Context: Recently, the Central Board of Direct Taxes (CBDT) has proposed a single income tax return (ITR) form for all taxpayers.
About ITR forms :
- There are seven kinds of ITR forms, which are used by different categories of taxpayers. They are as follows:
- ITR Form 1, called ‘Sahaj’, is for small and medium taxpayers. Sahaj forms can be filed by individuals who have an income up to Rs 50 lakh, with earnings from salary, one house property/ other sources (interest etc).
- ITR-2 is filed by people with income from residential property.
- ITR-3 is intended for people who have income as profits from business/ profession
- ITR-4 (Sugam) is, like ITR-1 (Sahaj), simple forms, and can be filed by individuals, Hindu Undivided Families (HUFs) and firms with total income up to Rs 50 lakh from business and profession.
- ITR-5 and 6 are for limited liability partnerships (LLPs) and businesses respectively.
- ITR-7 is filed by trusts and non-profit organisations.
Changes that has been proposed:
- All taxpayers, barring trusts and non-profit organisations (ITR-7), will be able to use a common ITR form, which will include a separate head for disclosure of income from virtual digital assets.
Rationale behind bringing one Nation one OTR form:
- The proposed draft ITR takes a relook at the return filing system in tandem with international best practices.
- The draft form aims to make it easier to file returns, and to considerably reduce the time taken for the job by individuals and non-business-type taxpayers.
- It intends the smart design of schedules in a user-friendly manner with a better arrangement, logical flow, and increased scope of pre-filling.
- It will also facilitate the proper reconciliation of third-party data available with the Income-Tax department vis-à-vis the data to be reported in the ITR to reduce the compliance burden on the taxpayers.
About Central Board of Direct Taxes (CBDT):
Functions and Organization:
- The Central Board of Direct Taxes is a statutory authority functioning under the Central Board of Revenue Act, 1963.
- The officials of the Board in their ex-officio capacity also function as a Division of the Ministry dealing with matters relating to levy and collection of direct taxes.
Historical Background of C.B.D.T.:
- The Central Board of Revenue as the apex body of the Department, charged with the administration of taxes, came into existence as a result of the Central Board of Revenue Act, 1924.
- Initially the Board was in charge of both direct and indirect taxes. However, when the administration of taxes became too unwieldy for one Board to handle, the Board was split up into two, namely the Central Board of Direct Taxes and Central Board of Excise and Customs with effect from 1.1.1964.
- This bifurcation was brought about by constitution of two Boards u/s 3 of the Central Board of Revenue Act, 1963.
Composition and Functions of CBDT:
The Central Board of Direct Taxes consists of a chairman and following six Members: –
- Member (Income Tax & Revenue)
- Member (Legislation)
- Member (Admn.)
- Member (investigation)
- Member (TPS & system)
- Member (Audit & Judicial)
Source: Indian Express
Previous Year Questions
Q.1) With reference to the ‘Banks Board Bureau (BBB)’, which of the following statements are correct? (2022)
- The Governor of RBI is the Chairman of BBB.
- BBB recommends for the selection of heads for Public Sector Banks.
- BBB helps the Public Sector Banks in developing strategies and capital raising plans.
Select the correct answer using the code given below:
- 1 and 2 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3