Common ITR Form Latest Update: Soon all taxpayers will be able to file income tax returns through a single ITR form. The Finance Ministry has come up with a proposal for a common income tax return form for all taxpayers. Regarding this proposal, the Finance Ministry has sought suggestions from the stakeholders by December 15, 2022. And there is a possibility that a common ITR form can be announced in the budget of 2023-24.
At present, 7 types of ITR forms are available for different categories of taxpayers. But the Finance Ministry has now come up with a proposal for a single ITR form for all taxpayers. Except ITR-7, all other ITR forms will be merged. According to CBDT, while filing income tax returns through common ITR will be easy for taxpayers, taxpayers and non-business type taxpayers will also save time in filing ITR. All taxpayers, except trusts and non-profit organizations, will be able to use Common ITR for filing income tax returns.
According to CBDT, ITR-1 and ITR-4 will continue. But taxpayers will have the option to file income tax return through Common ITR. However, once the notification is issued, taxpayers filing returns through ITR-2 and ITR-3 will be able to file returns only through the common ITR form.
What will be the effect on taxpayers
Two years ago, it came up with a new e-filing website for filing income tax returns. Taxpayers had to learn a lot to file returns online. But once the common ITR form is out, taxpayers will have to learn everything from a new way to file returns. Also, taxpayers will have to take many new decisions at the time of filing the return, such as filing the return through the old ITR form or opting for the common ITR.
The tax department has been continuously making new experiments. First of all he came with the pre-filled ITR form. After that, the Annual Information System was introduced last year to collect information about every financial transaction of taxpayers and their income.
At present, there are 7 types of ITR forms.
ITR Form No.-1 Income tax return form number is filled by those taxpayers whose annual income is up to Rs 50 lakh. Apart from salary, his source of income should be income from a property, interest income, dividend income and income from agriculture up to Rs 5,000 per annum.
ITR Form No-2 If there is a capital gain from the sale of assets like mutual funds, stocks or there is more than one house property, then such taxpayers have to file ITR-2.
Tax Return Form No-3 – For those individuals and HUF who have income from profit or profit from business.
ITR Form No – 4 – ITR-4 also known as Sugam, is applicable for individuals and HUFs (Hindu Undivided Families) (other than LLPs) whose total income from business and profession is up to Rs 50 lakh. This is not for a person who is either a director in a company or has invested in unlisted equity shares or if income tax on ESOP is deferred or agricultural income exceeds Rs.5,000.
ITR-5 is for LLP and ITR-6 is for business income, while ITR-7 is required to file returns to the trust.
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