To make the tax compliance process easy for taxpayers, Union Minister Finance Nirmala Sitharaman in her Budget speech on February 1 announced the introduction of next-generation common income tax return form. The minister said, “The rolling out of a next-generation Common IT Return Form and strengthening of grievance redressal mechanism to further improve taxpayers services.”
Sitharaman said noted that “our taxpayers’ portal received a maximum of 72 lakh returns in a day; processed more than 6.5 crore returns this year; average processing period reduced from 93 days in financial year 13-14 to 16 days now; and 45 per cent of the returns were processed within 24 hours.”
In November last year, the Central Board of Direct Taxes (CBDT) had come out with the proposal for the common income tax return (ITR) form for all taxpayers. At the time, the CBDT has proposed to merge all ITR forms except Form-7. The proposal was made as the taxpayers were required to furnish their income tax returns in ITR-1 to ITR-7 depending on the nature of income.
Additionally, the CBDT release noted that “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 CBDT in its release regarding the common ITR form proposal had additionally notified “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.
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 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 release said.
Meanwhile, in her Budget speech, the finance minister announced a number of other proposals, including better targeting of tax concessions. For tax concessions and exemptions, she proposed to cap deduction from capital gains on investment in residential house under sections 54 and 54F to Rs 10 crore. “Another proposal with similar intent is to limit income tax exemption from proceeds of insurance policies with very high value,” she said.
Some other major measures proposed by the union minister were “removing the minimum threshold of Rs 10,000/- for TDS and clarifying taxability relating to online gaming; Not treating conversion of gold into electronic gold receipt and vice versa as capital gain; Reducing the TDS rate from 30 per cent to 20 per cent on taxable portion of EPF withdrawal in non-PAN cases; and Taxation on income from Market Linked Debentures.”
