The Income Tax Department has notified forms for filing income tax returns for FY 2022-23. The Central Board of Direct Taxes (CBDT), through a notification dated February 10, 2023, has notified Income Tax Returns (ITR) forms 1-6, ITR-V (verification form) and ITR acknowledgement form.
AMRG & Associates Senior Partner Rajat Mohan said that the CBDT has notified the income tax return forms for Assessment Year 2023-24 (for income earned in 2022-23) quite early, which would help taxpayers prepare their income returns early this year.
In 2022, such forms were notified in the first week of April.
Early notification of the income tax returns forms would provide sufficient time to all stakeholders, comprising third-party software companies, e-filing portal, taxpayers and tax professionals.
This year, software vendors can use the additional time for an early implementation of excel utility and third-party software for the filing income tax returns, Mohan added.
Mentioned are the various ITR forms
ITR-1 and ITR-4 are simpler forms catering to several small and medium taxpayers.
ITR-1 form can be filed by individuals earning income up to Rs 50 lakh and those having income from salary, one house property and other sources (interest, etc.).
ITR-4 form is applicable for individuals, Hindu Undivided Families (HUFs) and firms having a total income of up to Rs 50 lakh and income from business and profession.
ITR-2 form is filed by those earning income from residential property.
ITR-3 form must be filed by professionals.
ITR-5 and ITR-6 forms are filed by LLPs and businesses.
The ITR forms are nearly identical to the previous ones, but there is an additional feature. A separate schedule for virtual digital assets (VDA) has been added to report income from assets such as cryptocurrency.
A few changes have been made, considering the provisions introduced in the Finance Act last year. From April 1, 2022, gains from transactions in virtual digital assets attract tax. Moreover, from July 1, 2022, transactions in assets such as cryptocurrency and non-fungible tokens, exceeding Rs 10,000 attract tax deducted at source at the rate of 1 per cent.
As per the new schedule, details related to VDA transactions must be filled. Taxpayers are required to mention details such as the date of acquisition and transfer, head under which income is to be taxed, cost of acquisition, consideration received and income from transfer of VDA. Those trading in the equity market are required to make additional disclosures. As per the new income tax forms, a section called ‘Trading Account’ has been introduced.
see also about: annual information statement income tax
Where share trading business is done, the entire trading must be bifurcated into intra-day trading and delivery-based trading and reported accordingly in ITR3/ ITR5/ ITR6.
The forms ITR 3 and ITR 4 include a new questionnaire to know if the taxpayer has opted out of the new tax regime in previous years.
See also: Types of Income tax return forms
