Common ITR form for all the taxpayers

Common ITR form for Public discussion

In this post, we will be discussing Common ITR form, and a few other forms, returns, and statements that need to be filed electronically as per CBDT. We’ll discuss each section in detail :

Introduction to common ITR form

It has been proposed by the Income tax Department to introduce a common ITR form that will replace all existing forms of return except ITR-7. This will simplify the process of filing an income tax return by the central board of direct taxes (CBDT).

However, the current ITR-1 and ITR-4 will continue. As a result, taxpayers could file either the existing form (ITR-1 or ITR-4) or the proposed common ITR at their convenience.

Currently, taxpayers are required to file income tax returns in form ITR 1 through ITR 7, depending on their legal classification and the nature of their income.

How is this different?

The current ITRs are designated forms in which the taxpayer must read all schedules, regardless of whether that schedule applies to them or not. As a result, it may result in avoidable difficulties for taxpayers to file ITRs. 

The new proposed draft ITR will take you through only the relevant schedules and forms, based on your income category, along with international best practices.

What does the new form have for the taxpayers?

All taxpayers receive the following basic information, which consists of parts A to E, such as a schedule for calculating income, a schedule for calculating tax, details of bank accounts, and a schedule for paying taxes.

The new form directs taxpayers to only the necessary schedules or forms that are applicable to them. Using the software, the schedules are selected based on a basic FAQ form of questions, where the taxpayer selects the income category under which the return should be filed.

Each of these questions is designed in such a manner that if the taxpayer answers “no”, all of the other questions related to this question will not be displayed.

In this facility, taxpayers can file the form on their own, as well as receive instructions regarding the applicable schedules to assist them in filing the form.

The Tax Department believes that the utility for the ITR will be implemented in such a way that only relevant fields of the schedule will be visible, and whenever necessary, the same set of fields will appear more than once.

In addition to this, all the other changes in the union budget for the current financial year, such as income reporting from crypto assets and others, will also be there in the final form.

There is still time for input on the draft ITR form, which can be sent through email until the 15th of December

Scheme of the proposed common ITR

The CBDT further stated that the proposed draft ITR reexamines the return filing system in tandem with international best practices.

(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 customised 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.

Therefore, taxpayers should only respond to questions that concern them. They can also complete the schedules associated with the questions to which they answered “yes.” According to the CBDT, the updated proposed form will allow taxpayers to save time and effort.

 Source: Ministry of Finance


CBDT mandates e-filing of certain forms, returns, statements

In order to promote digitalization and e-Governance, the Central Board of Direct Taxes (the “CBDT”) announced on July 16, 2022, that a number of forms, returns, and statements must be submitted electronically and to be verified as mentioned in the rules. With this new change, taxpayers will find it easier to submit documents electronically to the tax authorities and save the trouble of physically filing them.

Some of the Notification Forms are normally applicable to an individual. Here is a quick list of those Forms:

1. Form 10F:

A taxpayer who claims relief under the Double Tax Avoidance Agreement (DTAA) and must obtain a Tax Residency Certificate (TRC) from the relevant overseas country should use this Form. TRCs obtained from overseas tax authorities usually contain most of the information required by the Rules. However, if the TRC does not give the necessary information, the taxpayer must provide the remaining details on Form 10F.

As per the erstwhile provision of the Act, the said Form was signed and submitted physically by the taxpayer to Indian tax will now be required to be furnished electronically in order to claim treaty benefits under the relevant DTAA. 

2. Form 101A:

While section 80DD offers tax benefits if an individual taxpayer has spent money supporting a dependent family member or members who are disabled, section 80U offers tax benefits if an individual taxpayer has a disability. In the relevant Act sections, the amount of the deduction that may be claimed is specified. Apart from the certificate of disability from an approved medical authority in Form 10IA, no other document is necessary for claiming the deduction, nor are there any requirements to present bills for the expense of treatment.

Before filing income tax returns for the relevant financial year, Form 10IA and a properly signed certificate obtained from a medical authority must now be submitted electronically.

3. Form 28A:

As per the relevant provisions of the Act, Everyone who is required to pay advance tax must calculate it and pay it by the deadlines. However, there are some instances where tax authorities will serve an order clarifying the tax officer’s estimate of the amount of income and advance tax due.

If the taxpayer believes that the advance tax due will be less than the tax officer’s predicted calculation, then the taxpayer is required to send an intimation to the AO in Form 28A giving an estimate of such reduced income and advance tax. The Form is prescribed under Rule 39 of the Income-tax Rules.

Form 28A must now be submitted online in order to inform the AO of the revised estimate of income and advance tax due.

4. Form 27C:

Form 27C is a declaration form for non-TCS deduction by a buyer of goods. As per the income tax rule, the seller of the specified goods must collect tax from the buyer. 

The buyer, who is an Indian resident and uses the purchased materials to produce goods or other items, may make a declaration in Form 27C.The buyer provides a declaration in duplicate on Form 27C. A copy of the declaration must be delivered to the person collecting tax, who must then submit the copy to the appropriate authorities by the seventh day of the following month. 

For residents to be exempt from tax at source collection, Form 27C must now be electronically submitted by the buyer.

5. Form 68:

Section 270A of the Act provides penalty for misreporting of income in the income tax return and section 276C or section 276CC provides for initiation of prosecution.

Section 270AA of the Act allows for the provision of immunity from penalty imposition and the beginning of proceedings within one month of the end of the month in which the order has been received. Form 68 was earlier to be filed manually. 

However, the CBDT has now notified Form 68 to be filed electronically, as the prescribed application Form u/s 270AA(2) for making application for grant of immunity.

We have reached the conclusion of this post on Common ITR form and few other forms, returns, and statements that needs to be filed electronically as per CBDT. Feel free to share your views and opinions with us in the comment section below.