Still no mention of crypto: Everything you need to know about the ITR form changes - Times of India

Still no mention of crypto: Everything you need to know about the ITR form changes – Times of India

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NEW DELHI: India’s Central Board of Direct Taxes (CBDT) has notified new Income Tax Return (ITR) forms for the assessment year 2022-23 to file a return of income for the financial year 2021-22. While the forms have mostly remained unchanged, there are a few minor additions, such a disclosures on investment in unincorporated entities, and income from overseas retirement benefit accounts from taxpayers.
The newly notified forms do not change the applicability of forms to different taxpayers
“The applicability of ITR forms notified for FY 2021-22 remains unchanged, however, some of the key changes includes additional options for selecting residential status, reporting of interest accrued on PF exceeding Rs 2.5 lakhs, new schedule for tax deferred on ESOP, additional disclosures for capital gains, replacing accounting period with calendar year for reporting foreign assets, etc,” said Akhil Chandana, Partner, Grant Thornton Bharat.
There is nothing about crypto, which means ambiguity continues
“It is a relief to see that ITR forms do not carry many changes as it makes filing convenient for taxpayers. In all ITR forms new rows have been included where details are required to be reported (by those to whom it applies) for income accrued on foreign retirement accounts and any such income which has been claimed for tax relief under section 89A. There is no insertion of any schedule related to disclosure of cryptocurrencies, perhaps that shall be included in next year’s ITR forms,” said Srivatsan Chari, Co-Founder – Clear.
Like last year, ITR1 can be filed by individuals who have a total income up to Rs 50 lakh. The source of such income can include: salaries, income from one house property and other sources such as interest income, dividend etc. and agricultural income up to Rs 5,000.
What is new: The assessee will have to provide information about income from overseas retirement funds while calculating their net salary. The assessee will have to disclose whether the overseas retirement fund is in a notified country.
Key changes explained
According to Saurrav Sood, Practice Leader (International tax), SW India, some of the key changes that need a specific mention are:
– Deemed dividend under section 2(22)(e) – the forms require separate reporting of deemed dividend income in the Other Sources schedule. Such specific mention will attract greater scrutiny by the tax officer at the time of assessment since it will be a self-disclosure by the taxpayer and will need corroboration with the facts.
– Significant economic presence – the non-resident is required to confirm if there is any significant economic presence for the reporting period. Such reporting will trigger greater scrutiny by the tax officer for determining its impact on the attribution of profits for such transactions in India since it is an accepted fact that attribution of profit to India is always a subjective issue and cannot be concluded with certainty by either side.
– Employee stock option – the forms have been amended by adding a new schedule that will capture the details of deferred tax on ESOPs. This will help in tracking the amount that stands deferred due to extended timelines provided under the provision of the Act in the case of ESOPs. But, where the employee ceases employment in between the exercise date and transfer date, the already disclosed deferred tax amount will not convert to actual tax payment, hence it is likely to trigger questions from the tax officer.
-Secondary adjustment – the tax paid on the amount repatriated to India under secondary adjustment needs a specific mention in the forms. The new form has been amended to include details to be filled by the taxpayer for such adjustments in all the assessment years. This will help the tax office in tallying the additional tax that the taxpayer has paid on account of secondary adjustment and will form a ready material to reconcile such amounts.
– Interest accrued on provident fund beyond exemption limit – the schedule OS has been amended to seek reporting of such interest which is over and above the exempt limit. Such separate reporting shall trigger the suo moto offer to tax of such income which was otherwise exempt earlier. It is likely that the amount will also find a specific mention in Form 26As, so as to cross-tally with the amount declared by the taxpayer.
The ITR-2 form seeks information regarding the interest accrued in the provident fund (PF) on contributions exceeding Rs 2.5 lakh per annum. In order to tax high-value depositors in the Employees’ Provident Fund (EPF), the government last year said interest on employee contributions to the provident fund over Rs 2.5 lakh per annum would be taxed from April 1, 2021. This form is filed by individuals and Hindu Undivided Family (HUF) not having income from business and profession.
The assessee would be required to provide additional information on dividend income, and dividend income chargeable at Double Taxation Avoidance Agreement (DTAA) rates.
“The ITR 2 form has been modified to capture additional information. With respect to stock option benefits provided by eligible startups, the trigger for taxation is deferred to the point of sale. A separate schedule has now been introduced to capture details of such deferment. Interest accrued on PF contributions beyond specified limits is taxable. The tax rerun forms seek to capture details of such interest accrued as well”, said Saraswathi Kasturirangan, Partner, Deloitte India.
ITR-3 is filed by people having income as profits from business/ profession, while ITR-5 is filed by LLPs.
ITR-4 can be filed by individuals, HUFs and firms with total income up to Rs 50 lakh and having income from business and profession.
While the ITR forms have been notified, filing of such forms has not been enabled yet on the Income tax portal. “This timely notification with few changes will make it easier for the assessee to collate the requisite information as well as will provide sufficient time for tax officials to develop utility for ITR forms timely.,” said CA Inderpal Singh Pasricha, Senior Partner, I.P. Pasricha & Co.



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