8 changes in new ITR forms for AY 2023-24, you must know

ITR forms for AY 2023-24

The Central Board of Direct Taxes (CBDT) has recently released the income tax return forms for the assessment year (AY) 2023-24. Previously, the ITR forms were notified by the Centre either at the end of the financial year or at the beginning of the new financial year. The early release of the ITR forms will provide sufficient time to all stakeholders for filing their taxes. Taxpayers can now complete their ITR filings soon after the financial year ends due to the timely availability of the income tax return forms for the FY 2022-23.

Various types of ITR forms are available for filing, depending on the taxpayer’s income and the source of income. For example,

  • ITR Form 1 is applicable to individuals earning up to ₹50 lakh from sources such as salary, one house property, or other sources.
  • ITR-2 is applicable to individuals earning over ₹50 lakh with income from residential property.
  • ITR-3 is applicable to individuals with business/professional income.
  • ITR Form 4 is a simplified form designed for a significant number of small and medium taxpayers and freelancers.
  • ITR-5 is for LLPs and partnership businesses.
  • ITR-6 is for companies if they are not claiming exemption under Section 11 of the Income Tax Act 1961.
  • ITR-7 is for trust, political parties and other assessee not eligible to file any of the above return form.

Read Also: Income Tax on Startup – Tax Rates, eligibility and prerequisites

Changes in ITR form for AY 2023-24

There are no major changes in the new ITR forms; however, some minor changes are like:

1. Separate schedule for Crypto/VDA income

If you made any income from crypto and other virtual digital assets in FY 2022-23 then you will have to report such income in a separate schedule provided in the new ITR forms. The details that you need to provide include finer points like the date of acquisition, date of transfer and head under which income to be taxed (capital gain). If you received crypto/VDA as a gift, then you will have to provide the details of the amount on which tax has been paid for the transfer of the asset.

Read also: ITR-U: Last date to File ITR for FY 2019-20, 2020-21 and 2021-22

2. Balance Sheet Reporting

Advances received from individuals specified in Sec 40A(2)(b) (Payments from Relatives) and others must be reported under the ‘Advances’ category in Source of Funds.

3. Intraday Trading Disclosure

A new option has been added to allow for the disclosure of both turnover and income from intra-day trading in the Trading Account. Previously, only the gross profit transferred from the Trading Account was required to be declared.

Read Also: TDS Rate Chart for FY 2022-23/AY 2023-24 – Income Tax

4. Old or New Tax Regime

A new questionnaire in ITR 3 and ITR 4 requires you to report if you have opted for the new tax regime in the previous AY and mention the year it was chosen. You must also state if you opted out of the new regime in any prior years and provide 10IE details for both selections.

5. SEBI Registration Number Disclosure for FII/FPI : 

Foreign institutional investors (FII/FPI) are now required to provide their SEBI registration number in ITR 2 and ITR 3 as well, apart from ITR 5 and 6 as an additional disclosure measure

6. Retirement benefit as salary income

There is a new disclosure for the income from retirement benefit account under schedule salary. Income taxable during the previous year on which relief u/s 89A was claimed in any of the earlier previous years should be reported.

7. Retirement benefit as other income

If the retirement benefit account is treated as other income, there is a new disclosure requirement under Other Sources. Income taxable during the previous year on which relief u/s 89A was claimed in any of the earlier previous years should be reported.

8. No Common ITR

Considering that the notified ITRs for AY 2023-24 are separate ITR forms and not the common ITR as proposed. It is expected that the work on the Common ITR Form may still be in the pipeline and the CBDT may notify the same taking into account the inputs received from the stakeholders. It seems that as the Government aims to consolidate the relevant ITR Forms and introduce a single master form, this might still be in the pipeline and could be expected to be released in the near future.

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