INCOME TAX DEPARTMENT NOTIFIES NEW ITR FORMS FOR FY 2021-22

Attention taxpayers! The Income Tax department on Friday i.e.; on April 1, 2022, announced new forms for filing Income Tax returns (ITR) for the financial year 2022-23.  No major changes in the ITR forms can be seen in general. In accordance with the provisions of the Income Tax, Act, the deadline date to file ITR by the taxpayers (tax audit not applicable) for FY 2021-22 is 31st July 2022. And for other taxpayers to whom audit is applicable, the last return filing due date is 31st October 2022. If a taxpayer has entered a specified domestic or international transaction, the deadline for return filing due date is 30th November 2022.

It is noted that the ITR forms 1-5 have been notified by the Central Board of Direct Taxes (CBDT). The new ITR forms for the financial year 2022-23 require details of income from overseas retirement benefit accounts from taxpayers.

Let us have a look at some of the notable changes introduced in the ITR forms in line with the amendments in the Finance Act, 2022:

•    The Form ITR-1 seeks information on income from retirement benefits accounts in a foreign country:

In the 2021 budget, FM proposes to introduce rules & laws for alleviating hardships for NRI because of double taxation on money accrued in foreign retirement accounts. The CBDT has notified ‘Canada’, ‘United States of America’, and ‘United Kingdom of Great Britain & Northern Ireland’ countries for Section 89A in a notification issued on 4th April 2022. The form ITR-1 requires details of retirement benefit accounts that are maintained in a country notified under section 89A of the Income Tax Act, which should be included in the net salary. It also seeks out details of income from retirement benefit accounts maintained in other foreign countries. The taxpayers need to specify the relief amount to be reduced from the taxation under the specified section.

•    Interest accrued on PF contribution in excess of Rs 2.5 lakh:

In the form ITR-2 and ITR-3, the taxpayers must specify the interest accrued on the donated amount to the taxable provident fund account under the ”Schedule OS- Income from Other Sources”.

•    Reporting of tax deductions on ESOPS:

A schedule named ‘Schedule: Tax-Deferred on ESOP’ is included in ITR-2 and ITR-3. A separate disclosure of ESOPS provided by the qualified start-ups is required as the event of taxation is deferred to the point of sale. The new schedule will memorize the details which are related to such deferment.

•    Additional disclosures for the new tax regime opted:

In ITR-3 and ITR-4, the taxpayers must expose whether they have opted for a new tax regime under Section 115BAC, and Form 10-IE was filed in FY 2020-21. Plus, the taxpayers can now choose to opt, opt-out, continue, or opt out of the new tax regime for FY 2021-22.

•    Additional disclosures for capital gains:

In the forms ITR-2, ITR-3, ITR-5, and ITR-6, the taxpayer must provide additional disclosures related to the transaction of capital gain. The disclosure requirement includes annual details of the development cost if the taxpayer has incurred such cost in varied financial years as well as separate disclosure of the acquisition cost and indexed acquisition cost.

These are a few important changes made in the ITR forms of FY 2021-22. The taxpayers should note these ITR changes and provide necessary information while filing the income tax return.

New Income Tax rules from April 1:

As of April 1 marks the beginning of the new financial year, a number of rules relating to the Income Tax are set to change from today. This year, numerous changes such as crypto tax, revised TDS rates, and TCS rates, ITR filing rules have become applicable. In addition, the Centre from today will also relax the provisions under Section 80DD which offers tax breaks for differently-abled people.

Author:

Priya Goel
Delhi
Graduate in B.A LLB (Hons) from GGSIP University