CBDT proposes common ITR form for taxpayers

The Central Board of Direct Taxes has released a draft common income tax return form by merging all the existing returns of income except ITR-7 as it looks to reduce the time taken by taxpayers to file ITRs.

Currently, taxpayers are required to furnish their income tax returns in ITR-1 to ITR-7 depending upon the type of person and nature of income. These 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 proposed draft ITR takes a relook at the return filing system in tandem with international best practices, says the I-T department.

It, however, adds that the current ITR-1 and ITR-4 will continue, thus giving 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 new income tax return form is customised for taxpayers with applicable schedules based on certain questions answered by the taxpayers, the Ministry of Finance says.

The questions have been designed in such a manner and order that if the answer to any question is "no", the other questions linked to this question will not be shown to the taxpayer, it adds.

Instructions have been added to assist the filing of the return containing the directions regarding the applicable schedules, the government further says, adding that the proposed ITR has been designed in such a manner that each row contains one distinct value only. This, according to CBDT, will simplify the return filing process.

"The taxpayer is required to answer questions which apply to him and fill the schedules linked to those questions where the answer has been given as 'yes'. As a result, the time and energy of the taxpayer will be saved and he will be relieved of the additional burden of going through all the parts of the ITR as is the requirement under the existing ITRs. This will increase ease of compliance," the CBDT says.

"Once the common ITR Form is notified, after taking into account the inputs received from stakeholders, the online utility will be released by the Income-tax Department," the tax department says, adding that a customised ITR containing only the applicable questions and schedules will be available to the taxpayer.