The CBDT has well in advance notified the Income-tax Return (ITR) Forms for the AY 2022-23 vide Notification No. 21/2022 dated 30-03-2022 & Notification No. 23/2022 dated 01-04-2022. There are various changes in the disclosure requirements in the new ITR Forms. Let us have a look at some of the key changes in the ITR that may be relevant to most taxpayers.
1. Applicability of ITR Forms:
The new ITR forms do not tinker with the applicability of ITR forms. The criteria for selecting the ITR forms for the AY 2022-23 shall be the same as that of the AY 2021-22.
2. Schedule of Capital Gain:
New ITR forms require the following additional disclosures in the Schedule of Capital Gain:
(a) Date of purchase & sale of Land/Building (b) Country and Zip Code if the property is situated in a foreign country (c) Disclosure of FMV & consideration received in slump sale transaction (d) Year-wise details of the cost of improvement to land/building (e) Separate disclosure of cost & indexed cost of acquisition
Further, new ITR 5 has been suitably amended for disclosure of deduction allowable u/s 48(iii) in respect of the capital gains of firm u/s 45(4).
3. Disclosure of the taxable EPF interest:
FA-2021 has amended Sections 10(11) and 10(12) to provide that no exemption shall be allowed in respect of interest income from the recognized and statutory provident fund to the extent it relates to the amount of the contribution made by the employee exceeding Rs. 2,50,000 in any year on or after 01-04-2021. The new ITR forms have amended “Schedule OS” (Other Sources) to incorporate specific reporting of such interest income.
4. Change in “Schedule FA” (i.e., Foreign Assets):
Schedule FA requires the reporting of foreign assets. The new ITR Forms have replaced the expression “Accounting Period” with “Calendar Year ending as on 31st December 2021”. As a result, the taxpayers shall be required to furnish the details of all foreign assets held between 01-01-2021 and 31-12-2021 in return to be filed for AY 2022-23.
5. Taxation of ESOP:
New Schedule has been inserted for reporting of tax-deferred on ESOP whereby an employee can defer the payment or deduction of tax in respect of shares allotted under ESOP (Specified Securities) by an eligible start-up referred U/s 80-IAC. The New ITR Forms have inserted a “Schedule: Tax-Deferred on ESOP” to keep a proper track of such transactions.
6. Nature of employment of pensioner:
In earlier ITR forms, an individual receiving a pension was just required to choose the option of ‘Pensioners’ in the dropdown menu ‘Nature of Employment. Now, the following options have been further incorporated for pensioners (i) Pensioners–CG (ii) Pensioners–SC (iii)Pensioners–PSU, and (iv) Pensioners–Others.
7. Taxpayers who have opted for alternative tax regime U/s 115BAC:
Now, taxpayers have an option of a new tax regime of lower tax without any deduction or exemption. The following disclosures are required in ITR 3 and ITR 4:
(a) Whether the assessee has opted for an alternative tax regime, u/s 115BAC & filed Form 10-IE in AY 2021-22;
(b) For the AY 2022-23, the assessee has to choose from the following options:
· Opting in now
· Not opting
· Continue to opt
8. Taxpayers who have opted for alternative tax regime U/s 115BA/115BAA/ 115BAB/ 115BAD:
All taxpayers who have opted for an alternative lower tax regime are now required to give the details of the year wherein the option was first exercised as well as the details of having filed the prescribed form (like Form No. 10IB, 10 IC etc). Similarly, if the taxpayer is continuing the option, then the details of filing such a prescribed form in an earlier year are also required to be given.
9. Disclosure for a person not opting for audit u/s 44AB:
Audit u/s 44AB is not mandatory for taxpayers with turnover between Rs. 1 crore to 10 Cr if the cash receipt and cash payment do not exceed 5%. Now, for the purpose of computing the limit of 5%, payment or receipt by cheque drawn on a bank or by a bank draft, which is not an account payee, shall be deemed to be the payment or receipt in cash only [FA-2021]. The old ITR Forms required the assessee to furnish the response regarding cash receipts and payments only. Now, the following additional disclosures are required regarding Audit Information:
(a) Whether total sales, turnover or gross receipt is between Rs. 1 Cr & Rs. 10 Cr? If not, is it below Rs. 1 Cr or exceeds Rs. 10 Cr?
(b) The new ITR forms require aggregation of receipts and payment in cash and non-account payee cheque or DD while computing the limit of 5% as mentioned above.
10. Residential Status:
In the new ITR, it is now mandatory to choose the suitable option in support of residential status in India. Few more options have been added to the ITR forms so as to ascertain the exact nature of the residential status of the taxpayers.
11. Disclosure of Deemed Dividend Separately:
Until last year, there was no separate disclosure of dividend income taxable u/s 2(22)(e) i.e., Deemed Dividend. Now, in the new ITR forms, dividend income taxable u/s 2(22)(e) has to be reported separately.
12. Capping the surcharge on dividend income:
In the case of individuals, HUF, AOP, BOI, or AJP, the surcharge on tax on dividend income is attracted @ 10% if it exceeds Rs. 50 lakh but does not exceed Rs. 1 Cr and @ 15% if it exceeds Rs. 1 crore. The consequential change has been done in Schedule Part B–TTI (Computation of tax liability on total income).
13. Exempt Income Disclosure:
The New ITR Form now requires disclosure of exempt income u/s 10(23FB), 10(23FBA), 10(23FC)/10(23FCA), etc. Earlier there was no need to make specific disclosure of the applicable section.
14. Disclosures in respect of Significant Economic Presence:
In the new ITR forms, the non-resident has to confirm if there is a Significant Economic Presence (SEP) in India or not. If there is a SEP in India, the details of the transactions & users are to be incorporated into the ITR Form.
The information in the database of the income tax department has increased drastically and so are the reporting requirements of the reporting in the ITR forms. Artificial intelligence is going to play a vital role in tax administration. Taxpayers need to be all the more careful and cautious while filing their income tax returns.