The Income Tax Department has released the ITR Forms for AY 2022-23…and also…wait for it…enabled e-filing for ITR 1 (for salaried Individuals) and ITR 4 (for presumptive taxation scheme), all within just two weeks into the New Financial Year!
The ITD had launched the New Income Tax Portal on 7th June 2021. However, the portal faced a few hiccups in the initial few months because of that & covid, the ITD had extended the ITR filing due dates for FY 2020-21.
But, with ITD releasing ITR Forms, and enabling e-filing early on, this year seems to be like a different story altogether.
In the beginning of every Financial Year, the ITD releases New ITR Forms for the upcoming tax season. So, what has changed since the last year? Let’s take a look.
Largely, ITR Forms have been kept pretty much the same except for some changes:
Reporting Capital Gains
Taxpayers reporting their capital gains while filing ITR 2 (For Capital Gains) & ITR 3 ( For Business & Profession )will have to furnish a few additional details from this year, such as ;
- Date of purchase and selling of land or building.
- Details of year-wise improvement cost, if the taxpayer has sold any land or building.
- The original & indexed cost of acquisition if the taxpayer has sold any capital asset.
Details about the New Tax Regime
Filing ITR 3 (For Business & Profession) or ITR 4 ( For Presumptive Taxation Scheme)? Well, you need to disclose the following details about the New Tax Regime while filing your return.
- Whether you had opted for New Tax Regime in AY 2021-22 and filed Form 10IE. It is essentially a Form that you need to file if you want to opt for the New Tax Regime.
- If you want to opt-in, not opt in, opt-out or continue with the New Tax Regime for AY 2022-23
However, if you have business income, you cannot choose between the new and old tax regime every year. Once you have opted for the new tax regime, you only have a one-time option of switching back to the old tax regime. Once you switch back, you cannot opt for New Tax Regime again.
Reporting Interest earned from Provident Fund
If you have been depositing more than INR 2.5 lakh in your EPF or VPF account, we have some news for you.
Starting 1st April 2021, interest earned on EPF and VPF will be taxable if yearly contribution exceeds
- INR 2.5 lakh for Non-Government employees
- INR 5 lakh for Government employees
So, if you have been depositing some big bucks in your EPF or VPF account, make sure to report the interest earned from it under the head “Income from Other Sources“. Chances are that the interest earned will be reflected in your Form 26AS and AIS.
Reporting Foreign Assets & Income earned from Overseas Pension Account
While filing ITR, a resident taxpayer needs to report Foreign Assets in Schedule FA if the assets were held at any time during the relevant “accounting period”.
However, the term “accounting period” was not defined properly leading to some confusion among taxpayers.
The New ITR forms have put an end to that confusion by replacing the term “accounting period” with “calendar year ending as on December 31, 2021”. So if a taxpayer has held any foreign assets between 1st January 2021 and 31st December 2021, they will have to report that while filing ITR.
Income earned from overseas pension Account
Talking about Foreign Assets, another change has been introduced in ITR Forms with regards to foreign pension accounts.
Now, an NRI can have a pension account in the country they are residing in and that will not be taxable in India. However, when the NRI becomes a Resident, the income from that same pension account becomes taxable in India. But, it may so happen that the taxpayer has already paid tax on such income in the foreign country. In that case, they are eligible to claim tax credit u/s 89A and the same needs to be reported while ITR.
Now, with ITD releasing the ITR Forms and enabling e-filing for AY 2022-23, many taxpayers may want to file their ITR early on. While this is a good idea, some experts have opined that it might be wise to wait till June 2022 to file ITR. This is because the due date to file TDS Returns is 31st May 2022. If you have had your TDS deducted, your Form 26As will only be updated after your deductor has filed the TDS returns. So you might want to consider waiting till your Form 26AS before filing your ITR.
Were you expecting any other changes in the ITR Forms? Share your thoughts with us