Personal finance

Common ITR form explained: How it will make income tax filing more convenient

Common ITR form explained How it will make income tax filing more convenient

Common ITR form explained: How it will make income tax filing more convenient

Photo : BCCL

The tax department has proposed a common ITR Form that would replace all ITR Forms, except ITR-7, and the taxpayers will be able to download the appropriate utility to file ITR based on questions answered by them related to their income and filing status.

For the taxpayers eligible to file

ITR-1

(Sahaj) and ITR-4 (Sugam), there will be an option to select any of the two ITR Forms directly, or to use the common ITR Form. However, for the taxpayers eligible to file

ITR-2

(ITR for capital gains) and

ITR-3

(ITR for Business Returns), there will be no other option, but to use the common ITR, when implemented.

While CBDT plans to simplify the ITR filing process with the proposed common ITR, frequent changes in the tax return process can be a challenge for thousands of taxpayers. To answer a series of questions that may require detailed knowledge of tax laws lay taxpayers may have to end up paying for a chartered accountant’s services. Here are the plus and minus points of the proposed common ITR.

No need to go through the process of selecting the correct ITR anymore

At present, a taxpayer has to select the right ITR form applicable to him or her while filing the income tax return. The selection of the correct ITR form depends on various factors — status of the taxpayer (individual, HUF, firm), types of income earned (such as salary, rental income, business income, capital gains), residential status (resident or non-resident), etc.

“For instance, an individual with salary income and one house property, qualifying as a resident and having income less than Rs 50 lakh is eligible to file ITR 1. However, if the same individual has capital gains or capital loss, then he or she has to fill up ITR 2,” an ET report quoted Sudhakar Sethuraman, Partner, Deloitte India, as saying.

The proposed common ITR is aimed at eliminating this process of selecting the correct income tax return form applicable to a taxpayer. The common ITR form will be an online questionnaire-based form. The proposed form has certain schedules such as basic information (PAN, name, address), computation of total income, computation of total taxes, details of bank accounts, and schedule of tax payments (taxes deducted at source, self-assessment tax, etc.) which are applicable to all.

Source: https://www.timesnownews.com/business-economy/personal-finance/common-itr-form-explained-how-it-will-make-income-tax-filing-more-convenient-article-95437599

Donovan Larsen

Donovan is a columnist and associate editor at the Dark News. He has written on everything from the politics to diversity issues in the workplace.

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