New ITR forms notified for AY 2023-24: Key changes in new ITR forms

On February 10, 2023, the CBDT released Notification No. 04/2023, introducing revised versions of Income Tax Return (ITR) forms and the ITR Acknowledgement for the Assessment Year 2023-24. The updated forms comprise ITR-1 SAHAJ, ITR-2, ITR-3, ITR-4 SUGAM, ITR-5, ITR-6, ITR-V, and ITR Acknowledgement. These forms will be available from April 01, 2023.

The deadline for filing ITR for the FY 2022-23 (AY 2023-24) for individuals whose accounts do not require auditing is July 31, 2023.

No significant changes have been made to the ITR forms. However, it is worth noting these changes in the new forms:

Salary and Income from other sources: A new disclosure has been added for ‘Income from retirement benefit accounts’. Disclosure is required to be made about the taxable income on which relief under section 89A was claimed in any of the earlier years.

Crypto/VDA:

• A separate ‘Schedule – VDA’ has been added. So, profits from VDA or crypto must be reported under this schedule.

• If VDA is treated as capital gains, a quarterly breakup must be provided under the Capital Gains Schedule.

• Every transaction of VDA must be reported along with the dates of sale and purchase.

Intraday Trading Disclosure: As per the new income tax forms, turnover and income from intraday trading must be reported under the newly introduced section ‘Trading Account’.

Old vs New tax regime: A new questionnaire in ITR 3 and ITR 4 has been added to determine if the taxpayer has opted out of the New Tax Regime in previous years.

Foreign Institutional Investor Disclosure: Foreign institutional investors (FII/FPI) must provide their SEBI registration number as an additional disclosure measure.

Balance Sheet Reporting: There has been a slight change in balance sheet reporting. According to the new ITR forms, advances received from individuals specified in Sec 40A(2)(b) of the Income Tax Act and others must be reported under the ‘Advances’ heading in Source of Funds.

The eligibility criteria for filing the ITR-1 form also referred to as Sahaj, remains unchanged. This form is suitable for resident individuals with a total income of up to Rs 50 lakh, and the source of income must be from salary, one house property, other sources such as interest, dividends, etc., and agricultural income of up to Rs 5,000. 

ITR-2 is suitable for individuals or HUFs without business or professional income, allowing them to report capital gains or losses from assets like shares, property, etc. It must also be used by those with more than one house property or non-resident status or if they hold unlisted equity shares or are company directors. 

ITR-3, on the other hand, is used by individuals or HUFs with business or professional income, and those who chose the new tax regime must provide the year of opting and Form 10E acknowledgement number.

If an individual chooses the new tax regime, they cannot change it every year, unlike salaried individuals. ITR-4 is a tax form for those with a business or profession who opted for the presumptive taxation scheme. It cannot be used by individuals who are directors, have unlisted equity shares, deferred income tax on ESOPs or agricultural income over Rs 5,000, or by non-residents. 

ITR-5 is used by taxpayers other than individuals, HUFs, companies, and those filing ITR-7, while ITR-6 is for companies.

For any clarifications/feedback on the topic, please contact the writer at ektha.surana@clear.in