Income-Tax Return Filing: Key Changes Notified in New ITR Forms for FY23-24

The income-tax (I-T) department has released new income-tax return (ITR) forms for the financial year (FY) 2024-25 and assessment year (AY) 2025-26. This year, a few changes have been introduced in these forms.

For instance, a significant change is about the choice of tax regime. The new ITR-1 form mandates taxpayers to specify whether they wish to opt for the old or new tax regimes.

After a new concessional tax regime was unveiled, it’s become a default option. However, taxpayers have the provision to opt-out and continue with the old regime by filing Form 10-IEA while filing the ITR-4 form.

Typically, ITR-1 is a simplified form for taxpayers with simple income structures. Individuals with income from profession or business, capital gains, or those claiming double taxation relief are not catered to through this form.

In addition, there are other eligibility criteria as well, which include being a resident individual, having a total income up to Rs 50 lakh, having an agriculture income up to Rs 5,000, and owning only one house property.

At the same time, ITR-4 (SUGAM) is specifically designed for individuals, Hindu Undivided Families (HUFs), and firms other than Limited Liability Partnerships (LLPs) who have opted for the presumptive taxation scheme under Sections 44AD or 44AE of the Income-Tax Act (ITA), 1961.

A few other significant changes include the addition of a new column in the ITR-1 and ITR-4 forms. The section is related to disclosing the amount eligible for deduction under Section 80CCH of the ITA.

Agniveers are eligible for SevaNidhi after completing their four-year job tenure by contributing 30% of their monthly earnings to the Agniveer Corpus Fund. The contribution is equally matched by the central government.

In the case of businesses opting for presumptive taxation under Section 44AD, there is ease in criteria. Besides, a new ‘receipts in cash’ column has been introduced to disclose cash turnover or cash gross receipts. The cash turnover limit for this scheme has been raised from Rs 2 crore to Rs 3 crore, subject to the condition that cash receipts do not exceed 5% of the total turnover or gross receipts of the previous year.

Similarly, the ITR-6 form, used by companies, has also changed the form of additional details. It will now require a few additional details from companies, including Legal Entity Identifier (LEI), Micro, Small, and Medium Enterprises (MSME) registration number, reasons for tax audit under Section 44AB, disclosure of winnings from online games taxable under Section 115BBJ, virtual digital assets.

In addition, the acknowledgement number and Unique Document Identification Number (UDIN) for audit reports under Section 44AB (tax audit report) and Section 92E (transfer pricing report) will be required to be stated. Legal Entity Identifier (LEI) is to be provided by companies seeking a refund of Rs 50 crore or above.

The deadline for income-tax filing for individuals is July 31, 2024.

To ensure prompt payments to MSMEs, a new clause disallows deductions under Section 43B of the ITA for any sums payable to micro or small enterprises that are not paid within the specified time window of the MSME Act.

The overall idea behind introducing these changes is to simplify tax compliance and bring in better transparency when it comes to tax reporting.