Income tax

Common income tax return form (RTI): will the CBDT proposal simplify the work of taxpayers?

Income tax declaration: In order to facilitate the task of taxpayers, the Central Direct Tax Board (DBDT) has proposed an income declaration form (RTI) common to all taxpayers. The CBDT proposed to merge all ITR forms except Form-7. Currently, taxpayers are required to file their tax returns in ITR-1 to ITR-7 depending on the type of person and the nature of the income. Current ITRs come in the form of designated forms where the taxpayer is required to go through all schedules, regardless of whether that particular schedule is applicable or not, which increases the time required to file ITRs.

On common ITR form proposal, the CBDT said: “The proposed RTI draft reviews the tax filing system in tandem with international best practice. It proposes to introduce a common RTI by merging all existing tax returns except the RTI -7.However, the current IRR-1 and IRR-4 will be maintained.This will give these taxpayers the option of filing the return either under the existing form (RTI-1 or RTI-4) or according to the ITR common proposed, at their convenience.

The outline of the proposed common RTI form is as follows:

(a) Basic information (including parts A to E), annex for calculation of total income (annex TI), annex for calculation of tax (annex TTI), details of bank accounts and annex for tax payments tax (Annex TXP) is applicable to all taxpayers.

(b) The ITR is customized for taxpayers with applicable schedules based on certain questions that taxpayers have answered (wizard questions).

(c) The questions have been designed in such a manner and in order that if the answer to a question is “no”, the other questions related to that question will not be presented to the taxpayer.

(d) Instructions have been added to facilitate the filing of the declaration containing the instructions concerning the applicable schedules.

(e) The proposed RTI has been designed so that each line contains only one distinct value. This will simplify the reporting process.

(f) The ITR Utility will be deployed in such a way that only the applicable fields of the schedule are visible and, if necessary, the set of fields will appear more than once.

See the CBDT tweet below:

Will this make it easier for taxpayers? Alok Agrawal, Partner at Deloitte India, said: “The government has made it easier for taxpayers by automatically entering certain relevant details in the ITR. the filing process will be fully known once the utility is released by the ministry. Another measure that can help taxpayers is to simplify the text of disclosure requirements on ITR forms, for example by using examples that can be understood by laypersons who do not understand various section number references. »

Vinit Khandare, CEO and Founder of MyFundBazaar, said, “In an effort to seamlessly reduce the time for filing returns by individuals and taxpayers, ITR provides smart design schedules in a user-friendly manner with efficient arrangement and logical flow. With a relevant questionnaire, the information provided by the taxpayer would be more concise and accurate, allowing the taxpayer to analyze the details shared with tax department records to ensure credibility. Ultimately, CBDT intends to facilitate filing, reducing unnecessary data with the proposed common ITR – considering an efficient automated tax return process. Common ITR Form: Key Features of the CBDT Proposal Highlighting the key features of the Common ITR Form, Archit Gupta, Founder and CEO of Clear, listed the following:

1]Disclosure of income related to virtual digital assets as business income and tax thereon;

2]Determination of residency tax status in detail;

3]Determination of the applicability of the tax audit in details; and

4]Detailed disclosure of transmitted income.

However, the taxpayer should be careful when answering the question that will customize the ITR utility, as incorrect answers may disable certain schedules that may apply to them.

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