Barring one category, all income-tax payers will soon get a common return form, as Central Board of Direct Taxes (CBDT) has released draft common income-tax return and invited suggestions from stakeholders.

Suggestions can be submitted by December 15, following which the Income-Tax Department will finalise the common form and notify it. Normally, new forms are notified just before April 1.

Common ITR

CBDT proposes to introduce a common ITR by merging all the existing returns of income except ITR-7. However, “the current ITR-1 and ITR-4 will continue. This will give an option to such taxpayers to file the return either in the existing form (ITR-1 or ITR-4) or the proposed common ITR, at their convenience,” the board said.

At present, there are seven ITR forms. For example, ITR-1 SAHAJ is for resident individuals having total income up to ₹50 lakh, having income from salaries, one house property, other sources (Interest etc.), and agricultural income up to ₹5,000 ITR-4 Sugam is for Individuals, HUFs (Hindu Undivided Families) and firms (other than LLP) being a resident having total income up to Rs.50 lakh and having income from business and profession. Then there is ITR-7 for political parties, fund or institution or university or other educational institution or any hospital or other medical institution, beside others.

The board acknowledged that the current ITRs are in the form of designated forms wherein the taxpayer is mandatorily required to go through all the schedules, irrespective of the fact whether that particular schedule is applicable or not. This increases the time taken to file the ITRs and in turn may create avoidable difficulties for taxpayers.

Keeping these in mind, the board said 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. 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 a vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers,” the board said.

It mentioned that the taxpayer is required to answer questions which apply to him and fill 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 ease of compliance, the board claimed.

It also said that 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 customised ITR containing only the applicable questions and schedules will be available to the taxpayer.

Scheme of Proposed Common ITR

-         Basic information, schedules for computation of total income, for computation of tax and for the tax payments along with details of bank accounts, applicable for all the taxpayers.

-         Customised for the taxpayers with applicable schedules based on certain questions answered by the taxpayers

-         Questions 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.

-         Form designed in such a manner that each row contains one distinct value only. This will simplify the return filing process. 

-         Utility for the ITR to be rolled out in such a manner that only applicable field of the schedule will be visible For example, in the case of more than one house property, the schedule HP will be repeated for each property.

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