The Central Board of Direct Taxes (CBDT) has notified the Income-tax Return Forms (ITR Forms) for the Assessment Year 2023-24 through Notifications No. 04/2023 dated 10-02-2023 and 05/2023 dated 14-02-2023.
These forms will come into effect from 1st April, 2023 and have been notified well in advance in order to enable filing of returns from the beginning of the ensuing Assessment Year along with providing ample time to all the stakeholders for filing their returns.
Q What are the types of Income Tax Return (ITR) Forms?
A There are seven types of ITR forms as follows :
- ITR Form 1 (Sahaj) can be filed by an individual having income up to Rs. 50 lakh and receiving income from salary, one house property, or other sources.
- ITR Form 2 is for individuals and Hindu Undivided Families (HUFs) not having income from business or profession and not eligible for filing Sahaj.
- ITR Form 3 is for individuals and HUFs having income from business or profession.
- ITR Form 4 (Sugam) is for individuals, HUFs, and firms being a resident having total income up to Rs. 50 lakh and income from business and profession computed under sections 44AD, 44ADA or 44AE.
- ITR Form 5 is for persons other than individuals, HUFs, and companies, such as partnership firms, LLPs, etc.
- ITR Form 6 is for companies other than companies claiming exemption under section 11.
- ITR Form 7 is for trusts, political parties, charitable institutions, etc. claiming exempt income.
Q What are the changes in the New ITR Forms?
A No significant changes have been made to the ITR Forms in comparison to last year’s ITR Forms. Only the bare minimum changes necessitated due to amendments in the Income-tax Act, 1961 have been made as follows :
- Separate schedule for Crypto/VDA Income : If you earned any income from crypto or virtual digital assets in FY 2022-23, you will need to report such income in a separate schedule included under the head Capital Gains. This is in line with the taxation of VDAs that was introduced from FY 2022-23. You will need to report the date of acquisition, date of transfer, cost of acquisition, and proceeds received from the sale of VDA.
- Intraday Trading Disclosure : A new option has been added to allow for the disclosure of both turnover and income from intra-day trading in the Trading Account. Previously, only the gross profit transferred from the Trading Account was required to be declared.
- Old or New Tax Regime : A new questionnaire in ITR 3 and ITR 4 requires you to report if you have opted for the new tax regime in the previous assessment year and mention the year it was chosen. You must also state if you opted out of the new regime in any prior years and provide 10IE details for both selections.
- Balance Sheet Reporting of Advances : There has been a minor modification in the balance sheet reporting in the new ITR forms. Advances received from individuals specified in Section 40A(2)(b) of the Income Tax Act, as well as from Others, should now be mentioned under the 'Advances' category in "Source of Funds".
- SEBI Registration Number Disclosure for FII/FPI : Foreign institutional investors (FII/FPI) are now required to provide their SEBI registration number in ITR 2 and ITR 3 as well, apart from ITR 5 and 6.
Q What about the Common Return Form talked about in the Budget 2023?
A The tax department has not yet announced the common ITR form that was proposed in the Union Budget 2023-24.
Q Will I be able to file ITR from April 1st?
A Currently, CBDT has only notified the ITR forms. The utilities still have not been released, however, it may be important to note that ITRs have been notified well in advance compared to last year.
Now, even if the utilities become available on 1st April, it would not be possible for everyone to file ITR on the same date since Tax Deducted at Source (TDS) deducted in March and Form 16 gets updated around June.
