How are new ITR forms different from old ones; all you need to know

The Central Board of Direct Taxes (CBDT) has released the Income Tax Return (ITR) forms for the Financial Year 2022-23. With the timely release of forms, you can file ITR as soon as this financial year ends. While the tax forms largely remain the same here are a few things that have changed in the new ITR forms. 

First, you will now need to report Virtual Digital Assets (VDA) details while filing ITR for Assessment Year 2023-24.  This is in line with the budget announcements made last year.

“Taxpayers will be relieved that there are no changes in ITR-1. In the remaining forms, a new schedule for reporting Income from Virtual Digital Assets has been included under the head Capital Gains. This new schedule requires taxpayers to report the date of acquisition, date of transfer as well as the cost of acquisition and the proceeds received on the sale of VDAs. Income from VDA must be reported quarterly,” said Archit Gupta, Founder and CEO of Clear.

Moreover, the forms have also been amended to include additional questions relating to the selection of the new regime. The income tax department wants to know whether you opted in or out of the new tax regime in the past. 

“The form requires the taxpayer to report whether the filer has opted for the new regime in the last assessment year, and also select the assessment year in which it was opted. Additionally, another question has been inserted asking whether taxpayers have opted out of New Regime in any of the previous years and is also expecting the taxpayer to mention the 10IE details for both selections," said Gupta.

ITR Forms notified for Assessment Year 2023-24 include ITR-1 SAHAJ, ITR-2, ITR-3, ITR-4 SUGAM, ITR-5, ITR-6, ITR-V and ITR Acknowledgement. However, in November 2022 the income tax department also proposed to introduce a common ITR by integrating all existing forms of return of income except ITR-7, which is applicable for charitable institutions, business trusts, investment funds etc. 

“While the CBDT had released common ITR form for public consultation in November 2022, the new forms notified are separate ITR forms and one would need to wait for common ITR forms,” said Saraswathi Kasturirangan, Partner Deloitte India.

It was earlier stated that the new common ITR form will be available in parallel to old forms and the assessee belonging to ITR-1 and ITR-4 categories could choose to file old forms or the new, depending on convenience.

“In November 2022 the CBDT had circulated the draft version of the ‘Common ITR form’ where all ITR forms from ITR 1 to ITR 6 were proposed to be merged. This was aimed at bringing ease of filing for the taxpayers and reducing the time taken by them to file tax returns. The taxpayers filing ITRs 1 to ITR 4 were to have an option to file individual tax forms or the common ITR form as per their choice. This form is not yet released by the CBDT and one needs to wait and see if the CBDT would issue this common ITR subsequently,” said Aarti Raote, Partner Deloitte India.

CBDT has released tax return forms for the Financial Year 2022-23 well in advance this year. The move will help taxpayers to be well prepared on reporting requirements in the tax return forms. 
 

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