Common Income Tax Return Form

A single Income Tax Return (ITR) form has been proposed for all taxpayers. The Central Board of Direct Taxes (CBDT) recently released the draft of the proposed form for receiving public inputs till December 15.

How will the new ITR format benefit taxpayers?

  • The proposed form will be customized based on the questions to be answered by the taxpayer.
  • This will reduce the time taken to file income tax returns.
  • It will be beneficial for both individual and non-business taxpayers.
  • Its user-friendly schedule design has a well organized and logical flow. This increases the chances of filing taxes early.
  • The IT department can easily compare third-party data with the new form, leading to reduced compliance burden on taxpayers.

How many types of ITR forms are there?

  • 7 types of ITR forms are used for different categories of taxpayers. These are:
  • ITR-1 (Sahaj) is for small and medium taxpayers with income up to Rs 50 lakh from salary, a house and other sources (interests etc.).
  • ITR-2 is filed by people who have income from residential property
  • ITR-3 is for people who have income from profits earned through business or profession
  • ITR-4 (Sugam) is filed by individual, Hindu undivided families and entities with total income up to Rs.50 lakh from business and profession.
  • ITR-5 and 6 are filed by Limited Liability Partnership (LLP) businesses respectively
  • ITR-7 is filed by trusts and not-for-profit entities

What are the changes made in the draft ITR form?

  • All taxpayers except trusts and non-profit organizations can use the common ITR form. It merges all existing ITR forms except ITR-7.
  • Under this new format, taxpayers will be given the option of using either the common form or the existing ITR-1 or ITR-4.
  • However, other old tax forms (ITR-2, ITR-3, ITR-5, ITR-6) are not part of this new format and their users only have the option to use the common form.
, , ,

Leave a Comment

Your email address will not be published. Required fields are marked *

Shopping Cart
error: Copying Not Allowed !!