Common ITR form for all proposed by govt, here’s what you need to know
The Central Board of Direct Taxes (CBDT) has proposed a standard income tax return form that aims to replace six of the seven existing ITR forms, ITR 1 to ITR 6, in an effort to simplify the process of submitting income tax return (ITR). It is expected that the proposed ITR form will be applicable from financial year (FY) 2022-23 onwards.he common ITR form will be an online questionnaire-based form.
The proposed common ITR form does not include ITR form 7, which is relevant to charitable organisations, business trusts, investment funds, among others.
It is important to note that the taxpayer has the choice to submit ITR 1 or ITR 4 (if applicable) in place of the standard ITR form if they so choose.
Although the proposed single ITR is intended to streamline the ITR filing process, thousands of taxpayers may find it difficult to keep up with frequent changes in the tax return filing procedure.
The cost of a chartered accountant’s services may be incurred by ordinary taxpayers in order to respond to a series of queries that may necessitate in-depth understanding of tax regulations.
According to CBDT, the combined form focuses on smart design, logical flow and increased scope of pre-filing. “It will also facilitate 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 complaince burden for the taxpayers,” the CBDT circular reads.
The taxpayers are currently required to read through every schedule when completing ITR forms. This takes more time to file taxes regardless of whether or not that specific schedule is applicable. The new ITR form will ask taxpayers a series of questions in a Yes/No format, and based on their responses, only the relevant schedules will become available to them for filing.
All taxpayers, however, are required to provide the Basic Information (comprising sections A to E), the Schedule for Calculation of Total Income (Schedule TI), the Schedule for Calculation of Tax (Schedule TTI), the Details of Bank Accounts, and the Schedule for Tax Payments (Schedule TXP).
As it is a draft proposal, CBDT has requested inputs of the ppeople which are to be sent by December 15.
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