treeviewThe tax department has proposed a common ITR Form that would replace all ITR Forms except ITR-7, and taxpayers will be able to download the appropriate utility to file ITR based on their answers to questions about their income and filing status.
Taxpayers who are eligible to file ITR-1 (Sahaj) and ITR-4 (Sugam) will have the option of directly selecting one of the two ITR Forms or using the common ITR Form. However, when implemented, taxpayers eligible to file ITR-2 (ITR for capital gains) and ITR-3 (ITR for Business Returns) will have no choice but to use the common ITR.
While the CBDT intends to streamline the ITR filing process with the planned single ITR, thousands of taxpayers may face difficulties due to frequent changes in the tax return procedure. To answer a series of questions that may need a sophisticated understanding of tax regulations, ordinary taxpayers may have to pay for the services of a chartered accountant. Here are the benefits and drawbacks of the proposed common ITR.
There is no longer any need to go through the procedure of selecting the right ITR.
Currently, while completing an income tax return, a taxpayer must pick the appropriate ITR form. The correct ITR form is determined by several factors, including the taxpayer’s status (individual, HUF, firm), the type of income earned (such as salary, rental income, business income, capital gains), residential status (resident or non-resident), and so on.
“For example, an individual with a salary income and one house property who is a resident and has an income of less than Rs 50 lakh is eligible to file ITR 1. However, if the same individual has capital gains or losses, he or she must file ITR 2 “According to an ET report, Sudhakar Sethuraman, Partner, Deloitte India, said.
The proposed common ITR aims to eliminate the process of selecting the appropriate income tax return form for a taxpayer. The common ITR form will be an online questionnaire-based form. The proposed form includes schedules for basic information (PAN, name, address), computation of total income, computation of total taxes, details of bank accounts, and tax payments (taxes deducted at source, self-assessment tax, etc.) that apply to all.