Draft common ITR form unveiled to simplify filing | The Financial Express

Draft common ITR form unveiled to simplify filing

The new common ITR form would be available in parallel to old forms in ITR-1 and ITR-4, with the option for the assessees under these two ITRs to choose to file the old forms or the new one.

Draft common ITR form unveiled to simplify filing
The I-T department has called for inputs on the draft ITR electronically by December 15 from stakeholders and the public.

To improve taxpayers’ experience and reduce the time taken to file income tax returns (ITRs) by individuals and non-business assessees, the income tax department on Tuesday unveiled a draft common ITR form, by integrating all existing forms of return of income except ITR-7, which is applicable for charitable institutions and business trusts.

The new common ITR form would be available in parallel to old forms in ITR-1 and ITR-4, with the option for the assessees under these two ITRs to choose to file the old forms or the new one. Taxpayers filing returns 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 utilities are notified. The I-T department has called for inputs on the draft ITR electronically by December 15 from stakeholders and the public.

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“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,” Nangia Andersen LLP partner Sandeep Jhunjhunwala said.

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Under the new ITR, taxpayers will not be required to see the schedules that do not apply to them. It aims for 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 I-T department said.

The scheme of the proposed common ITR is as follows: Basic information (comprising parts A to E), schedule for computation of total income (Schedule TI), schedule for computation of tax (schedule TTI), details of bank accounts, and a schedule for the tax payments (Schedule TXP) is applicable for all the taxpayers, the department said. The ITR is customised for taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).

The questions have been designed in such a manner and order that if the answer to any question is ‘no’, the other questions linked to this question will not be shown to him.Instructions have been added to assist in the filing of the return containing directions regarding the applicable schedules.

The proposed ITR has been designed in such a manner that each row contains one distinct value only. This will simplify the return-filing process. “The utility for the ITR will be rolled out in such a manner that only applicable fields of the schedule will be visible and wherever necessary, the set of fields will appear more than once. For example, in the case of more than one house property, the schedule HP will be repeated for each property. Similarly, where the taxpayer has capital gains from the sale of shares taxable under Section 112A only, applicable fields of Schedule CG, relating to 112A, shall be visible to him,” the department said.

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First published on: 02-11-2022 at 08:36 IST