Changes in New Income Tax Return (ITR) Forms: What You Need to Know

Release of two new income tax return forms

The Central Board of Direct Taxes (CBDT) has announced the early release of two new income tax return forms, ITR-1 (SAHAJ) and ITR-4 (SUGAM), for the Assessment Year 2024-25, with a filing deadline of July 31, 2024.

Why this move?

This move is aimed at keeping taxpayers informed about the changes well in advance, a departure from the usual release timeframe in February or March. Read on to know key changes in the ITR forms.

Disclosure of Bank Accounts

Taxpayers are now required to disclose all their bank accounts from the previous year, specifying the type of account held.

Default New Regime

The new tax regime is now set as the default option. Taxpayers who wish to opt out of this regime need to provide specific details. For ITR-4, filing form 10-IEA is necessary to opt out of the new tax regime.

ITR-1 Changes

ITR-1, a simplified form for individuals with straightforward income structures, has incorporated the requirement to choose the tax regime.

Deductions under section 80CCH

A new column has been introduced to claim deductions under section 80CCH. This allows individuals enrolled in the Agnipath scheme and subscribing to the Agniveer corpus fund on or after November 1, 2022, to be eligible for a 100% tax deduction on the total amount deposited in the Agniveer corpus fund.

ITR-4 Changes

ITR-4 (SUGAM), designed for individuals, HUFs, and firms under presumptive taxation schemes, introduces a new column for disclosing Receipts in cash to report cash turnover in the tax return.

Business Turnover limit

The 44AD Business Turnover limit is set at Rs 3 crore under the new forms, provided cash transactions are less than 5%. Similarly, under section 44ADA, the professional receipts limit is Rs 75 lakhs, subject to cash transactions being less than 5%.

Significance of Early Release

The CBDTs decision to release ITR forms 1 & 4 ahead of schedule is considered a positive step. This early release allows taxpayers to stay updated on changes, prepare documentation, & file their returns well before the deadline, contributing to a smoother & more informed tax-filing process.