The Central Board of Direct Taxes (CBDT) has proposed a single income tax return (ITR) form for all taxpayers. A draft form has been released, to which all stakeholders can provide inputs up to December 15.

 

Background

Currently, there are seven kinds of Income Tax Return (ITR) forms which are used by different categories of taxpayers.

 

How many ITR forms were filed in AY 2022-23?

  • The total ITR forms filed for AY 22-23 is about 83 crore.
  • Out of 5.83 crore ITRs filed, 50% of these are ITR-1 (2.93 crore), 11.5% are ITR-2 (67 lakh), 10.9% are ITR-3 (63.35 lakh), 26% are ITR-4 (1.54 crore), ITR-5 to 7 (5.5 lakh)

 

Proposal made by CBDT

  • According to the proposal, all taxpayers, barring trusts and non-profit organisations, will be able to use a common ITR form.
  • This common ITR form will include a separate head for disclosure of income from virtual digital assets.

 

What is the need for a common ITR Form?

  • The proposal of having a common ITR Form is aimed at making it easier for citizens for file returns, and also to considerably reduce the time taken for the job by individuals and non-business-type taxpayers.
  • With a common ITR form, the taxpayers will not be required to see the schedules that do not apply to them.
  • It intends the smart design of schedules in a user-friendly manner with a better arrangement, logical flow, and increased scope of pre-filling.
  • It will also facilitate the proper reconciliation of third-party data available with the Income-Tax department vis-à-vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers.

 

About CBDT –

  • It is a statutory body established as per the Central Board of Revenue Act, 1963.
  • It is India’s official financial action task force unit.
  • It is administered by the Department of Revenue under the Ministry of Finance.
  • It deals with the levying and collection of direct taxes. It also has auditing and investigative powers.
  • The members of the CBDT are drawn from the Indian Revenue Services.