Common Return Form: Taxpayers are going to get a common form very soon for filing income tax returns. Let’s know all its benefits.
Money Guru: Filing Income Tax Return is going to be easier very soon. According to the new update, very soon all types of taxpayers can file their ITR through a single common form. Which means there will be only one form for all. With this, people will get rid of the hassle of choosing the right income tax form for themselves. Comments have also been sought on this new form from all the stakeholders till 15th December. We will talk to tax experts Sunil Garg and Mukesh Gupta for what can be special in this new form and what facilities people are going to get.
Common Return Form
- Common return form will come soon
- CBDT proposed to have only one form
- Suggestions were sought from stakeholders till 15 December
- Objective Simplify the return filing process
- People will have convenience in tax filing
- ITR-1 and 4 ie Sahaj and Sugam will be operational
- ITR-7 will also remain under the old form
- Many details will be pre-filled in the common ITR form
Now how many types of forms?
- ITR 1- Sahaj-Taxpayers with income up to 50 lakhs
- ITR 2 – Income from residential property
- ITR 3 – On income from business, profession
- ITR 4-Sugam-Individuals, firms with income up to 50 lakhs
- ITR 5&6-LLP for Firms and Businesses
- ITR 7- For Trust and NGO
Common ITR Form – What will be the benefit?
Will be helpful in preventing tax evasion
Use of artificial intelligence in new form
The new form will automatically verify the AIS information
AIS- Annual Information Statement
new form will be user friendly
Easy to file returns by yourself without help
Increased tax collection
- The government had a budget estimate of `27.5 lakh crore in FY 22-23
- Tax collection beyond government’s estimate
- India strong despite the sound of recession all over the world
- Reduction in cases of tax evasion after implementation of GST
- Will help the government reduce its deficit
- Government will be able to spend more money on development
Will the capital gains tax rules change?
- Changes in capital gains tax rules possible
- There may be a change in the rules of holding period
- 12-24 months holding period on shares, debentures, bonds etc.
- Possible holding period of 36-48 months on house, flat, land
LTCG and STCG currently have different tax slabs - Listed shares are of 12 months
What is the difference between listed and unlisted shares?
- Listed Shares – Shares which are listed on the stock exchange
- Unlisted Shares – which are not listed on the stock exchange
- Tax rules are different for listed and unlisted shares
- Capital gain on sale of listed shares after 12 months
- Capital gain on sale of unlisted shares after 24 months
What are the tax rules for listed and unlisted shares?
- Capital gains tax is applicable on selling listed shares, funds
- Listed Shares – Long term capital gain, then exemption of ` 1 lakh
- No discount on selling unlisted shares
- Unlisted shares attract LTCG rate of 20%
- Holding period in unlisted shares 24 months
- Tax on sale of bonus shares
- Company issues bonus shares to shareholders at zero value
- Entire amount will be taxed on sale of bonus shares
- There is also no benefit of indexation on selling bonus shares.
- Shareholder will not be taxed on buyback shares
- The company itself collects 20% tax in buyback.
- Tax on difference between buyback amount and allotment price
- Tax rules on ESOP shares
- Taxes have to be paid twice on ESOP
- ESOP-Employee Stock Ownership Plan
- Tax on difference between market price and allotment price
- Employee has to pay tax on ESOP
- Capital gains tax on the difference between the sale price and the market price when the shares are sold
