27 important changes in the new ITR form | 2023-24 (2023)

Table of contents

1.Forms that taxpayers must use when filing their income tax returns for the 2023-24 assessment year

2.If a refund is filed for deposits over Rs., the refund cannot be filed in ITR-1. Current account 1 crore rupees

3.The Busy checkbox was omitted from the company's HP plan

4.New form of income from the transfer of virtual digital assets

5.Exclusion of taxable dividend income in accordance with Section 115BBD of Schedule OS

6.Turnover from day trading must be reported separately under Part A - Trading Accounts

7.FII/FPI must provide the SEBI registration number

8.Include a Section 153C reference to the return submitted in response to the notification

9.Provide the ARN (donation reference number) if the donation qualifies for Section 80G deduction

10.

11.Transfer TCS points to someone else

12.Disclosure of Section 89A income for the prior year

13.Disclosure of information when the assessed subject opts out of the alternative tax regime under Section 115BAC

14.Additional disclosure requirements for companies when changing partnerships

15.Disclosure of "advance payments" in the balance sheet

16.Calculation of income in accordance with Section 10(23C) or Section 13(10) 22, as applicable

17.Author/Founder/Trustee/Manager details

18.Disclosure of accumulated tax income from previous years

19.Specific investment details

20.Reports on investments by Section 10(23C) accredited bodies on relevant topics

21.Investment details are shown on the balance sheet

22.corpus harmonization

23.Disclosure of Anonymous Donations

24.Enter the amount of the subject of the application

25.Section 10(23C) Approved Entities Reporting Cumulative Earnings

26.Section 115BBI Disclosure of Taxable Income

27.Details on the approval of the Electoral Commission of India

Taxman Advisory and Research Team (Income Tax)

CBDT has published a new income tax return (ITR) for the 2023-24 tax yearlookCommunication No. 04/2023 of February 10, 2022; Communication No. 05/2022 of February 14, 2023.

The CBDT said there had been no major changes to the ITR form compared to last year, in the interest of taxpayers and to simplify filing. Only the minimal changes required by the Income Tax Act Amendment Act 1961 have been made.

The applicability of the ITR forms to different taxpayers remains unchanged and small taxpayers can continue to use the simplified ITR forms (ITR 1 and ITR 4) without additional conditions. However, if an individual is not required to file but is required to do so because the deposit exceeds Rs., the ITR-1 cannot be filed. 1 crore rupees in one or more checking accounts.

We have performed a comprehensive analysis of the new ITR Forms (ITR 1 to 7) and have highlighted any significant changes and new requirements in the current ITR Forms (i.e. last year's ITR Forms).

These changes are explained below:

1. Form to be used by taxpayers when filing their income tax returns for the 2023-24 tax year

(read more:income returnat Taxmann.com/Praxis)

2. If a refund is filed for deposits greater than Rs., the refund cannot be filed in ITR-1. Current account 1 crore rupees

[ITR 1]

TheArticle 7 ReservationSection 139 states that any person who is not required to file a tax return must file an income statement if in the preceding year:

(A)He deposited more than Rs. 1 crore rupees in one or more current accounts opened with a bank or partner bank;

(two)His losses exceeded Rs. 2 lakh rupees spending to travel abroad for himself or someone else;

(C)His losses exceeded Rs. 100,000 on utility bills; or

(Four)It satisfies any other conditions that may be required.

If any of the above situations apply to an individual, they must file a tax return, regardless of whether they are not required to file an income return. Depending on the nature of their income, tax returns can be filed using ITR Forms 1 through 4.

However, individuals who deposit more than Rs. can file their tax return on the ITR-1 form. For the year of assessment 2023-24, 1 crore of rupees has been debited from one or more current accounts.

3. Omit the Busy check box in the corporate HP plan

[ITR 6]

Businesses cannot declare property as owner occupancy as the term 'own occupancy' refers to property owned and occupied by an individual and not a business. The Schedule HP provided under ITR-6 has a checkbox to declare the property as Owned Occupied which is illogical. As a result, the reference to owner-occupied property in the HP plan has been removed from the new ITR-6 reported for the 2023–24 tax year.

4. New table of income from the transfer of virtual digital assets

[ITR 2, 3, 5, 6 and 7]

Virtual Digital Assets (VDA) includes cryptocurrency assets, non-fungible tokens (NFT) and all other digital assets, but excludes Indian currencies, CBDC, foreign currencies and reported digital assets. The Finance Act 2022 introduces a new 'flat rate' regime for taxation of income from the transfer of virtual digital assets ('VDA'), effective from tax year 2023-24.

Any transfer of virtual digital assets after January 4, 2022 shall be included in the plan. In addition, Section 194S requires tax to be deducted from the payment of consideration for the assignment of the VDA.

A Schedule VDA has been added to make the necessary changes to the new ITR form.

The schedule requires details such as the date of purchase, the date of transfer after which the income will be taxed, the acquisition cost in the case of a gift, and the consideration received.

Taxable income is recorded in Schedule CG (capital gains) or Schedule BP (business income) according to income classification under the heading “Capital gains” or “Business income”.

(read more:Taxation of Virtual Digital Assets (VDA). at Taxmann.com/Praxis)

5. Exclusion of taxable dividend income under Section 115BBD of Schedule OS

[ITR-6]

Section 115BBD provides that if a domestic company receives dividends from a foreign company and the domestic company owns 26% or more of the shares, the dividend income will be taxed at a special rate of 15%.addSurcharges and Surcharges.

With effect from year of assessment 2021-22, the Finance Act 2020 abolished dividend distribution tax under Section 115-O, making dividends in the hands of shareholders taxable at the applicable rate plus surcharges and taxes.

Harmonize the tax treatment of dividends received by Indian companies from certain foreign companiesrelativelyFor domestic companies, the Finance Act 2022 amends Section 115BBD so that the provisions of that section no longer apply from the year of assessment 2023-24.

ITR-6 has been amended, mutatis mutandis, to remove references to Section 115BBD taxable dividend income from the Schedule to the OS.

6. Turnover from intraday transactions should be reported separately under Part A - Trading Accounts

[ITR 3 and 5]

Profits or losses from day trading are speculative transactions and are always subject to tax liability under "Profit and profit from commercial or professional activity". "Speculative Transaction" means a transaction for the periodic or final settlement of a contract for the purchase or sale of any commodity, including stocks and shares, by means other than the physical delivery or transfer of the commodity or stock

The new ITR form has been modified to allow separate disclosure of intraday trading information in Part A - Trading Accounts. The ITR form requires reviewers engaged in day trading to provide the following two additional pieces of information:

(A)the volume of intraday trading; and

(two)Income from intraday trading – carried over to the profit and loss account.

(read more:speculative businessat Taxmann.com/Praxis)

7. FII/FPI must provide the SEBI registration number

[ITR 2, 3 and 5]

In previous ITR forms, it was not required for FII (Foreign Institutional Investor) or FPI (Foreign Portfolio Investor) to provide their SEBI (Securities and Exchange Board of India) registration number.

For reasons of transparency and accountability, SEBI registration numbers will be assigned to FIIs and FPIs in the new ITR form. Part A – General Information has been revised to include provisions on the provision of this information.

8. Include a Section 153C reference in the statements filed in response to the notification

[ITR 1 bis 7]

Section 153C states that if the AO is satisfied that any confiscated (or confiscated) property of value belongs to another person, then any confiscated (or confiscated) books or documents belong to that other person, or that any information contained therein relates to that other person Another person's income is estimated. Person (not the person who initiated the search or requisition process).

The Finance Act 2021 introduces a sunset clause with effect from 1 April 2021 which provides that the assessment procedure described above will not apply to search or compulsory purchase proceedings commenced on or after 1 April 2021.

If the search process was initiated before January 4, 2021, the other person may not have been assessed under Section 153C and that person will be required to file an income tax return in accordance with the Section 153C Notice. Therefore, the new ITR form restores the "153C" checkbox in the "Declaration Status" section of the income statement as reported. Previously, the checkbox was removed from the ITR form for fiscal year 2022-23.

9. If the donation is eligible for a Section 80G deduction, provide the ARN (donation reference number).

[ITR 2, 3, 5 and 6]

Any taxpayer making a payment by donation is entitled to a deduction under Section 80G of 50% to 100% of the amount donated. Certain donations are deductible, subject to permitted limits.

A new column has been added to the new ITR form to provide the ARN (Donation Reference Number) in the case of donations to organizations that are eligible for a 50% deduction if they meet the qualifying threshold.

10. Corresponding change due to expiry date of Section 80-IB deduction for industrial establishments in Jammu and Kashmir or Ladakh

[ITR 3 and 6]

Article 80-IB provides for the deduction of certain percentages of the profits and revenues generated by industrial companies located in certain areas. A company may claim a deduction under this provision for up to 10 years of assessment beginning with the first year of assessment in which it commenced operations.

An industrial company in Jammu and Kashmir has until March 31, 2012 to start operations. Because the 10-year period for such entities to claim a Section 80-IB deduction expired on March 31, 2022, such entities will no longer be entitled to such a deduction for fiscal year 2022-23.

Therefore, any reference to Section 80-IB deduction for industrial companies located in Jammu and Kashmir or Ladakh has been removed from the new ITR form.

Similar changes have been made for companies conducting scientific research under Article 80-IB.

11. Transferring TCS Points to Another Person

[ITR 2, 3, 5, 6 and 7]

All citizens residing in Goa and subject to the Portuguese Civil Code 1860 are subject to community of property. Under this system, a person is entitled to inherit 50% of their spouse's wealth and the resulting income is also required to be divided equally between the spouses. Under Section 5A, the Act recognizes the community of property regime for the assessment of all income other than wages.

In such cases, appraisers have difficulty establishing their TCS credit entitlement when the income added to the community pool is already subject to TCS. In other similar situations, a person is entitled to a credit for tax withheld on behalf of another person, e.g. B. in the case of an inheritance, etc.

Currently, the Income Tax Department reconciles the TCS amount disclosed in the ITR with the TCS amount reported on Form 26AS and if there is a discrepancy, the Department asks the assessor to reconcile the discrepancy. Therefore, taxpayers face difficulties in claiming the TCS credit under the above circumstances.

To solve this problem, the ITR form introduces a new column in the TCS schedule that enables CPC. Correlate the PAN, income amount, and TCS that both parties disclosed in their respective income statements. It is more convenient for the assessed person to apply for the tax deduction on behalf of another person.

12. Disclosure of Section 89A income for the prior year

[ITR 2, 3 and 4]

When a non-resident becomes a resident of India, the income accruing to his overseas retirement account is taxable in India. However, in some countries this amount is taxable upon receipt. Due to the different tax years for such pension fund income, it is difficult for taxpayers (typically non-residents returning to India permanently) to avail foreign tax credits on taxes paid on such income outside of India.

Section 89A, effective from year of assessment 2022-23, eliminates the above difficulties by providing that income received by a specific person from a specific account is taxable in the manner and year prescribed by the regulations . Appendix S to the ITR (Earnings Income Details) form requires the following details:

(A)Income from retirement savings accounts maintained in certain jurisdictions under Section 89A.

(two)Income from a retirement savings account maintained in a country that does not fall under Section 89A.

A new line has been added to the new ITR form for disclosing taxable income for the prior year and claiming Section 89A tax exemptions earlier in the prior year.

With regard to family pensions, similar disclosure must be made in Schedule OS (Income from Other Sources).

(read more: Tax deductions for income from foreign pension accountsat Taxmann.com/Praxis)

13. Disclosure of information when the subject of the assessment waives the alternative tax regime under Section 115BAC

[ITR 3 and 4]

Individuals or HUF may opt for an alternative tax regime under Section 115BAC.

If the valuer has a business or professional income, the option may only be withdrawn once exercised in the previous year other than the year in which it was exercised. Once the option is withdrawn, the beneficiary will never be entitled to exercise the option under this section unless the individual no longer has any business or professional income.

To opt out of the scheme, the Form 10-IE should be provided electronically via digital signature or electronic verification code.

The new ITR form requires information on whether the taxpayer has waived Section 115BAC in previous years. In the event of an opt-out by the taxpayer, the following information is required:

(A)the year of assessment to opt out of the described option;

(two)Date of the application; and

(C)Form 10 IE confirmation numbers.

(read more:Alternative tax regimes for individuals or HUFat Taxmann.com/Praxis)

14. Additional disclosure requirements for companies when changing partnerships

[ITR 5]

The partnership/AOP/BOI is required to disclose information in ITR-5 if there have been changes to partners or memberships in the past year. Associations and cooperative banks are obliged to provide information on the board of directors. In this regard, the following should be disclosed:

(A)Affiliate/Member Name

(two)Enrollment/Retirement

(C)Enrollment/Retirement Date

(Four)share ratio

The new ITR-5 form requires the following two additional pieces of information:

(A)Pfanne

(two)Compensation paid/to be paid upon retirement of partner (for companies)

15. Disclosure of “Prepayments” on the Balance Sheet

[ITR 3]

The Appendix to the Balance Sheet for ITR-3 has been amended to include information on 'advance payments'. The following two details are searched for:

(A)Advance payments from persons falling under Section 40A(2)(b); and

(two)advance payments from others.

16. Applicability to Income Calculationstwenty-twoTerms related to Section 10(23C) or Section 13(10)

[ITR 7]

The new ITR-7 form is intended to detail compliancetwenty centsConditionalSection 10(23C) or Section 13(10) applies. The Finance Act 2022 contains special rules for calculating income when:

(A)The Agency has not received an audit report;

(two)Books and other documents are not kept in the prescribed form/type/place; or

(C)The Agency failed to file the income statement within the time limit provided for in Section 139(4A).

Corresponding changes have also been made to the B-TI section of the ITR form, which details the Profit and Loss Account. If the gross income is taxable, a separate form is provided in Part B3twenty centsConditionalSection 10(23C) or Section 13(10).

In such a case, the taxable income resulting from the exemption being waived will be calculated after deduction of expenses (other than capital expenses) incurred in India for institutional purposes. The following conditions can be deducted:

(A)Expenditure does not reflect the amount of the Company's donations recorded on the books at the end of the previous financial year;

(two)the expenses are not from a loan or borrowing;

(C)Assets whose full cost has been claimed as income cannot be depreciated;

(Four)This payout will not take the form of a contribution or donation to anyone.

The following expenses cannot be deducted when calculating income:

(A)Capital expenditures are not deductible;

(two)Under Section 40(a)(ia), a default tax deduction is denied;

(C)Section 40A(3)/40A(3A) states that cash payments are not permitted;

(Four)Expenses incurred outside India are not deductible.

It should be noted that the deduction of the above expenses or allowances may not be used as any other deduction for the taxpayer. In addition, damage caused by these expenses cannot be offset.

(read more:Exceptions for Educational, Medical, Charitable and Religious Institutions under Section 10(23C)at Taxmann.com/Praxis)

17. Authors/Founders/Trustees/Managers Information

[ITR 7]

The new ITR-7 form requires information on the author/founder/trustee/manager of a trust or institution at any time in the previous year. So if an individual has held a position at any time in the past year, their data will be provided. Previously, this information had to be provided when the application was submitted.

18. Disclosure of accumulated tax income for previous years

[ITR 7]

A new Schedule IA has been added to require disclosure of accumulated income taxed under Section 11(3) in previous years of assessment. A trust exemption for aggregate income of more than 15% may be granted provided certain conditions are met. Section 11(3) provides that a trust's exemption from the accumulation of income is revoked if the valuer fails to meet the conditions. The new Appendix IA requires information on the year of accumulation and the year of assessment for which the accumulated amount is taxable.

Added another new Schedule DA requiring disclosure of accumulated income taxed under Section 11(1B) in prior years of assessment. If a charity is unable to spend 85% of its income in India on charitable or religious causes, it will be considered fit for those purposes after filing Form 9A.

If such income is not applied for charitable or religious purposes in India within the specified period, it is deemed to be income of the previous year immediately following the year in which it was received or derived and is taxable under Section 115BBI. This new Schedule DA must provide information on the deemed filing year and the year of assessment for which that amount is taxable.

19. Specific investment situation

[ITR 7]

Previously, details of investments made pursuant to Section 11(5) were provided in Appendix J. The form now only asks for details of the principal investments/deposits made under Section 11(5).

20. Reporting of investments by entities approved under Section 10(23C) on relevant topics

[ITR 7]

The Finance Act 2022 provides that where an entity authorized under Section 10(23C) uses the income (or any part of the income or property) of a trust or body for the benefit of a person referred to in Section 13(3), directly or indirect interest, This income or assets are the income of the fund or institution for the previous year.

The new ITR form asks for details of investments held at any time during the previous year in which the persons referred to in Section 13(3) have had an interestArticle 21 reservationThe provisions of Section 10(23C) have significant benefits.

21. Investment details disclosed in the balance sheet

[ITR 7]

The total use of funds shown in the balance sheet is further broken down into investments made in the manner prescribed in Article 11(5) and investments made in a manner other than that prescribed in Article 11(5).

22. Corps coordination

[ITR 7]

A new Appendix R has been included showing the reconciliation of the corpus and balance sheet of Appendix J. The reason for the difference between the company's closing balance as reported in Appendix J and the balance sheet closing balance should be explained.

The reason why the difference needs to be specified is as follows:

(A)purchase of fixed assets

(two)depreciation

(C)Any other reason (please specify reason)

23. Disclosure of Anonymous Donations

[ITR 7]

Details of voluntary contributions are to be given in Appendix VC. These voluntary contributions are further divided into domestic and foreign contributions, including anonymous contributions. Anonymous donations which are taxable under section 115BBC are now separately accounted for in Schedule VC.

(read more:Tax Obligations of Anonymous Donationsat Taxmann.com/Praxis)

24. Disclosure of subject-related application amount

[ITR 7]

A new Appendix A has been added to provide the amounts applicable to trusts/institutions regulated objects from all sources for the previous year. Previously, this information had to be reported in Schedule ER for income and Schedule EC for capital.

Both details are now shown in a new Appendix A and the amount is broken down by income and capital character. The schedules ER and EC have been removed from the new ITR form. The new Schedule A does not require disclosure of the amount used for formation and administrative expenses.

25. Section 10(23C) authorizes entities to report cumulative income

[ITR 7]

The Finance Act 2022 extends the provision to pay accrued tax to a Section 10(23C) approved fund or body. Previously, these provisions only applied to trusts or corporations registered under Section 12AA/12AB. Therefore, Appendix 115TD must also be completed by the Section 10(23C) approved body.

26. Disclosure of Taxable Income under Section 115BBI

[ITR 7]

A new section 115BBI has been added to the Finance Act 2022 which provides that a specific charity will be taxed at a rate of 30% if its gross income includes a specific incomeaddSurcharges and surcharges on the total amount of this declared income.

A new Schedule 115BBI has been added to report certain income for businesses taxed at special rates under Section 115BBI.

27. Information approved by the Electoral Commission of India

[ITR 7]

The LA schedule must be completed by the party. Previously, political parties were required to provide registration details under Section 29A of the People's Representation Act 1951. They are now also required to disclose whether the party has been accredited by the Electoral Commission of India and when the confirmation was made.