Key Changes in ITR Forms for Filing Income Tax Returns: What Taxpayers Need to Know

The income-tax return filing season is here, and taxpayers need to be aware of some changes in the ITR forms compared to last year. These changes include:

1. Reporting Income from Virtual Digital Assets (VDAs)

Starting from April 2022, income from VDAs, such as cryptocurrencies and Non-Fungible Tokens, is taxable. The ITR forms now require taxpayers to disclose their VDA income and specify whether it falls under business income or capital gains. Important details like acquisition date, transfer date, cost of acquisition, and sale proceeds need to be provided.

2. Disclosure of Donation Reference Number (ARN)

To claim a deduction under Section 80G for eligible donations made during FY 2022-23, taxpayers must now mention the Donation Reference Number (ARN) on the ITR form. The ARN is a unique reference number found on Form 10BE or the donation receipt issued by the donee entity.

3. Other Changes

The ITR forms now allow taxpayers to claim Tax Collected at Source (TCS) as a credit against their income tax liability. Additionally, if a taxpayer has claimed relief under Section 89A in earlier years and later becomes a non-resident, the ITR forms require the disclosure of taxable income from such relief.

Furthermore, there are additional changes specific to certain situations, such as disclosing advances in the Balance Sheet in ITR-3 and providing the SEBI registration number for Foreign Institutional Investors (FII) or Foreign Portfolio Investors (FPI) registered with SEBI.

To file ITR online, taxpayers can visit the Income Tax Department's online portal. After determining the appropriate ITR form based on their income sources, taxpayers can fill it online or use offline utilities provided by the department. The portal offers pre-filled data based on information available with the tax authorities, which helps in auto-populating various fields in the ITR form.

It is recommended to cross-verify the pre-filled information with personal records, as there might be discrepancies. Taxpayers should also compare the information with their Annual Information Statement (AIS), Form 26AS, and Taxpayer Information Summary (TIS) available on the IT Portal.

By following these guidelines and staying updated with the changes, taxpayers can successfully file their income tax returns for the financial year 2022-23.

The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global services.