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ITR 2022-23: Three key changes to keep in mind while filing your return

Those filing ITR themselves this year need to keep in mind a few key things

Photo: Shutterstock

Photo: Shutterstock

BS Web Team New Delhi

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The Income Tax Return (ITR) filing season is approaching and many taxpayers are preparing to file their returns for the financial year ending 2022-23 (FY23). There have been a few changes made to the ITR forms this year (compared to last year) that taxpayers should be aware of before beginning to file.

Let's take a look at the major changes made in the latest ITR forms.

1. Reporting income from cryptocurrencies and virtual digital assets

Beginning on April 1, 2022, specific provisions in the Income Tax Act will tax VDA-related incomes. TDS under Section 194S is also applicable to payments received for crypto transactions.

The ITR forms have now been amended to include the required disclosures about VDA income. The taxpayer must also indicate whether the income from VDA is to be classified as business income or capital gains and disclose it under the appropriate head of income.

If you earned any income from cryptocurrencies during the financial year 2022-23, you should keep the necessary information on hand to avoid any complications when filing your return. The details that would be required include the date of acquisition, date of transfer, cost of acquisition, and sale proceeds.

Taxpayers should also double-check their Forms 26AS and AIS to ensure that income from VDAs for which tax has been deducted under the newly enacted Section 194S has been included in their ITR.

More: Calculate Income TAX

2. Details of ARN (Donation Reference Number) to claim Section 80G deduction

Have you made a donation that qualifies for an 80G deduction during fiscal year 2022-23? Now, simply having a donation receipt may not be enough to qualify for a tax deduction.

The ITR form now requires taxpayers to include the Donation Reference Number (referred to as ARN in the ITR forms) when donating to entities that are eligible for a 50 per cent deduction up to the qualifying limit. The ARN is a unique reference number that can be found on the donee entity's Form 10BE/receipt.

As a result, if your donation qualifies for the above deduction, you must ensure that your Form 10BE/donation receipt accurately displays the ARN.

Also Read: Filing tax returns for the first time? Make sure you read these handy tips

3. Other modifications

There are certain circumstances where tax is collected at the source (TCS) from the taxpayer. TCS, for example, is collected by the bank when remitting funds under the Liberalised Remittance Scheme. The taxpayer may claim such TCS as a credit/set-off against his income tax in his ITR.

In certain exceptional circumstances, the taxpayer may be eligible to claim TCS credit relating to another person against the taxpayer's tax liability. To address these exceptions, the ITR form now allows the taxpayer to claim such TCS credit relating to another person.

Beginning April 1, 2021, individuals who are Indian residents will be able to defer tax on income earned on foreign retirement benefits accounts from the year of accrual to the year of withdrawal from the account [Section 89A relief]. However, if the taxpayer later becomes a non-resident, the income on which relief was claimed under Section 89A in previous years will be taxable in the hands of the taxpayer.

Previously, the ITR forms required disclosure of income in the year of withdrawal from the retirement benefits account. However, the ITR forms for FY 22-23 now require disclosure of income on which relief under Section 89A was claimed in any previous years and which has become taxable during the year.

Other changes to the ITR forms for AY 2023-24 include additional disclosure relating to advances in the Balance Sheet in ITR-3, as well as a requirement to disclose the Securities and Exchange Board of India (Sebi) registration number if the taxpayer is a foreign institutional investor (FII) or foreign portfolio investor (FPI) registered with Sebi.

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First Published: Jun 28 2023 | 5:45 PM IST

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