Electronic tax

Tax return forms for the 2021-22 fiscal year: 9 changes that require additional information from taxpayers

The Income Tax Department has notified the Income Tax Return Forms (ITR) for the 2021-22 fiscal year or AY 2022-23. A tax year (AY) is the year followed by the fiscal year and AY is the year in which income earned by an individual during the fiscal year is declared to the government and taxes are paid in result.

For the 2021-22 financial year, no major changes have been made to the ITR forms. However, few changes have been made that require the taxpayer to provide additional information when filing the ITR.

Here is an overview of the additional information you need to provide when filing your tax return this year.

  • Nature of retirees further categorized

ITR forms for the 2021-22 fiscal year require retirees to further specify the source of their pension. In the “Nature of employment” drop-down menu, retirees must choose as follows:

a) Retirees – CG for central administration retirees

b) Retirees – SC for state government retirees

c) Retirees – PSU for people receiving a public sector company pension

d) Retirees – Other. This includes the pension received by the individual as family pension, EPF, etc.

  • Declaration of accrued taxable interest on EPF accounts

As of the 2021-22 financial year, if an employee’s contribution to the Employees Provident Fund (EPF) account exceeds Rs 2.5 lakh in a financial year, interest earned on the excess contribution is taxable in the hands of the employee.

Chartered Accountant Naveen Wadhwa, DGM, Taxmann.com says, “Individuals who have contributed more than Rs 2.5 lakh in the financial year 2021-22 are required to report interest earned on the excess contribution. Excess interest should be reported in Schedule OS (Other Sources).”

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  • Date of purchase and sale of land/building

If you sold land/building between April 1, 2021 and March 31, 2022, then from this year it is mandatory to enter the dates of purchase and sale in the ‘Capital gains’ table of the form ITR.

Wadhwa says: “The mandatory disclosure of the date of purchase and sale is made so that the Income Tax Department can check whether the individual is eligible for the capital gains exemption under Sections 54, 54EC and 54F of the Income Tax Act 1961.”

  • Details by year of land/building improvement cost

Any renovations or improvements made to the home property will be considered a cost. This cost must be indexed and deducted from the sale price to calculate long-term capital gains. This year, a person must provide annual details of the cost of improvements to the home property when filing their ITR.

Wadhwa says, “In this year’s ITR forms, a person must provide three pieces of information, namely: the cost of the improvement, the year of the improvement, and the indexed cost of the improvement. person incurred the cost of the improvement in different fiscal years, then details by year should be provided.”

  • Details of acquisition cost and indexed acquisition cost

When reporting capital gains incurred during a financial year, a person was required to report only the indexed acquisition cost of the asset. However, this year, individuals are required to provide both the original acquisition cost and the indexed acquisition cost.

  • Additional information to support residency status when filing the ITR

It is mandatory to provide your residency status when filing the ITR. This year, if you are filing your tax return using ITR-2 or ITR-3, then you will need to choose the appropriate option to support your residency status. The options one has to choose are self-explanatory. For example, when a person opts for the status of “resident and ordinarily resident”, they will have to choose from one of the following options:

a) You were in India for 182 days or more during the financial year 2021-22,

b) You were in India for 60 days or more in the financial year 2021-22 and have been in India for 365 days or more in the previous 4 years, or

c) You are an Indian citizen, who left India, for the purpose of employment, as a member of the crew of an Indian vessel and who was in India for 182 days or more during the fiscal year 2021-22 and 365 days or more in the previous period 4 years or

d) You are an Indian citizen or a person of Indian origin and came to visit India during the financial year 2021-22 and were in India for:

i) 182 days or more in fiscal year 2021-22 and 365 days or more in the previous 4 years, or

ii) 120 days or more in the financial year 2021-22 and 365 days or more in the preceding 4 years, if the total income, other than income from foreign sources, exceeds Rs 15 lakh.

Also previously, ITR forms requested details related to an individual’s residency status. However, this year more specific details are being requested from taxpayers to ensure the correct residency status is entered.

  • Declaration of deferred taxes on ESOPs

As announced in Budget 2020, an employee of a start-up company, as referred to in Section 80-IAC of the Income Tax Act 1961, may defer payment or deduction of tax in respect of shares granted under ESOPs, on the terms specified. terms.

If an employee has elected to defer payment or deduction of tax, they must report the amount of deferred tax in the ITR.

Wadhwa says, “In the ITR forms for FY 2021-22, a schedule (ESOP deferred tax) has been inserted. A person will be required to provide the following information:

a) Amount of deferred tax in FY 2020-21 or AY 2021-22,

b) Date of sale of the specified securities and amount of the tax credit for this sale,

c) Date he ceased to be an employee,

d) Amount of tax to be paid during the 2021-22 financial year, and

e) Balance of the amount of deferred tax to be carried over to subsequent tax years”

  • Foreign assets and income from them must be declared for the calendar year 2021

Anyone with foreign assets and income from dividends, interest, etc. must be declared when filing the ITR. An individual can use ITR-2 or ITR-3 as applicable to them. A resident taxpayer is required to report their foreign assets on Schedule FA of the ITR form. Reporting of foreign assets is mandatory even if a taxpayer is a beneficial owner or has an interest in a foreign entity.

Wadhwa says: “In the ITR forms of the previous year, a person was required to disclose foreign assets according to the relevant accounting period. However, the relevant accounting period was not defined. This year, the ITR form defined the relevant accounting period, which is January 1, 2021 and December 31, 2021. Thus, any foreign assets held during the calendar year 2021 must be declared in the ITR.

  • Details of property sold outside India

If a person has sold a property outside of India, they will be required to provide the details of the buyer and the full address of the property being sold.