The new ITR forms for fiscal years 2022-23 or 2023-24 are largely the same as the previous years, with some additional details such as virtual digital asset (VDA) assets and tweaks for the new regime. is required. This article describes the changes to his ITR form for 2023-24.
The new ITR form will be effective from 1 April 2023. Here are the changes to the ITR form:
- there is No change on the ITR-1.
- Virtual Digital Assets: Details of virtual digital assets (VDAs) must be reported. All forms except ITR1 include a new schedule for reporting income from virtual digital assets under the Capital Gains heading. You must report the date of acquisition, date of transfer, cost of acquisition, and proceeds received from the sale of VDAs. Income from VDAs must be reported quarterly.
- new tax systeme: new survey on ITR 3 and ITR 4 Added to determine if the taxpayer has opted out of the new tax regime in the last few years.
- Income from trading Intraday and delivery based trades must also be branched and reported accordingly in ITR3/ITR5/ITR6.
- Salary and income from other sources: Added new disclosures to Retirement Benefit Account Income. You must disclose taxable income for which Section 89A relief was claimed in any prior year.
- Common ITR Form: The CBDT released a common ITR form for public consultation in November 2022, but the notified new form is a separate ITR form and will have to wait for the common ITR.Our article covers the new draft of the common income tax return
- The deadline for filing income tax returns for tax year 2023-24 or fiscal year 2022-23 is 31 July 2023.
Virtual Digital Assets, Taxes, ITR
Effective April 1, 2022, a new Section 115BBH will be introduced for the taxation of virtual currencies and other VDAs (Virtual Digital Assets), and a new Section 194S will be introduced for the deduction of TDS for transfers of Virtual Digital Assets.
Pursuant to Section 2(47)(A) of the Income Tax Act, Virtual Digital Assets (VDA) include cryptocurrencies, non-fungible tokens (NFTs) and other digital assets notified by the Central Government in the Official Gazette.
- If the total remittance amount during a fiscal year exceeds INR 10,000, the person responsible for remittance of virtual currency is required to deduct 1% TDS under Section 194S. The above limit is INR 50,000 for a specific person.
- Income from the transfer of cryptocurrencies, NFTs and other virtual digital assets is taxed at a flat rate of 30%.
- Capital Gains = Full Consideration (Selling Price) – Acquisition Cost (Purchase Price)
- VDA transfer deduction
- Taxpayers cannot claim costs or benefits on such income.
- Taxpayers can claim the cost of acquisition, i.e. the purchase price, as a deduction from their income.
Therefore, taxable income = sales price – purchase price.
- Losses from cryptocurrency transfers cannot be offset against other income. It cannot be carried over to the following year.
- Losses under other sources of income cannot be offset against gains from cryptocurrency transfers
- Gifts of cryptocurrencies, NFTs, or other VDAs are taxable to the recipient.
If you earned income from virtual currencies or other virtual digital assets in 2022-23, you will need to report such income on the separate schedule provided in the new ITR form. The details you need to provide include details such as date of acquisition, date of transfer, era name of taxable income (capital gains), etc. If you received virtual currency/VDA as a gift, you will need to provide details of the tax paid on the transfer of assets.
![Cryptocurrency VDA tax reporting on ITR form](https://www.bemoneyaware.com/blog/wp-content/uploads/2023/02/itr-forms-vda-ay-2023-24-changes.jpg?x74955)
Cryptocurrency VDA tax reporting on ITR form
new tax system
A new tax regime was introduced from 1 April 2020 to simplify taxes and reduce the compliance burden for taxpayers. The main difference between the old tax system and the new tax system is the income tax slab rate and the ability to claim exemptions and deductions. In the Union Budget 2023-24, tax slabs have been revised to match the new regime, among other changes.
Taxpayers now have the option of sticking with the old tax slab with the deduction and opting for the new tax slab without the deduction. Which one should you choose? Those who take advantage of deductions such as mortgage interest, health insurance, and PPF should be evaluated as the old system can prove more tax efficient.
For more information, see the article Old or new tax regime?
![New or old tax regime for ITR3/ITR4](https://www.bemoneyaware.com/blog/wp-content/uploads/2023/02/new-tax-regime-ITR3-ITR4.jpg?x74955)
New or old tax regime for ITR3/ITR4
![New or old tax regime for ITR1/ITR2](https://www.bemoneyaware.com/blog/wp-content/uploads/2023/02/new-tax-regime-ITR1-ITR2.jpg?x74955)
New or old tax regime for ITR1/ITR2
To choose between old and new tax regimes
- Calculate all deductions you take
- Find your taxes using the old system.
- Find your taxes using the new system
- spot the difference
- If it’s worth it, check what documents you need to claim. For example, if you want to save on insurance policies, understand payment frequency, returns, etc.
![](https://www.bemoneyaware.com/blog/wp-content/uploads/2020/07/old-new-tax-regime.jpg?x74955)
Slavic tax rates in the old and new tax systems
Trading, Income Tax, ITR
Traders buy and sell stocks and securities to make quick profits from price fluctuations. Trading income consists of equities (delivery, intraday, F&O), commodity trading, currency trading and others.
From 2023-24, Income from trading should branch to Intraday trading and delivery trading It is also reported in ITR3/ITR5/ITR6 accordingly
Our article, Income Tax on Stock Sales: Transactions, Capital Gains, and ITR, explains this in more detail.
- stock: Stocks sold may be treated as either capital gains or business income.
- Intraday trading means buying and selling stocks on the same day. Income from intraday trading of stocks is Speculative business income and taxes are head PGBP (profit and profit from business and profession).
- Income from F&O trading is Non-speculative business income. Non-speculative business income is taxed at the Slavic rate.
- If a trader has significant stock trading activity that involves regular trading of stocks or securities or futures or options during the year, income from such activity is classified as business income.
- If the trading volume is low and it is not a regular activity, income from such activity is classified as capital gains
- All other forms of transactions are considered business income according to income tax.
- Tax audit applicability is determined based on the transaction volume and its profit or loss. For stock traders, tax audits are applicable in the following situations:
- If the transaction turnover is up to INR 2 Cr, the taxpayer has suffered a loss or profit is less than 6% of the transaction turnover and gross income exceeds the basic exemption limit.
- If the transaction turnover exceeds INR 2 Cr up to INR 10 Cr and the taxpayer suffers a loss or profit is less than 6% of the transaction turnover.
- If the transaction turnover is above INR 2 Cr and up to INR 10 Cr, the profit is not less than 6% of the transaction turnover and the taxpayer will not opt for the estimated taxation scheme under Sec 44AD.
- Trading volume is over INR 10 Cr.
- If transaction income is treated as business income, it is important to calculate transaction turnover in order to determine the applicability of a tax audit in accordance with the Income Tax Act.
transaction type Trading Volume Calculation Stock intraday trading absolute profit Futures and options trading (stocks, commodities, currencies) absolute profit Stock Delivery Transactions and Mutual Fund Transactions Sales amount
advance tax
If the trader’s or investor’s tax liability is expected to exceed Rs. For 10,000, you have to calculate and pay the tax in advance. This is to avoid interest charges under Sections 234B and 234C.
Advance taxes must be paid in quarterly installments on June 15th, September 15th, December 15th and March 15th.
However, if the trader opts for the 44AD estimated taxation, the full amount of the advance tax must be paid in one installment by March 15th.
Submission of ITR
- If a trader has income from capital gains, they must file an ITR-2.
- If the trader has business income, they must file an ITR-3.
- Traders opting for the presumptive taxation scheme are required to file an ITR-4 on the Income Tax website.
Income from Retirement Benefit Section 87A
If I work in a country other than India for many years, contribute to that country’s retirement benefits, and then return to India, how will my retirement benefits be taxed? I came. He is a non-resident of India and contributed to a US retirement benefit account while a resident of India as per Indian income tax laws.
The Finance Act of 2021 inserted new Section 89A into the Income Tax Act of 1961 (ITA) to provide relief for residents with income from foreign retirement benefit accounts.
According to Section 89A,
- Income from accounts opened abroad is not taxed on an accrual basis. Foreigners tax his income upon withdrawal.
- This amendment is effective April 1, 2022 and applies to Assessment Year (AY) 2022-23 and later AYs.
- USA, UK, Canada, Northern Ireland is a Section 89A notified country according to the Central Direct Tax Commission (CBDT).
- CBDT also notified Rule 21AAA and Form 10-EE Seek relief under Section 89A with respect to income from a foreign retirement fund.
- Added new disclosures to Retirement Benefit Account Income. You must disclose taxable income for which Section 89A relief was claimed in any prior year.
![ITR Retirement Income](https://www.bemoneyaware.com/blog/wp-content/uploads/2023/02/income-from-retirement-benefit.jpg?x74955)
ITR Retirement Income
Types of ITRs
Taxpayers are currently required to file ITR-1 through ITR-7 income tax returns, depending on the type of individual and the nature of their income.
The government is proposing a common ITR by consolidating all existing income returns except ITR-7. However, currently he will continue ITR-1 and ITR-4. This will give such taxpayers the option to file their returns on either the existing forms (ITR-1 or ITR-4) or the proposed Common ITR at their convenience.
![Different types of ITR forms](https://www.bemoneyaware.com/blog/wp-content/uploads/2022/11/Types-of-itr.png?x74955)
Different types of ITR forms
Related article: