NEW COMMON ITR FORM COMING SOON

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On 1st November 2022, the finance ministry recommended a common ITR Form for all taxpayers. Currently, there are 7 different types of income tax return (ITR) forms, from ITR 1 to ITR 7, that can be filed by various taxpayer groups based on a number of factors, such as the source, level, and type of income, among others. To ease the ITR e-filing process, The Central Board of Direct Taxes (CBDT)  has put out a draft universal ITR form for comment from stakeholders and the general public.


Except for ITR-7, all ITR Forms would be replaced with the common ITR Form. ITR-1 and 4 would still exist, but people would also be able to submit their ITR using the common ITR form. However, The common ITR will be the only alternative available to taxpayers who are entitled to file ITR-2 (ITR for capital gains) and ITR-3 (ITR for business returns) once it is adopted.


Advantages of Common ITR Filing as per CBDT



Taxpayers will have the choice to file their returns at their convenience in the proposed common ITR or the currently used forms (ITR-1 or ITR-4).


The proposed ITR attempts to make it simpler and quicker for individuals and other non-business types of taxpayers to file returns.


The schedules that do not pertain to the taxpayers won't be made available to them. It aims to create schedules that are intelligently designed, user-friendly, and have a better layout, logical flow, and a wider variety of pre-filling.


In order to lessen the compliance burden on taxpayers, it will also make it easier to properly reconcile third-party data that is available to the Income-tax Department with data that must be reported in the ITR.



Conclusion


With common ITR filing, the taxpayers' responses to yes/no questions will be used to determine the right ITR Form and which tax regime is applicable, therefore they should be more careful when preparing their income tax returns.


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