Key Changes in Income Tax Return Forms for A.Y. 2022-23

Key Changes in Income Tax Return Forms for A.Y. 2022-23 - An Introduction

The Central Board of Direct Taxes (CBDT) vides a Notification dated 30th March 2022 has notified the Income-tax (Fourth Amendment) Rules, 2022. With this amendment, CBDT notified five income tax return (ITR) forms for the assessment year 2022-23 for the Assessment Year (AY) 2022-23 relevant to the financial year (FY) 2021-22. The new ITR forms for the financial year 2022-23 seek details of more disclosures, including details of investment in unincorporated entities, and income from overseas retirement benefit accounts from taxpayers.The CBDT has well in advance notified the Income-tax Return (ITR) Forms for the AY 2022-23 vide Notification No. 21/2022 dated 30-03-2022 & Notification No. 23/2022 dated 01-04-2022. There are various changes in the disclosure requirements in the new ITR Forms.CBDT has so far notified the new ITR forms, from ITR Form 1 to ITR Form 7. Largely all the ITR forms have been kept unchanged from the last year, except few small changes. This timely notification will provide enough time for assesses to collate the information required to be disclosed for the year starting April 1. This also ensures that tax authorities have enough time to develop utility for the ITR forms, ensuring no last-minute glitches.Income of FY 2021-22 will be accessed in AY 2022-23.All ITR forms will seek additional information with regard to overseas retirement benefits and interest accrual on provident fund deposits exceeding 2.5 lakh a year.

Amendment in Rule 12 - Manner of filing ITR

There is no change in the manner of filing ITR Forms as compared to last year. CBDT has amended Rule 12 of the Income Tax Rules, 1962 to incorporate the changes related to ITR forms for the AY 2022-23.Rule 12 of Income Tax Rules, 1962 prescribes the manner of filing the income tax return in ITR. The following amendments are notified for the ITR forms ITR-1 to ITR-6 for the AY 2022-23

  • In Rule 12(1), the year '2022' is replaced for the figure '2021' to make the changes applicable for AY 2022-23.
  • In Rule 12(5), the year '2021' is replaced for the figure '2020' to make the ITR forms applicable for the AY 2021-22 or earlier assessment years which were notified for respective years.
  • This amended rule shall come into force with effect from the 1st day of April 2022.
  • New ITR Forms SAHAJ ITR-1, ITR-2, ITR-3, SUGAM ITR-4, ITR-5, ITR-6, and ITR-V have been substituted for the AY 2022-23.

Though ITR forms for the AY are notified, no utility on the e-filing portal is yet given for the online filing of the return.

Accounting for crypto-currency tax

In the budget 2022, finance minister introduced TDS on digital currency transactions and adequate changes where expected in ITR for reporting of the same.However, "the forms do not mention about taxation for crypto-currencies at all. Hence, there is still ambiguity about how the incomes from cryptos shall be reported for FY 2021-22

These additional disclosure requirements would result in more comprehensive disclosure in the income tax return forms leading to reduced instances of scrutiny cases.

Income Tax Return (ITR) is a form in which the taxpayers file information about their income earned and tax applicable to the income tax department.The department has notified 7 various forms i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 & ITR 7 to date. Every taxpayer should file his ITR on or before the specified due date. The applicability of ITR forms varies depending on the sources of income of the taxpayer, the amount of the income earned, and the category of the taxpayer like individuals, HUF, company, etc.