New Income Tax Return form makes it easier to report foreign assets

The Central Board of Direct Taxes has notified the income tax return forms for FY 2021-22 (Assessment Year 2022-23). 

Experts said the early notification of ITR forms is a positive step. “The best thing that has happened is they have come out with the ITR forms on April 1,” says Harsh Roongta, who heads Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor.

Deepak Jain, chief executive, TaxManager.in, a tax e-filing and compliance management portal, said, “As these forms are quite elaborate, their early notification will give assessees more time to get the documentation and paperwork ready, and hence make complete disclosures while filing their returns.”

Experts said there aren’t too many changes in the forms this year. “The forms have been largely kept unchanged,” said Rohit Arora, advocate, Uttarakhand high court.

However, a few additional pieces of information need to be provided.

Key changes

The biggest change is regarding foreign retirement account. “In all ITR forms, new rows have been included where details have to be reported (by those to whom it applies) of income accrued on foreign retirement accounts, and any such income, which has been claimed for tax relief under Section 89A,” says Srivatsan Chari, co-founder, Clear.

In the old ITR forms, Schedule FA (Foreign Assets) required the reporting of foreign assets only if a person had held them at any time during the “relevant accounting period”. The accounting period was not defined. The new ITR forms have replaced the expression “accounting period” with “calendar year ending as on 31st December 2021”.

Naveen Wadhwa, deputy general manager, Taxmann said, “This change implies that the assessee shall furnish details of all foreign assets held between April 1, 2021 and December 31, 2021 in the return to be filed for AY 2022-23.”

This change, according to him, removes all scope for misunderstanding or miscalculating the reporting period.

A few omissions

There are a few omissions as well, according to experts.

Suresh Surana, founder, RSM India, said, “It seems the option of filing an updated return under Section 139(8A) has been inadvertently missed out in the notified ITR forms.”

Chari points out that no schedule for cryptocurrency-related disclosures has been inserted.

Bindisha Sarang and Sanjay kumar Singh