CBDT Issues Draft common Income-tax Return-request for inputs from stakeholders and the general public

The Central Board of Direct Taxes (CBDT) has issued the draft common income-tax return request for inputs from stakeholders and the general public.

Depending on the type of person and the nature of their income, taxpayers are currently required to file income tax returns on ITR-1 through ITR-7. The current ITRs are in the form of designated forms, and the taxpayer is required to go through all of the schedules, regardless of whether or not that particular schedule is applicable. This lengthens the time it takes to file ITRs, potentially causing avoidable problems for taxpayers.

The new draft of ITR reexamines the return filing system in light of international best practices. It proposes to create a single ITR by combining all existing income tax returns except ITR-7. It proposes to create a single ITR by combining all existing income tax returns except ITR-7. This will give taxpayers an option to file the return either on the existing form (ITR-1 or ITR-4) or the proposed common ITR, at their convenience.

The draft ITR aims to bring ease of filing returns and reduce the time for filing the ITR by individuals and non-business-type taxpayers considerably. 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 a vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers.

The ITR is customized for the taxpayers with applicable schedules based on certain questions answered by the taxpayers (wizard questions).

The questions have been designed in such a manner and order that if the answer to any question is "no", the other questions linked to this question will not be shown to him.

"The taxpayer is required to answer questions which apply to him and fill in the schedules linked to those questions where the answer has been given as' yes'." As a result, the time and energy of the taxpayer will be saved, and he will be relieved of the additional burden of going through all the parts of the ITR as is the requirement under the existing ITRs. This will increase the ease of compliance," the CBDT stated.

Once the common ITR Form is notified, after taking into account the inputs received from stakeholders, the online utility will be released by the Income-tax Department. In such a utility, a customized ITR containing only the applicable questions and schedules will be available to the taxpayer.

By December 15th, 2022, inputs on the draught ITR should be sent electronically to dirtpl4@nic.in, with a copy to dirtpl1@nic.in.

F No 370133/16/2022-TPL

Dated: 01.11.2022

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