By Sandeep Jhunjhunwala
The CBDT not too long ago notified ITR types for Assessment Year (AY) 2022-23, similar to the monetary yr (FY) 2021-22. While applicability of the ITR types to completely different classes of taxpayers doesn’t change, sure adjustments advantage consideration.
Reporting of international belongings
Schedule FA requires reporting of international belongings by a resident taxpayer. Under the Income Tax Act, the interval for which revenue is taxable is the “previous year”, which is the FY ending March 31. Schedule FA required disclosure of belongings held through the “accounting period”, which is the interval adopted for closing of accounts and tax filings by international jurisdictions through which belongings are situated.
To eradicate the confusion, Schedule FA of recent ITR types requires reporting of international belongings held at any time through the calendar yr ending on December 31, 2021. If as an example, an asset is bought for the primary time in January 2022, it doesn’t need to be reported in Schedule FA of ITR for FY 2021-22 however in ITR for FY 2022-23.
Tax deferred on ESOP
To ease the burden of cost of taxes on train of ESOPs by workers of eligible startups or TDS by IMB recognised startup employers, Finance Act, 2020 had offered for deferral of TDS on perquisite worth of ESOP. The new ITR types present for a schedule for reporting particulars of such taxes deferred. This reporting would require taxpayers to compute tax on the perquisite worth of ESOPs within the AY through which shares have been allotted on train. This will permit I-T officers to watch through which yr taxes so deferred are literally required to be paid.
Tax credit score on international retirement advantages
The Finance Act, 2021 had inserted Section 89A, to supply aid from tax on withdrawal from abroad retirement funds by residents who had opened such funds as non-residents. Withdrawal from such funds had been taxed on receipt foundation within the international nation vis-à-vis accrual foundation in India leading to difficulties being confronted by taxpayers in claiming international tax credit score for taxes paid in international nations.
The new ITR types have amended Schedule S (ie, particulars of Income from Salary) which is able to permit taxpayers to say aid from taxation below Section 89A within the prescribed method, guidelines for that are but to be notified.
Additional disclosure for capital positive aspects
The new ITR types require extra disclosure in capital positive aspects schedule with respect to land and constructing which embody date of buy or sale, yr through which any enhancements had been made and separate disclosures for price of acquisition and listed price.
Crypto revenue
Some stakeholders have expressed considerations over the absence of a particular schedule in new ITR types for reporting crypto revenue. Authorities will make a provision within the ITR types to report crypto revenue when ITR types for FY 2022-23, being the primary yr of crypto tax regime, are notified.
NEW NORMS
— Schedule FA for reporting international belongings held in CY21
— New ITR type asks for computing tax on perquisite worth of ESOPs within the AY through which shares are allotted
— Schedule S amended to permit tax aid u/s 89A
— Additional disclosure in capital positive aspects schedule with respect to land and constructing
The author is accomplice, Nangia Andersen LLP. Inputs from Amita Jivrajani and Ankur Agarwal.
Source: www.financialexpress.com”