The Central Board of Direct Taxes (CBDT) has recently released the Income Tax Return (ITR) forms for Assessment Year 2023-24, early by two months. The forms have been released in February instead of April, giving taxpayers more time to file their returns. The move has been welcomed by experts and is expected to provide much-needed relief to taxpayers grappling with the pandemic’s uncertainties.
The notification by the CBDT includes ITR forms 1-6, ITR-V (verification form), and ITR acknowledgement form. The early release of these forms is expected to benefit all stakeholders, including taxpayers, e-filing portals, third-party software companies, and tax professionals.
Here are the major changes in the new ITR forms:
- No changes in ITR-1.
- A new schedule for reporting income from Virtual Digital Assets (VDAs) has been added under Capital Gains.
- Taxpayers must report acquisition and transfer dates, cost of acquisition, and proceeds received on the sale of VDAs quarterly.
- The forms now have additional questions regarding the selection of the new tax regime.
- The form needs the taxpayer to report whether they opted for the new regime in the previous assessment year and to select the assessment year in which they did so.
- Taxpayers must report if they opted out of the new regime in any previous year and provide 10IE details for both selections.
According to Rajat Mohan, Senior Partner at AMRG & Associates, “the early notification of ITR forms will give taxpayers ample time to prepare and file their returns this year. This will also provide software vendors with extra time to develop and implement software and tools for efficient and accurate filing of ITRs.”
The ITR forms released by the CBDT cover a wide range of taxpayers, from individuals to businesses.
- ITR Form-1, also known as SAHAJ, is for the Release of ITR Forms to individuals with income from salary, income from one house property, and other sources such as interest up to 50 lakhs.
- ITR Form-2 is for individuals with income from the residential property over 50 lakhs.
- ITR Form-3 is for income earned by professionals, while
- ITR Form-4, also known as SUGAM, is for individuals and HUFs with incomes up to 50 lakhs and having income from business and profession.
- Lastly, ITR Form-5 and 6 are for LLPs and businesses.
The economic slowdown, job losses, and reduced incomes have affected many individuals and businesses. The early notification of ITR forms is expected to relieve taxpayers who can now file their returns with less stress and more time.
As in Budget 2023-24, the Finance Minister prioritised improving taxpayer services by making compliance easy and smooth for the Middle-class section of society.
To achieve this, the Department has recommended the implementation of a new Common IT Return Form and wants to improve the grievance redressal process. A person’s income up to Rs. 7 lakh is exempt from taxation because the personal income tax refund ceiling has also been raised from the earlier Rs. 5 lakhs to Rs. 7 lakhs.
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