On February 10, 2023, the Central Board of Direct Taxes (CBDT) announced the tax return forms for the financial year 2022–2023. This year, ITR forms were announced in advance, which is a very positive step toward making compliance easier. The disclosure and reporting requirements on tax return forms will be better understood by taxpayers. Here are the key changes:

Separate section for Crypto

Separate section for Crypto For the Assessment Year 2023-2024, there will be a separate schedule for reporting income from virtual digital assets (VDAs), such as cryptocurrencies, on individual income tax return (ITR) forms. ITR forms 1-6, ITR-V (verification form), and ITR acknowledgment form for AY 2023–24 are announced.

If you received any income from cryptocurrencies or other virtual digital assets during the financial year 2022–2023, you must report it on a separate schedule that is included in the new ITR forms. You must include specifics like the date of acquisition, the date of transfer, and the head under which income will be taxed (capital gain). If you received cryptocurrency or virtual currency as a gift, you must detail the amount of tax that was paid to transfer the asset.

Option to Disclosure Intraday Trading Income

The trading accounts now have a disclosure option for turnover and intraday trading earnings.

Tax Regime

To ascertain whether the taxpayer has previously opted for the New Tax Regime under Section 115BAC of the Income Tax Act, a new questionnaire has been added to ITRs 3 and 4.

Foreign Institutional Investor Disclosure

The taxpayers will have to disclose whether they are foreign institutional investors or foreign portfolio investors. The SEBI registration number of foreign institutional investors (FII/FPI) is a further disclosure requirement.

Capital Gain Disclosure

The Schedule CG (Capital Gains) in the new ITR 5 has been changed to reflect the deduction allowed under Section 48(iii) with respect to the capital gains subject to tax under Section 45(4) and attributable to the capital asset still being owned by the firm.

Dividend income is to be reported separately

The dividend income that is taxable under Section 2(22)(e) is sought to be reported separately on the new ITR forms.

New Schedule was inserted for reporting of tax-deferred on ESOP

The “Schedule: Tax Deferred on ESOP” has been added to the New ITR Forms. In the Schedule, disclosures are sought in respect of the date on which certain securities were sold and the amount of tax attributable to those sales; the Date of his departure from the company; Amount of tax due for the current assessment year; Date of his departure from the company; Amount of tax due for the current assessment year; Tax deferral balance to be carried forward to subsequent assessment years.

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