Changes introduced in New ITR-6 – Part 2

CBDT requires a Company (other than those claiming exemption u/s 11 & 12) to furnish it’s return of income in ITR-6. There have been some key changes introduced in the ITR-6 to be filed for FY 2023-24.

This is covered in a two part series –

1. Additional details to be updated in new ITR-6.

2. New Schedules & Disclosures to be furnished in ITR-6.

Part 1 was covered in a separate article. Click here to read.
This article covers Part 2.

NEW SCHEDULES & DISCLOSURES IN ITR-6

1. PAYMENTS OUTSTANDING TO MSME

Section 43B of the Income Tax Act, deals with specified deductions which are to be allowed only on a payment basis, even if the entity follows mercantile method of accounting.

These expenses which are disallowed in the current year shall be allowed as deduction in the year of payment. Part A of Schedule OI (Other Information) of ITR-6 consists of information wherein the assessee is required to furnish the details of any amounts disallowed under Section 43B in any previous year but allowable during the year.

The Finance Act 2023 has inserted a new clause (h) in Section 43B to provide that any sum payable to an MSME beyond time limit specified in Section 15 of the MSMED Act 2006, shall not be allowed as a deduction. Accordingly, a new column is inserted under Part A-OI (Other Information) to disclose the same.

2. DISCLOSURE OF INFORMATION ON CAPITAL GAINS ACCOUNT SCHEME

Schedule CG of ITR Form requires the assessee to provide information about the capital assets transferred during the year and the gain or loss accrued from the transaction.

In the newly notified ITR-6, Schedule-CG has been modified to gather more information pertaining to sums deposited in the Capital Gains Accounts scheme (CGAS).

The revised schedule now requires the inclusion of the following additional details towards CGAS:

• Date of deposit
• Account number
• IFS code

Until the previous Assessment Year, taxpayers were only required to provide details pertaining to the sum deposited in CGAS.

3. SCHEDULE FOR CONTRIBUTIONS U/S SEC 80GGC

Contribution to political party or electoral trust is allowed as a deduction u/s 80GGC. The new ITR-6 includes a new Schedule 80GGC, which requires the furnishing of the following details:

• Date of Contribution
• Contribution Amount
• Eligible Contribution Amount
• Transaction Reference Number
• IFS Code of the Bank

Unlike the previous ITR-6, the new ITR form requires the disclosure of additional information beyond just the amount eligible for deduction under Section 80GGC.

4. SCHEDULE FOR DETAILS FROM START-UP FOR DEDUCTION U/S 80IAC

An eligible start-up can avail deduction u/s 80IAC for 3 consecutive AY out of 10 AY by opting for it. These deductions are allowed subject to the fulfilment of certain conditions.

New ITR-6 includes a new Schedule which requires the following details :

• Date of incorporation of the Start-up
• Nature of business
• Certificate number
• First AY in which dedn. was claimed
• Amt. of dedn. claimed for current AY

Until the AY 2023-24, ITR-6 only required disclosure of information about the amount eligible for deduction under Section 80-IAC.

5. SCHEDULE FOR DEDUCTIONS U/S 80LA BY OFFSHORE BANKING UNITS OR IFSC

Offshore Banking Units and the International Financial Services Centres (IFSC) can claim deduction u/s 80LA in respect of certain incomes.

A Schedule Bank, a foreign Bank or a unit of IFSC is eligible to claim a deduction under this provision. In the case of a bank, 100% of the income is deductible for 10 consecutive AY.

In the case of a unit of an IFSC, 100% of income is deductible for 10 consecutive AY out of 15 AY.

A new Schedule 80LA has been inserted in the ITR-6 seeking the following details from the company:

• Type of entity
• Type of income of the unit
• Authority granting registration
• Date of registration
• Registration number
• First AY during which deduction is claimed
• Amount of deduction claimed for current AY

6. REPORTING OF ACCRETED INCOME IN SCHEDULE 115TD

A fund or institution approved u/s 10(23C) or registered u/s 12AB is liable to pay additional income tax on the accreted income, which arises on its conversion into a non-charitable form, failure to apply for renewal of registration, or on the transfer of assets on its dissolution to a non-charitable institution.

If an entity, such as a Section 8 company, gets converted into a form that is not eligible for registration under Section 12AB or approval under Section 10(23C), it will be ineligible to file its income tax return in ITR-7. It shall pay tax as per the normal provisions and report such income in ITR-6.

Additionally, it will be liable to pay tax on its accreted income, which will be levied at the maximum marginal tax rate. This tax is in addition to income tax, which is chargeable in the hands of the specified trust or institution.

Therefore, a new Schedule 115TD has been inserted in Form ITR-6 for the reporting of tax payable on accreted income. This schedule requires various details such as the computation of accreted income (FMV of total assets as reduced by the total liability), tax payable on accreted income and details of challans for deposit of tax on accreted income.

7. DISCLOSURE OF WINNINGS FROM ONLINE GAMES TAXABLE U/S 115BBJ

The Finance Act 2023 has inserted a new Section 115BBJ to tax winnings from online games, w.e.f. AY 2024-25.

A corresponding Section 194BA has also been inserted with effect from 01-04-2023 for the deduction of tax from the net winnings from online games. Thus, all winnings from online games on or after 1-4-2023 shall be taxable under Section 115BBJ and subject to TDS under Section 194BA.

To report such income in ITR-6, Schedule OS has been amended to disclose income by way of winning from online games chargeable under Section 115BBJ.

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CA Chockalingam K

Partner at Chockalingam Unnamalai & Associates

Chockalingam is a Fellow member of the Institute of Chartered Accountants of India and holds a Dip. in IFRS (ACCA). He has a professional experience of 15 years in the Industry. Since his formative years as a CA in Industry, Chocksi (as he is fondly referred to by fellow collogues) has been keen on developing his skill sets in Financial Process Management and Tax Practice. His experience at Shell Plc for over 12 years gave him adequate exposure to the process management best practices across the Company.

With a 15 year experience in the Industry, Chocksi decided to commence his practice after the “Entrepreneurial Bug” bit him ! He is the Founder Partner of Chockalingam Unnamalai & Associates, Chartered Accountants.

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