Common Income Tax Return (ITR) Form: Will CBDT’s proposal ease taxpayers’ job?

income tax return: To ease the work of taxpayers, the Central Board of Direct Taxes (DBDT) has proposed Common Income Tax Return (ITR) form for all taxpayers. CBDT has proposed to merge all ITR forms except Form-7. Currently, taxpayers have to file their income tax return in ITR-1

to ITR-7 depending on the type of person and the nature of income. The current ITRs are in the form of specified forms, in which 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 ITR.

on common ITR Form The proposal, the CBDT said, “re-looks at the return filing system in tandem with the proposed draft ITR international best practices. It proposes to introduce a common ITR by merging all existing returns of income except ITR-7.” However, the existing ITR-1 and ITR-4 will continue.This will give such taxpayers the option to file returns in the existing form (ITR-1 or ITR-4), or the proposed common ITR, at their convenience.

The scheme of the proposed Common ITR Form is as follows:

(a) basic information (including Parts A to E), schedule for computing total income (Schedule TI), schedule for computing tax (Schedule TTI), details of bank accounts, and a schedule for payment of tax (Schedule TI) TXP) is applicable to all taxpayers.

(b) ITR is customized for taxpayers with applicable schedule based on certain questions (wizard questions) answered by the taxpayer.

(c) the questions are so designed and ordered that if the answer to any question is ‘No’, the other questions relating to that question shall not be shown to the taxpayer.

(d) Instructions have been added to assist in filing the return including instructions in respect of applicable Schedules.

(e) The proposed ITR has been designed in such a way that each row contains only one distinct value. This will make the process of return filing easier.

(f) The utility for ITR shall be initiated in such a way that only applicable areas of the Schedule shall appear and wherever necessary, the set of fields shall appear more than once.

See CBDT’s tweet below:

Will this make the job of taxpayers easier? Alok Agarwal, Partner, Deloitte India said, “The government has made it easy for taxpayers by auto-filling certain relevant details in ITR. The recent announcement on Common ITR may help taxpayers further, but to what extent it simplifies taxation? The filing process will be fully known once the utility is released by the department. Another measure that can help taxpayers is to simplify the text of disclosure requirements on ITR forms, by using some examples as follows which the common man cannot understand. Various section number references.”

Vineet Khandare, CEO and Founder, MyFundBazaar, said, “With an aim to reduce the time taken for filing returns by individuals and taxpayers, ITR intends to smartly design schedules in a user-friendly manner with effective arrangement and logical flow. With the questionnaire, the information provided by the taxpayer will be more concise and accurate, enabling the taxpayer to analyze the details shared with the records of the tax department to ensure credibility. Ultimately, CBDT intends to simplify the filing, Reduces redundant data with proposed common ITR – envisions an efficient automated tax-filing process.” Common ITR Form: Key Features of CBDT Proposal Highlighting the salient features of Common ITR Form, Archit Gupta, Founder and CEO, Clear listed the following:

1]disclosure of income and tax thereon in respect of virtual digital assets being business income;

2]Determination of tax residential status in the particulars;

3]determination of tax audit applicability in the statement; And

4]Disclosure in the statement of pass-through income.

However, the taxpayer needs to be careful while answering the question that will optimize the ITR utility as wrong answers may disable certain schedules that may be applicable to him.

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