The government has notified the new income tax return (ITR) forms through a notification for the assessment year 2022-23. There are no major changes in the ITR forms.
“As per the Income-tax Act provisions, the last date to file ITR by the taxpayers (tax audit not applicable) for FY 2021-22 is July 31, 2022. For other taxpayers to whom audit is applicable, the return filing due date is October 31, 2022. If the taxpayer has entered into a specified domestic or international transaction, the return filing due date is November 30, 2022,” says Archit Gupta, founder and CEO, Cleartax, a tax portal.
That said, some significant changes have been incorporated in the ITR forms in line with the amendment in Finance Act, 2022, which taxpayers should keep in mind while filing their returns.
Income from retirement benefits abroad
Form ITR-1 seeks details on income from retirement benefits accounts in a foreign country. In Budget 2021, the finance minister had proposed to notify rules for removing hardship for non-resident Indians (NRIs) from double taxation on money accrued in foreign retirement accounts. The Central Board of Direct Taxes (CBDT) had, accordingly, in a notification released on April 4, 2022 included Canada, the US, and the UK as the countries under Section 89A in this list.
“The ITR-1 form seeks details of retirement benefit accounts maintained in a notified country under section 89A of the Income-tax Act, which should be included in the net salary. It also seeks income details from retirement benefits accounts maintained in other foreign countries. The taxpayers need to mention the relief amount to be reduced from the taxation under the said section,” says Gupta.
Interest on PF contribution above Rs 2.5 lakh
In ITR-2 and ITR-3, the taxpayers have to mention the interest accrued on the amount of contribution to taxable provident fund account under “Schedule OS- Income from Other Sources.”
Reporting of tax-deferred on ESOPS
A schedule named ‘Schedule: Tax-Deferred on ESOP’ has been inserted in ITR-2 and ITR-3. A separate disclosure of ESOPS provided by the eligible start-ups is required, since the event of taxation is deferred to the point of sale. The new schedule will capture the details related to such deferment.
Additional disclosures for new tax regime
In ITR-3 and ITR-4, the taxpayers must disclose whether they had opted for the new tax regime under Section 115BAC, and whether Form 10-IE was filed in FY 2020-21. In addition, the taxpayers can choose to opt, or not opt to continue, or even opt out of the new tax regime for FY 2021-22.
Additional disclosures for capital gains
In ITR-2, ITR-3, ITR-5, and ITR-6, the taxpayer must provide additional disclosures related to capital gains transactions.
“The disclosure requirement includes year-wise details of the improvement cost if the taxpayer has incurred such cost in different financial years, and separate disclosure of the acquisition cost and indexed acquisition cost,” adds Gupta.
These are a few important changes made in the ITR forms for FY 2021-22. The taxpayers should note these changes and accordingly provide necessary information while filing their income tax return.