The Central Board of Direct Taxes (CBDT) on November 01, 2022, issued a draft common Income-tax Return-request for inputs from stakeholders and the general public.
The draft suggests combining all current income tax returns—aside from ITR-7—to create a single, unified ITR. ITR-1 and ITR-4 will stay in place, nevertheless. Such taxpayers will then have the choice to file their returns in either the current forms (ITR-1 or ITR-4) or the proposed common ITR, depending on the most convenient.
The draft ITR attempts to make it simpler and quicker for individuals and other non-business types of taxpayers to file returns. The schedules that do not pertain to the taxpayers will not be made available to them. It aims to create intelligently designed, user-friendly schedules, and have a better layout, logical flow, and a wider variety of pre-filling. To lessen the compliance burden on taxpayers, it will also make it easier to properly reconcile third-party data that is available to the Income-tax Department with data that must be reported in the ITR.
The taxpayer is required to answer the questions that apply to him and to finish the schedules related to those questions that have a "yes" response. As a result, the taxpayer will save time and effort because they won't need to spend as much as they currently do reading through every component of the ITR. Compliance will be simpler as a result.
The Income-tax Department will launch the online utility after notifying stakeholders of the common ITR Form and considering their input. A customized ITR with only the pertinent questions and schedules will be made available to the taxpayer in such a service.
The scheme of the proposed common ITR is as follows:
(a) 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.
(b) The ITR is customized for the taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).
(c) 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.
(d) Instructions have been added to assist in the filing of the return containing the directions regarding the applicable schedules.
(e) 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.
(f) 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 draft ITR, based on the above scheme, is enclosed in Annexure A. Further, a sample ITR illustrating the step-by-step approach for filing the ITR in Annexure B and two customized sample ITRs for the firm and company in Annexure C and Annexure D respectively are also enclosed for illustrative purposes and are attached to the document.
The inputs on the draft ITR may be sent electronically to the email address [email protected] with a copy to [email protected] by December 15, 2022.
[Notification No. 370133/16/2022-TPL]
