Parliamentary Panel urges FinMin to introduce simpler income tax return forms at the earliest

The Parliamentary standing committee on Finance has urged the Ministry of Finance to expedite the measures planned to simplify the process of filing income tax returns and introduce the proposed new format “at the earliest”, as per the report laid in the Parliament on July 27.

In its response, the finance ministry said that in a bid to make the process of filing returns more tax-payer friendly and less time-consuming, the ministry is working on introducing a common Income Tax Return form (ITR) form by merging all the existing forms except ITR 7.

“As a result of this new form, the time and energy of the taxpayer would be saved and he will be relived of the additional burden of going through all the parts of the ITR as is the requirement under the existing ITRs,” the ministry added.

The common ITR form was made public on November 1, 2022 seeking comments from stakeholders and the public at large. According to the proposal, all taxpayers, barring trusts and non-profit organisations, can use the common ITR form, which also includes a separate head for disclosure of income from virtual digital assets. And, while ITR-1 and ITR-4 would continue, individuals would also have the option to file returns of income in the common ITR form.