The Income Tax Department, on Tuesday, put a proposal on the desk to rectify the confusion among the taxpayers related to ITR filing forms. The authority has introduced to commonize all existing ITR forms into one common non-confusing document, except ITR Form-7, for a taxpayer’s convenience.
Income Tax Department To Merge Existing ITR Forms
As per the Finance Ministry’s new proposal, a taxpayer is required to mention all incomes generated through virtual assets in a separate section. Also, all the tax payees except the trusts and non-profit working organisations will be allowed to utilise this newly proposed common ITR form, “on which the Central Board of Direct Taxes (CBDT) has invited stakeholder comments by 15 December”, mentioned livemint.
Presently, taxpayers belonging to different categories are required to file their ITR based on ITR forms ranging from ITR 1 to ITR 7.
“The current ITRs are in the form of designated forms wherein the taxpayer is mandatorily required to go through all the schedules, irrespective of the fact whether that particular schedule is applicable or not, which increases the time taken to file the ITRs”, read the statement from the Finance Ministry.
“The proposed draft ITR takes a relook at the return filing system in tandem with international best practices. It proposes to introduce a common ITR by merging all the existing returns of income except ITR-7”, further added.
Moreover, “the current ITR-1 and ITR-4 will continue. This will give an option to such taxpayers to file the return either in the existing form (ITR-1 or ITR-4), or the proposed common ITR, at their convenience.”
“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”, mentioned livemint quoting Jhunjhunwala.