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Tax Talk: Income Tax Return forms tweaked for additional details

Tax Talk: Income Tax Return forms tweaked for additional details

The CBDT recently notified ITR forms for Assessment Year (AY) 2022-23, corresponding to the financial year (FY) 2021-22. While applicability of the ITR forms to different categories of taxpayers does not change, certain changes merit attention.

Schedule FA requires reporting of foreign assets by a resident taxpayer. Under the Income Tax Act, the period for which income is taxable is the “previous year”, which is the FY ending March 31. Schedule FA required disclosure of assets held during the “accounting period”, which is the period adopted for closing of accounts and tax filings by foreign jurisdictions in which assets are located.

To eliminate the confusion, Schedule FA of new ITR forms requires reporting of foreign assets held at any time during the calendar year ending on December 31, 2021. If for instance, an asset is purchased for the first time in January 2022, it does not have to be reported in Schedule FA of ITR for FY 2021-22 but in ITR for FY 2022-23.

 

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