Income Tax Return: common ITR form for all taxpayers; here's how will it work

The finance ministry has proposed a user-friendly common income tax return form for all taxpayers.

All taxpayers, except trusts and non-profit organisations, can file returns with the proposed new common ITR form, on which the Central Board of Direct Taxes (CBDT) has invited stakeholder comments by December 15.

Currently, there are 7 types of income tax return (ITR) forms which are filed by different categories of taxpayers.

ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) are simpler forms that cater to a large number of small and medium taxpayers. Sahaj can be filed by an individual having income up to Rs 50 lakh and who receives income from salary, one house property/other sources (interest etc).

ITR-4 can be filed by individuals, Hindu Undivided Families (HUFs) and firms with total income up to Rs 50 lakh and having income from business and profession.

ITR-2 is filed by people having income from residential property, ITR-3 by people having income as profits from business/ profession, ITR-5 and 6 by LLPs and businesses respectively, while ITR-7 is filed by trusts.

According to reports, ITR-1 and 4 would continue, but individuals would also have the option to file returns of income in the common ITR form.

The proposed ITR would be customised for the taxpayers with applicable schedules based on certain questions answered by them.