ITR-1 and ITR-4 will continue for individual taxpayers but CBDT has sought suggestions from all stakeholders on the proposal by December 15. At present, seven types of ITR forms are in vogue for different categories of taxpayers.
The Finance Ministry is going to give big relief to the taxpayers. The ministry has proposed to bring uniform Income Tax Return (ITR) form for all types of taxpayers. In this form, information about income from virtual digital assets can be given separately. The Central Board of Direct Taxes (CBDT) has said that all types of taxpayers except trusts and non-profit organizations will be able to file returns in the proposed uniform ITR form. The CBDT has sought suggestions from all stakeholders on this proposal by December 15. At present, seven types of ITR forms are in vogue for different categories of taxpayers.
There will be a reduction in the time taken in return filing
The CBDT said that ITR-1 and ITR-4 forms will continue, but individual taxpayers will also be able to opt for a new identical ITR form while filing returns. The board said that the purpose of this proposal is to simplify ITR filing and reduce the time taken in return filing.
In the new uniform form, taxpayers will not be required to look for income tax related schedules which are not applicable to them. Apart from this, taxpayers will also get the facility of proper matching of third party data available with the Income Tax Department. This will help in reducing the compliance burden on the taxpayers.
Which ITR form for whom now?
ITR-1 (Sahaj) and ITR-4 (Sugam) are common ITR forms. Most of the small and medium taxpayers file ITR through these forms. Taxpayers with income up to Rs 50 lakh from salary, a house or interest etc. file ITR through Sahaj Form. Hindu Undivided Families and Firms with income up to Rs 50 lakh through business or profession file returns through ITR-4.
Taxpayers having income from residential property file returns through ITR-2. Those earning profits from business or profession earnings file returns through ITR-3. LLPs file returns through ITR-5 and businesses through ITR-6. Trusts file returns through ITR-7.