The finance ministry on Tuesday proposed to come back out with a user-friendly frequent earnings tax return kind for all taxpayers, beneath which earnings from digital digital belongings must be disclosed beneath a separate head.
All taxpayers, besides trusts and non-profit organisations, can file returns with the proposed new frequent ITR kind, on which the Central Board of Direct Taxes (CBDT) has invited stakeholder feedback by December 15.
Presently, there are 7 varieties of earnings tax return (ITR) types that are filed by totally different classes of taxpayers.
ITR Kind 1 (Sahaj) and ITR Kind 4 (Sugam) are less complicated types that cater to a lot of small and medium taxpayers. Sahaj may be filed by a person having earnings as much as Rs 50 lakh and who receives earnings from wage, one home property/different sources (curiosity and many others).
ITR-4 may be filed by people, Hindu Undivided Households (HUFs) and companies with whole earnings as much as Rs 50 lakh and having earnings from enterprise and occupation.
ITR-2 is filed by folks having earnings from residential property, ITR-3 by folks having earnings as earnings from enterprise/ occupation, ITR-5 and 6 by LLPs and companies respectively, whereas ITR-7 is filed by trusts.
The CBDT, beneath the finance ministry, stated that ITR-1 and 4 would proceed, however people would even have the choice to file returns of earnings within the frequent ITR kind.
“It proposes to introduce a standard ITR by merging all the prevailing returns of earnings besides ITR-7. The draft ITR goals to convey ease of submitting returns and scale back the time for submitting the ITR by people and non-business-type taxpayers significantly,” the CBDT stated.
The taxpayers won’t be required to see the schedules that don’t apply to them. It would have a sensible design of schedules in a user-friendly method with a greater association, logical movement, and elevated scope of pre-filling.
“It would additionally facilitate the right reconciliation of third-party knowledge out there with the Earnings-tax Division vis a vis the information to be reported within the ITR to scale back the compliance burden on the taxpayers,” the CBDT stated.
The proposed ITR can be customised for the taxpayers with relevant schedules primarily based on sure questions answered by them.
As soon as the frequent ITR kind is notified, after considering the inputs obtained from stakeholders, the web utility shall be launched by the Earnings Tax Division.
“In such a utility, a personalized ITR containing solely the relevant questions and schedules shall be out there to the taxpayer,” the CBDT stated.
Nangia Andersen LLP Accomplice Sandeep Jhunjhunwala stated taxpayers submitting return of earnings in Varieties ITR-2, ITR-3, ITR-5 and ITR-6 wouldn’t have an choice to file the outdated types, as soon as the brand new frequent kind and associated utility are notified.
“Modern reporting necessities similar to go via earnings or loss beneath varied heads, earnings from digital digital belongings, declaration and particulars of Enterprise Connection, Everlasting Institution and Important Financial Presence in India for non-residents, and particulars of international fairness and debt curiosity held stay key highlights of the brand new frequent ITR kind,” Jhunjhunwala added.