EVERYTHING ABOUT DRAFT COMMON ITR FORM
The Central Board of Direct Taxes (CBDT) has proposed the introduction of a common Income Tax Return (ITR) Form which will replace the current different types of ITR forms available to taxpayers for filling their Income Tax Returns with the Income Tax Department. The proposed new common ITR form will merge all the existing forms from ITR 1 to ITR 6 except the ITR -7 which is generally applicable to non-government institutions, charitable Institutions, business trusts, investment funds, etc. The current ITR-1 and ITR-4 will continue even after the introduction of the proposed common ITR Form which will provide the taxpayers with an option to either file the tax returns in the existing ITR- 1 or ITR – 4, or the proposed common ITR at their convenience.
In the current situation, for filling the tax returns, taxpayers have to select the applicable ITR form from the ITR 1 to ITR 7 depending upon the nature/type of person (individual, HUF, firm) in accordance with their nature of income (such as salary, business income, capital gains, rental income). The current available ITR forms are designed in a way wherein the taxpayer for filing the tax return is mandatorily requisite to go through all the schedules in the ITR form, irrespective of the fact whether that particular schedule/information sought is applicable or not, which increases the time taken as well complex the process to file the ITRs.
The scheme of the proposed common ITR is as follows:
1. 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.
2. The ITR is customized for taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).
3. 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.
4. Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules.
5. 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.
6. 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.
