The Financial Year 2023-24 is on the verge of completion and here we are again buckling up for the filing of ITR. Considering, this is an election year, the Government refrains itself in amending the Act in the budget of this fiscal year. However, there are certain changes in ITR forms that the Government has introduced in Budget, 2023 that need to be addressed.
With this article, we bring to the attention of the readers the changes that have been made in newly notified ITR Forms, which are important to keep in mind while filing the respective ITR. These changes are as below,
> Verification of ITR
Now, the individuals and HUFs who are filing ITR-3 i.e., who are liable for Tax Audit u/s 44AB of the Act can verify the return using EVC also. Earlier, DSC could do it only.
> The new tax regime is the default tax regime
Now, the default tax regime would be the new tax regime. Individuals, HUF, AOP, and BOI have to select the option of the old tax regime if they want to be taxed as per the old tax rates.
Individuals, HUF, AOP, and BOI who have a business or professional income have to file a Form 10-IEA on or before the due date of filing the return. In addition, they can switch between the new and old tax regimes only once in a lifetime.
Individuals, HUF, AOP, and BOI who do not have business or professional income need not file Form 10-IEA and they can switch between the new and old tax regime in any financial year.
Form 10IEA plays a crucial role for taxpayers in India who want to exercise their choice regarding the tax regime applicable to them. Whether opting for the old tax regime or embracing the new one, this form allows individuals to communicate their preference to the Income Tax Department.
In simple words, an assessee filing ITR 2 is only required to indicate his choice of tax regime in the return of income. An assessee filing ITR 3 will be required to file Form 10-IEA to opt out of the new tax regime.
> Legal Entity Identifier
Return filers who are claiming a tax refund of Rs. 50 crores and more have to mention the LEI number in ITR. The Legal Entity Identifier (LEI) is a 20-character alphanumeric code used to uniquely identify parties in financial transactions worldwide.
> Furnishing UDIN and Acknowledgment number of Audit Report
The return filers have to provide, in addition to the audit information, UDIN and Acknowledgment number of the Tax Audit Report.
> Receipt in cash column added in ITR-4
The return filers who are opting for presumptive income u/s 44AD or 44ADA of the Act have to report the cash receipts during the year under consideration in ITR-4. A new column has been inserted in Schedule BP of ITR-4 to this effect.
Since the turnover limitation has been increased from Rs. 2 crore to Rs. 3 crore and from Rs. 50 lakhs to 75 lakh u/s 44AD and 44ADA of the Act respectively, it has been made mandatory to disclose the cash receipts in ITR.
> Sum payable to MSMEs
The Government has inserted a new Clause (h) in Section 43B of the Act where it has been if payment made to MSMEs beyond the time prescribed under MSMED Act, 2006 shall be allowed only in the year in which such sum has been paid.
Therefore, in ITR forms, a new column is inserted under Part A-OI (Other Information) to disclose the sum payable to MSMEs beyond the specified time limit per the MSMED Act.
> Information regarding CGAS
Schedule -CG has been modified to include the information to be provided by the assessee regarding the sum deposited in the Capital Gain Account Scheme i.e., Date of deposit, Account Number, and IFSC of the bank in which such account is opened by the assessee.
> Details of contributions made to political parties
The following additional details are made mandatory to report in newly notified ITR forms,
- Date of Contribution
- Contribution Amount (with a breakdown of contributions made in cash and other modes)
- Eligible Contribution Amount
- Transaction Reference Number for UPI transfer or Cheque Number/IMPS/NEFT/RTGS
- IFS Code of the Bank
> Information regarding deduction u/s 80U of the Act
In the newly notified ITR forms, a new Schedule-80U has been inserted requiring the return filers to provide the information regarding deduction u/s 80U of the Act, which is as follows,
- Nature of disability
- Date of filing Form 10-IA
- Acknowledgment number of the Form 10-IA
- UDID number (If available)
> Information regarding deduction u/s 80DD of the Act
The new ITR forms have introduced a new ‘Schedule 80DD’ seeking below details,
- Nature of the disability
- Type of dependent (spouse, son, daughter, father, mother, brother, sister or member of the HUF)
- PAN of the dependent
- Aadhaar of the dependent
- Date of filing and acknowledgment number of Form 10-IA
- UDID Number
> New field for option u/s 115BAE of the Act
A new field has been inserted seeking details on whether the Assessee is a manufacturing cooperative society opting for taxation under Section 115BAE.
Further, the date of filing Form 10-IFA and its acknowledgment number are required to be furnished.
> Other small changes
In addition to the above, some other small changes have also been made to make the ITR forms in line with the amendments brought in the Act, which are as follows,
- Schedule-OS has been amended to incorporate the details of the dividend received by the Assessee from a unit in IFSC (‘International Financial Service Centre’)
- In the new ITR forms, it is obligatory for the taxpayer to disclose all the bank accounts they have ever held, except dormant accounts.
- Schedule DPM has been amended to provide that the WDV of the block as of 01-4-2023 shall be increased by the amount of unabsorbed depreciation (of additional depreciation), which was not allowed to be adjusted because of opting for Section 115BAC of the Act.
- New Schedule-80 IAC and Schedule-80 LA has been introduced
- The assessee has to furnish information regarding its recognition status as MSME and to provide the registration number allotted as per the MSMED Act, 2006.
- In ITR-3 and ITR-5, a new column has been inserted to make the return filers mandatory to mention the due date of filing the return by selecting the options from the drop-down menu.
- Schedule OS has been amended to disclose income by way of winning from online games chargeable under Section 115BBJ of the Act.
Considering the volume of changes the Government has brought in the ITR forms, professional assistance should be sought to avoid any misunderstanding or misreporting in the filing of ITR which ultimately can lead to further repercussions including the refund being held up by the department or raising of unwanted demand.
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About the Author: The author is Ruchika Bhagat, FCA helping foreign companies in setting up and closing businesses in India and complying with various tax laws applicable to foreign companies while establishing a business in India. Neeraj Bhagat & Co. Chartered Accountants is a well-established Chartered Accountancy firm founded in the year 1997 with its head office in New Delhi.
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