ITR forms: The Central Board of Direct Taxes (CBDT) has notified ITR forms 1-6 with some changes that taxpayers can’t afford to miss out
The income tax return or ITR forms for AY 2022-23 have been notified on 30th March 2022. The Central Board of Direct Taxes (CBDT) has notified ITR forms 1-6 with some changes that taxpayers can’t afford to miss out. The newly notified forms do not change the applicability of forms to different taxpayers but there are some edits in the forms to include reporting of additional details there in.
Saurrav Sood, Practice Leader (International tax) at SW India lists out 5 important changes that taxpayers should keep in mind during ITR filing:
1] Separate reporting of deemed dividend: Now from current fiscal, an income taxpayer will have to report deemed dividend income in the other sources schedule. Such specific mention will attract greater scrutiny by the income tax officer at the time of assessment since it will be a self-disclosure by the taxpayer and it will need corroboration with the facts.
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2] Significant economic presence: From current fiscal, non-resident taxpayers would require to confirm if there is any significant economic presence for the reporting period. Such reporting will trigger greater scrutiny by the income tax officer for determining its impact on the attribution of profits for such transactions in India because 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.
3] ESOP option: From AY 2022-23, ITR forms have been amended and income tax department has added 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.
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4] Specific mention of secondary adjustment: While filing ITR for AY 2022-23, income tax paid on the amount repatriated to India under secondary adjustment needs a specific mention in ITR 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 income 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.
5] PF interest beyond exemption limit: From AY 2022-23, 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.
