Common ITR Form For All Proposed By CBDT. Here's What Tax Payers Should Know

The CBDT proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. However, the current ITR-1 and ITR-4 will continue

The current ITRs are in the form of designated forms wherein the taxpayer has to mandatorily go through all the schedules, despite the fact whether that particular schedule is applicable or not, thereby increasing the time taken to file the ITRs.

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In order to simplify the process of income tax return (ITR) filing, the Central Board of Direct Taxes (CBDT) has proposed a common ITR form for all taxpayers. The CBDT has proposed to merge all ITR forms except Form-7.

Which ITR forms are currently used by taxpayers?

Taxpayers are required to file their income tax returns using ITR-1 to ITR-7 depending on the type of person and nature of income.  Typically, the CBDT issues updated ITR forms around the beginning of the new assessment year in April. Taxpayers use these updated forms to file returns on income earned in the previous year or the relevant financial year.

The current ITRs are in the form of designated forms wherein the taxpayer has to mandatorily go through all the schedules, despite the fact whether that particular schedule is applicable or not, thereby increasing the time taken to file the ITRs.

What’s proposed by CBDT?

On November 1, the CBDT issued a draft common Income-tax Return form to replace the multiple ITR forms currently in use. The proposed draft ITR takes a relook at the return filing system in tandem with international best practices, the CBDT noted.

In a major step towards ease of compliance, CBDT proposes to introduce a common ITR by merging all existing ITRs except ITR-7. Draft common ITR Form is available on https://t.co/fDrSV3LQ9P
Inputs may be sent via email at dirtpl4@nic.in & dirtpl1@nic.in, latest by 15.12.2022. pic.twitter.com/imKz61YXmH

— Income Tax India (@IncomeTaxIndia) November 1, 2022

The CBDT proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. However, 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," it added.

The CBDT has asked to share inputs from stakeholders and the general public on the draft common form till December 15.

What’s the scheme of the proposed common ITR form?

• 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 taxpayers.
• The ITR is customized for taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).
• 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 the taxpayer.
• Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules.
• 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.
• The utility for the ITR will be rolled out in such a manner that only applicable fields of the schedule will be visible and wherever necessary, the set of fields will appear more than once.

Will this make the job easy for taxpayers?

Most taxpayers feel that introduction of the common ITR forms will help the assessees save time because it will eliminate the need to check out schedules that are not applicable to them.  Apart from this taxpayers will now be at ease in deciding which return form is applicable for the year. However, the extent to which this will simplify the tax filing process will be completely understood once the utility is released by the department, feel tax experts.