If you are a taxpayer and you are going to file your Income Tax Return (ITR), then there are some changes and updates in 2023 that you need to know about. Because, filing ITR with wrong or outdated information also increases the chances of mistakes. These mistakes can trigger a tax audit or investigation by a tax officer. This can lead to additional scrutiny, stress and potential financial liabilities. Let us take a look at the changes you should be aware of while filing ITR for 2022-23.
1. Reporting of Income from Virtual Digital Assets
CA Ajay Bagadia told that VDA i.e. Virtual Digital Assets includes crypto assets. There is taxation, surcharge and cess at the rate of 30 per cent on income generated from the transfer of VDA. It is important to note that while computing such income, you cannot avail deduction for any expenditure, except the cost of acquisition, if applicable.
According to Bagadia, Schedule VDA requires details such as date of acquisition, date of transfer, category of income chargeable to taxation, cost of acquisition in case of gift and consideration received. If your income is from VDA then you cannot file ITR-1 or ITR-4. Instead, ITR-2 or ITR-3 form will have to be filled. Such income can be taxed under business income or capital gains.
2. Details of exit from New Tax Regime
CA Abhinandan Pandey explains that an individual or a Hindu Undivided Family (HUF) has the option to opt for the alternate tax regime under section 115BAC. If the taxpayer has income from business or profession, he can exercise this option, but can withdraw it only once for the previous year, except the year in which it was initially exercised. Once the option is withdrawn, the taxpayer is not eligible to exercise it again under this section, unless he has any income from business or profession. To opt out of the arrangement, the assessee has to submit Form 10-IE electronically through the e-filing portal.
The assessee needs to provide details in this year’s ITR form if he has opted out of section 115BAC in earlier years. If the taxpayer has opted out, then he is required to provide the details of the assessment year.
3. Reporting of turnover from intraday trading
Profit or loss arising from intraday trading, which is treated as a speculative transaction, is subject to taxation under the head business income of capital gains. This year’s ITR form includes a specific section, Part A-Trading Account, where individuals are required to provide separate information in respect of their intraday trading activities. The ITR form now requires details such as turnover from intraday trading and income from intraday trading, which has been transferred to profit and loss account.
4. Donation Reference Number details for claiming 80G deduction
If you are claiming deduction under section 80G, it is necessary to have donation receipt and donation certificate in Form 10BE readily available. To claim the deduction, the details of your donation have to be given in the applicable ‘Schedule 80G’ in the ITR form.
CA Santosh Mitra informed that a new column has been added in ‘Table D’ in the current year’s ITR form. This column requires disclosure of ARN (Donation Reference Number) for donations made to institutions, where 50 per cent deduction is allowed subject to qualifying limits. The ARN should be derived from the donation certificate issued in Form 10BE by the institutions receiving the donation and the same should be mentioned in the ITR.
5. Disclosure of income
Section 89A provides tax relief on income from retirement benefit accounts held in specified countries by the authorities. In case a person has claimed such relief, he has to furnish the relevant information in the Schedule Salary.
