The tax return forms have now been modified to include necessary disclosures regarding income from VDAs. They also have to mention whether the income is to be categorised as business income or capital gains.
The last date for filing income tax return (ITR) for the financial year 2022-23 (the assessment year 2023-24) for individuals (whose accounts are not required to be audited) is July 31, 2023.
There are no major changes in the ITR forms. However, a few changes have been introduced this year (compared to last year), which taxpayers should know before starting the process of filing tax returns.
Here is a close look at crucial changes made in the latest tax return forms.
Reporting income from Virtual Digital Assets (VDAs)
Several specifications have been introduced in the Income Tax Act to tax Virtual Digital Assets-related incomes since 1 April 2022. TDS liability under section 194S is applicable to payments received for crypto transactions.
The tax return forms have now been modified to include necessary disclosures regarding income from VDAs. Taxpayers are required to furnish details about the income from VDA. Plus, they have to mention whether the income is to be categorised as business income or capital gains, and accordingly divulge the same under the relevant head of income.
If any individual has gained any income from cryptocurrencies during FY 2022-23, s/he is advised to keep the relevant details, including date of acquisition, date of transfer, cost of acquisition and sale proceeds and so on handy for smooth filing of tax returns.
It is necessary to verify Form 26AS and AIS to confirm that income from digital assets in respect of which tax has been deducted under the newly introduced section 194S has been included in the return of income.
Details of ARN (Donation Reference Number) to Claim 80G Deduction
If a donation is eligible for deduction under Section 80G during FY 2022-23, then it is obligatory to provide the Donation Reference Number (referred to as ARN in the ITR forms) where the donation is made to organisations where a 50 percent deduction is allowed subject to the qualifying threshold.
The ARN is a unique reference number and is available on Form 10BE/receipt issued by the donee entity.
Tax Collected at Source
Taxpayers are allowed to claim Tax Collected at Source (TCS) as a credit against their income tax liability. Plus, if a taxpayer has claimed relief under Section 89A in previous years and later becomes a non-resident, the ITR forms require the details of taxable income from such relief.
Disclosure of Income on which Section 89A Relief Claimed
Indian residents have the choice to defer tax on income earned from foreign retirement benefits accounts until withdrawal.
Section 89A provides tax relief on income from retirement benefit accounts held in a country specified by the I-T department. If an individual has claimed such relief, they need to furnish details in Schedule Salary.
Foreign Institutional Investor Disclosure
Several other changes have also been made in the ITR forms for FY 2022-23 such as additional information about advances in the Balance Sheet in ITR-3, and a requirement to share the SEBI registration number where the taxpayer is a Foreign Institutional Investor (FII) or Foreign Portfolio Investor (FPI) registered with SEBI.
Disclosure on Intraday Trading
According to new ITR forms, turnover and income from intraday trading should be reported under the newly introduced section ‘Trading Account’.
Source: https://www.moneycontrol.com/news/business/personal-finance/itr-filing-for-fy-2022-23-28-days-left-check-these-changes-in-income-tax-return-forms-10897181.html
© 2018 CA Chandan Agarwal. All rights reserved.