The Central Board of Direct Taxes (CBDT) has notified changes in ITR-7 for the assessment year (AY) 2023-24 relevant to the previous year 2022-23. These changes have been made through the Income-tax (Twenty-Seventh Amendment) Rules, 2023 notified on 31st October, 2023.
CBDT Income Tax Notification 94/2023 dated 31/10/2023: Revised ITR-7 for Charitable Trusts and Institutions from AY 2023-24
Key Changes
Separate reporting of 115BBI income
i) A new row has been inserted in Part B-TI of ITR-7 for separate reporting of income chargeable under section 115BBI at 30%
ii) This income will be deducted from the aggregate income chargeable at normal rates
Change in tax computation
The tax computation section in Part B-TTI has been amended to allow calculation of tax at normal rates on the revised aggregate income figure after excluding 115BBI income
Applicability
The changes are applicable from AY 2023-24 relevant to PY 2022-23.
Purpose of Changes
i) To allow separate reporting and calculation of tax on income chargeable at special rates under section 115BBI
ii) To correctly compute tax liability by applying normal rates only on income other than 115BBI income
Takeaway for Taxpayers
Taxpayers with 115BBI income will have to report it separately in ITR-7 for AY 2023-24. The normal tax rates will apply only on income excluding 115BBI income. This will result in proper computation of tax liability.