Almost all income taxpayers believe that submitting an income tax return (ITR) is difficult. Choosing the appropriate form for ITR filing is the largest challenge that the average income taxpayer faces. This is because there are currently 7 different ITR filing forms. The income taxpayer must pick one of them for himself. The Central Board of Direct Taxes (CBDT) has developed a Common ITR Form to address this issue facing income taxpayers.
By releasing the Common ITR Form draft, the CBDT has invited suggestions from all parties involved, including regular people. The ITR form has several issues, but the biggest one is that the form must be chosen based on one's status and income profile. As a result, choosing the appropriate form can be confusing for taxpayers. They occasionally even select the incorrect form. The CBDT is moving toward establishing a standard ITR form to address this.
What is the Common ITR Form?
To file ITRs, CBDT plans to use a single form. Income taxpayers will see one ITR form when they login to fill out their returns. It is referred to as the Common ITR Form. Wizard has been added as a feature to this form. Some inquiries will be made in the form itself at first. They will require a yes or no response from the taxpayers. The option (utility) for the widget you will use will become available. If not, the choices that are unsuitable for you won't be displayed. There will be more than 40 of these questions on the form.
You will get the option
Even after the introduction of the common ITR form, ITR-1, ITR-4, and ITR-7 forms will still be in use. CBD is meant to be a choice for taxpayers. For ITR filing, taxpayers will choose to use the current form (ITR-1 or ITR-4) or the suggested common ITR form. ITR-2, ITR-3, ITR-5, and ITR-6 forms will be eliminated once the universal ITR form is introduced.
The Waltrey Partners India partner Kuldeep Kumar is quoted as saying, "ITR-1 and ITR-4 are relatively easy forms. These don't need any more disclosures. ITR-7 is a trust form. For filing returns, this form is rarely utilized.
Income Tax Payers Will Benefit
According to CBDT, the introduction of the standard ITR form is intended to speed up and simplify the filing of tax returns. Since the taxpayers can't utilize it, the new form won't be opened in their presence. Therefore, the income taxpayer will save time in this circumstance, and filling out the ITR will be comfortable for him. In addition, the fear associated with selecting the incorrect form will go.
These forms are now in favor:
ITR Form 1: Referred to by this Sahaj name. Individuals with incomes up to Rs may complete this form. 50 lakh. This is for any salary, rental income, or other types of revenue.
ITR Form 2: People with income from residential real estate may fill out this form.
ITR Form 3: People who make a living through their profession or industry must fill it.
ITR Form 4: It is frequently referred to as Sugam. Individuals, Hindu Undivided Families, and businesses with an annual income of up to Rs. 50 lakh are all eligible to use the Sugam form.
ITR Form 5 and 6: Businesses and Limited Liability Partnerships (LLPs) must file ITR Forms 5 and 6.
ITR Form 7: Trusts and NGOs can utilize the ITR-7 form.