The Central Board of Direct Taxes (CBDT) on 1st November 2022 notified the common income tax return with an aim to bring ease of filing returns and reduce the time for filing the ITR by individuals and non-business-type taxpayers considerably.
The taxpayers will not be required to see the schedules that do not apply to them. It intends the smart design of schedules in a user-friendly manner with a better arrangement, logical flow, and increased scope of pre-filling. It will also facilitate the proper reconciliation of third-party data available with the Income-tax Department vis a vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers.
The proposed draft ITR takes a relook at the return filing system in tandem with international best practices. It proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. However, the current ITR-1 and ITR-4 will continue. This will give an option to such taxpayers to file the return either in the existing form (ITR-1 or ITR-4), or the proposed common ITR, at their convenience. The scheme of the proposed common ITR is as follows:
- 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.
- The ITR is customized for taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).
- 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.
- Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules.
- 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.
- 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.
The draft common ITR, based on the above scheme, has been uploaded on www.incometaxindia.gov.in for inputs from stakeholders and general public https://incometaxindia.gov.in/news/common-itr.pdf. A sample ITR illustrating step by step approach for filing the ITR and two customised sample ITRs for firm and company have also been provided for illustration. The inputs on the draft ITR may be sent electronically to the email address email@example.com with a copy to firstname.lastname@example.org by 15th December 2022.