Know the Big changes in ITR Forms before you start filing return for AY 2022-23

The process of Income Tax Return (ITR) filing for the Assessment Year (AY) 2022-23 has been initiated with timely notification of ITR Forms (from ITR-1 to ITR-6). However, only two ITR Forms – viz. ITR-1 (Sahaj) and ITR-4 (Sugam) – are now available on the Income Tax Portal for filing of the return of income.

Once the details of tax deducted at source (TDS) are fully submitted and the forms like Form 16, Form 26AS, etc are made available, other ITR Forms would also be made available for filing.

However, before you start filing your return of income, you should know the changes made in the new ITR Forms to make the filing process easier.

Dr. Suresh Surana, Founder, RSM India, lists some of the key major changes in the ITR Forms:

Details of Income from Retirement Benefit account maintained in Notified Foreign Countries (ITR 1 to ITR 4)

The individual taxpayers would be required to furnish details of income from retirement benefit accounts maintained in foreign countries in accordance with Section 89A of the Income Tax Act, 1961 (‘hereinafter referred to as ‘the IT Act’). Accordingly, changes for such details have been made in ITR 1 to ITR 4. Further, in this regard, the CBDT has vide Notification No. 25/2022/F. No. 370142/7/2022-TPL dated 4th April 2022 notified Canada, United Kingdom of Great Britain and Northern Ireland and United States of America (USA) to be notified countries for the purpose of Section 89A. Also, quarter wise retirement benefits break up to be provided for interest calculation u/s 234C of the IT Act.

Details pertaining to Deferred ESOP (ITR 2 & ITR 3)

A New Schedule has been inserted for reporting of tax deferred on ESOP received from employer being an eligible start up u/s 80-IAC requiring the following details:

  • Amount of tax deferred in ITR filed from earlier Assessment Years;
  • Date of sale of specified securities and amount of tax attributable to such sale;
  • Date on which he ceased to be an employee of the organisation;
  • Whether 48 months have expired from the end of the relevant assessment year in which specified security or sweat equity shares were allotted
  • Amount of tax payable in current assessment year;
  • Balance amount of tax deferred to be carried forward to next assessment years

Details of Significant Economic Presence (ITR 4, ITR 5 & ITR 6)

In case of a non-resident having Significant Economic Presence (SEP) in India, the following details would be required to be disclosed:

  • Aggregate of payments arising from the transaction or transactions during the previous year as referred in Explanation 2A(a) to Section 9(1)(i) of the IT Act
  • Number of users in India as referred in Explanation 2A(b) to Section 9(1)(i) of the IT Act.

Disclosure pertaining to Transfer Pricing Secondary Adjustments (ITR3, ITR5 & ITR6)

Schedule TPSA required the taxpayer to provide details of Tax on secondary adjustments as per section 92CE(2A) as per the schedule provided in e-filing utility as follows:

  • Amount of primary adjustments on which option u/s 92CE(2A) is exercised & such excess money has not been repatriated within the prescribed time.
  • Calculation of Amount of Tax Payable on above
  • Tax Paid Challan

Disclosure for Investment in Unincorporated Entity (ITR 6)

New Schedule IF inserted to seek the disclosure of investment made in unincorporated entity as follows:

  • Name of the entity;
  • Type of the entity;
  • PAN of the entity;
  • Whether the entity is liable for the audit?;
  • Whether section 92E is applicable to the entity?;
  • Share in the profit of the entity;
  • Amount of share in the profit; and
  • Capital balance on 31st March in the entity.

Disclosure pertaining to Foreign Assets to be disclosed as per Calendar year (ITR2, ITR3, ITR5, ITR6 & ITR7)

Particulars pertaining to the Foreign Assets now required to be furnished for calendar year i.e. Details for Schedule FA for AY 2022-23 would be for assets held during the calendar year ending on Dec 31, 2021. Earlier, such details were required to be furnished on a financial year basis.

Separate Disclosure for Bonds & GDR purchased in Foreign Currency u/s 115AC (ITR2, ITR3, ITR5 & ITR6)

Separate disclosure is required of interest and dividend incomes taxable under Section 115AC of bonds and GDR purchased in foreign currency

Details of Investment in Schedule J (ITR7)

New fields Inserted in Schedule J Statement showing the funds and investments as on the last day of the previous year to provide for the following:

1. Corpus details and Movement of funds as applicable to entities registered u/s 12AB

2. Details of Loans and Borrowings – opening and closing balances along with movement of loans

Details of investment/deposits made under Section 11(5) as on 31st March, 2022 that includes:

  • Details of investment made out of corpus,
  • Income accumulated u/s 11(2),
  • Income of earlier years up to 15% accumulated or set apart
  • Loans and borrowings

Details of Slump Sale (ITR2, ITR3, ITR5 & ITR6)

In accordance with as per Rule 11UAE(2) and Rule 11UAE(3), disclosure of FMV of capital assets and consideration received in a slump sale transaction is required to be provided as follows:

  • Fair Market Value of the capital assets transferred by way of slump sale; or
  • Fair Market Value of the consideration received or accruing due to transfer by way of slump sale.

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