New Delhi: The Central Board of Direct Taxes (CBDT) has recently issued a draft proposal to introduce a common ITR form for all taxpayers. The draft proposal aims to simplify the process of filing income tax returns (ITR) for various types of taxpayers. The CBDT has suggested merging of all the existing ITR forms except ITR 7, though ITR 1 and ITR 4 will continue to remain in use.
“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,” an official statement said. (Also read: What are electoral bonds and who can purchase it? )
“The proposed draft ITR takes a relook at the return filing system in tandem with international best practices. It 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,” it said. (Also read: DA hiked by 4%, arrears to be paid in 2 equal installments by THIS state govt)
Here are 5 key points about the common ITR form that all tax payers should know
1. CBDT`s proposal, taxpayers will have choice to choose the form for filing returns.
2. They could either choose from the proposed common ITR form or the existing ITR 1 or ITR 4 forms.
3. The current ITR-1 and ITR-4 will continue
4. While the CBDT draft proposes to introduce a common ITR by merging all the existing returns of income, but ITR-7 will not be merged.
5. As of now, returns are filed through ITR 1 to 7, depending on the nature of the income and the legal classification of the taxpayer.