Income Tax Return 2023: In 2023, there are some changes and updates in the Income Tax field that taxpayers should be aware of while filing their Income Tax Return (ITR). It is important to be aware of these changes.
Income Tax Return 2023: In 2023, there are some changes and updates in the Income Tax field that taxpayers should be aware of while filing their Income Tax Return (ITR). It is important to be aware of these changes. Being aware of these changes will help you maximize the benefits and exemptions available to ensure proper filing
Filing your ITR with incorrect or outdated information also increases the chances of errors. Such mistakes can lead to tax audits or investigations by income tax authorities, leading to additional stress and potential financial liability. Keeping track of changes helps avoid these errors and ensures that your ITR is filed correctly. Being aware of the latest requirements ensures that you fill in your tax information correctly. Tarun Kumar Madan, head of tax at Coherent Advisors, details five changes you should be aware of while filing ITR for 2022-23.
Although not much has changed this year, there are still some significant aspects that you should consider while filing your ITR. For example, you need to account for income from crypto and other virtual digital assets (VDA), donation reference number to claim 80G deduction and account for turnover from intraday trading.
Income from virtual digital assets
Includes VDA crypto assets. Income generated from transfer of VDA will be taxed at the rate of 30 percent plus applicable surcharges and cesses. It is important to note that you cannot claim deduction for any expenditure other than the cost of acquisition if applicable while computing such income.
Schedule VDA requires details such as date of acquisition, date of transfer, category of income for tax, cost of acquisition in case of gift, and consideration received. If you have income from VDA, you cannot file ITR-1 or ITR-4. Instead, such income can be reported in Form ITR-2 or ITR-3. Such income can be taxed under the head of business income or capital gains.
Details of opting out of the new tax regime
An individual or a Hindu Undivided Family (HUF) has the option to opt for an alternative tax regime under Section 115BAC. If the assessee has income from business or profession, they can exercise this option but withdraw it only for one previous year excluding the year in which it was initially exercised. Once the option is withdrawn, the assessee is no longer eligible to exercise it under this section, unless they have no further income from their trade or profession. To opt out of the regime, the assessee has to submit Form 10-IE electronically through the e-filing portal.
In this year’s ITR form, the assessee has to provide details if they have opted out of section 115BAC in previous years. If the taxpayer has opted out, he has to give the details of the assessment year in which the said option is omitted, date of filing and acknowledgment number of Form 10-IE.
Details of ARN (Donation Reference Number) for claiming 80G deduction
If you are claiming a deduction under section 80G, it is essential that the donation receipt and donation certificate are readily available in Form 10BE. To claim the deduction, taxpayers need to provide details of their donations in the applicable ‘Schedule 80G’ in the ITR form.
One must ensure that the donation information is entered in the correct table. A new column has been added in ‘Table D’ in this year’s ITR form. ARN (Grant Reference Number) should be disclosed in this column for grants made to entities where 50 percent deduction is allowed subject to eligibility limits. The ARN should be obtained from the donation certificate issued in Form 10BE by the donating institution and mentioned in the ITR.
Disclosure of income on which section 89A exemption is claimed
Section 89A provides tax exemption on income from retirement benefit accounts held in a country specified by the authority. If a person has claimed such exemption, they have to provide relevant information on their fixed salary.
