital assets that was announced in the Union Budget 2022-23 under which income from the transfer of these assets would be taxed at the rate of 30%. Further, a 1% TDS is also levied on payment of transfer of these assets. Gift of VDAs is also to be taxed in the hands of the recipient.
Experts noted that apart from the schedule on VDA, there are no significant changes. They also welcomed the move to notify the forms well in advance of the return filing season. Last year, the forms had been notified on March 30. The deadline for filing income tax returns is usually July 31 for individuals.
“Tax provisions for taxation of VDAs was introduced from FY 2022-23 hence the addition of new schedule is in line with the expectation,” noted Saraswathi Kasturirangan, partner, Deloitte India.
Other minor tweaks in the form include additional details required in the sections relating to general information section as well as for Tax Collected at Source, she said.
The other changes in the ITRs include addition of option to disclose turnover and income from intra- day trading in trading account as well as additional disclosure for individuals who have opted for or opted out of the new concessional income tax regime under Section 115 BAC of the Income Tax Act, said Maneesh Bawa, Executive Director, Nangia Andersen. In the personal information sector, taxpayers will also have to disclose whether they are a foreign institutional investor or foreign portfolio investor.
Noting that the CBDT has proactively notified the ITR forms for AY 2023-24, Bawa said,“Usually, these forms are notified later in the month of March or early April every year. This will help the taxpayers prepare for relevant disclosures that may be required in the forms in a timely fashion.”
The forms notified by the CBDT include ITR-1 or Sahaj for individuals with a total income of up to Rs 50 lakh; ITR-2 for individuals and HUFs having income from profits and gains of business or profession; ITR-3 for individuals and HUFs having income from profits and gains of business or profession; ITR- 4 or Sugam, ITR-5 and ITR-6. “They shall come into force with effect from the 1st day of April, 2023,” the CBDT said.
The CBDT is also working on a common income tax return form, which was also announced in the Union Budget 2023-24. It is, however, still in the development stage and will require some technical changes on the website and tax officials have indicated that it would take some more time before it can be launched.
Noting that taxpayers are looking forward to the common ITR, Bawa said it would create a smart design of schedules in a user-friendly manner with a better arrangement, logical flow, and increased scope of pre-filling.