CBDT Proposes Common ITR Form For Taxpayers To Simplify Filing

In a bid to improve taxpayers' experience and reduce the time taken to file income tax returns (ITR), the Central Board of Direct Taxes (CBDT) has released the draft Common ITR form by merging all the existing returns of income except ITR-7.

The new common ITR form would be available in parallel to old forms in ITR-1 and ITR-4, with the option for the assessees under these two ITRs to choose to file the old forms or the new one.

At present, the taxpayers are required to furnish their income tax returns in ITR-1 to ITR-7 depending upon the category. 

All taxpayers, except trusts and non-profit organisations, will be able to file returns with the proposed new common ITR form after it is notified.

The CBDT has invited stakeholder comments on the Draft ITR form by 15 December.

"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, which increases the time taken to file the ITRs," the Finance Ministry said in a statement on Monday (1 November).

"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," the ministry said.

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 ministry added.

According to the ministry, the scheme of the proposed common ITR form is as follows:

1. Basic information (comprising parts A to E), Schedule for computation of total income (Schedule TI), Schedule for computation of tax (schedule TTI), Details of bank accounts, and a schedule for the tax payments (schedule TXP) is applicable for all taxpayers.

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

3. 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 the taxpayer.

4. Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules.

5. The proposed ITR has been designed in such a manner that each row contains one distinct value only. This will simplify the return filing process. 

6. The utility for the ITR will be rolled out in such a manner that only applicable fields of the schedule will be visible and wherever necessary, the set of fields will appear more than once.