This time the Income Tax Department has issued new ITR forms three months in advance. The last date for filing returns is 31 July. Under the new form, taxpayers will have to provide information about all active bank accounts.
The new ITR-1 has incorporated the requirement to choose the tax regime. In the case of ITR-4, a taxpayer will be required to file form 10-IEA to opt out of the new tax regime.
So, if you do not respond in the negative to the question ‘Do you wish to exercise the option u/s 115BAC (6) of opting out of the new tax regime?’ in your ITR form, the new tax regime tax rates and conditions will come into play.
Per the notification, the forms will come into effect from April 1, 2024. Releasing the forms well ahead of the financial year end will enable taxpayers and consultants to comprehend and prepare in advance, ensuring they’re ready when the ITR filing window opens for income earned during financial year 2023-24.
The return filing date for assesses using ITR-1 or 4 is generally July 31. “Till a few years back, these forms used to be released in April/May, and the utility (software that helps fill the form) for filing the forms on the Income Tax portal used to be released in June and thereafter, in case there was any change, assesses had to rush at the last moment.
Minor changes in ITR-1
As far as new ITR forms are concerned, there haven’t been any significant modifications, only a few minor adjustments in the updated ITR forms.
ITR-1 (Sahaj): This form is simpler and typically used by resident individuals with income from salary, one house property, family pension, and other sources (like interest from bank and post office deposits), and agricultural income up to Rs 5,000. Put together, the individual’s total income for the financial year must not surpass Rs 50 lakh.
Remember, the ITR-1 form is not designed for those classified as Resident Not Ordinarily Resident (RNOR) or Non-Resident Indians (NRI). Additionally, individuals with earnings from sources like lotteries, race horses, or legal gambling cannot use this form.
Moreover, those with taxable capital gains, investments in unlisted equity shares, income from business or profession, or holding a directorial position in a company are not eligible to use ITR 1.
In the newly released ITR 1 for AY 2024-25, there are a few minor adjustments. Under `Part C – Deductions and Taxable Total Income’ a new field, 80CCH, has been added to allow deductions for contribution to the Agnipath scheme. Similarly, under `PART E – Other Information,’ where details of all bank accounts held in India at any time during the previous year (excluding dormant accounts) is captured, a new drop-down has been inserted for type of account, which was not there in the old ITR-1,” explained Chandak.
There is also a mention of the Agniveer corpus deductions under section 80CCH. “It states that individuals enrolled in Agnipath scheme and subscribing to Agniveer corpus fund on or after 1st Nov 2022 will be eligible for the 100 percent tax deduction of the total amount deposited in the Agniveer corpus fund,” said Sehgal.
Besides that, ‘Type of Bank Account’ has to also be disclosed by selecting from the dropdown provided by the e-filing utility. This may imply that in case a person has not carried out business/profession, but has a current account with a bank, he has to disclose the same and may be required to furnish the list of transactions separately,” added Jalan.
ITR-4 (Sugam) – detailed turnover break-up needed
This form is applicable to resident individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) with total income up to Rs 50 lakh , computed under the presumptive taxation scheme (sections 44AD, 44ADA, or 44AE). Similarly, like ITR-1, ITR-4 cannot be used by RNOR and non-resident Indians.
A person using this scheme to file returns can declare income at a stipulated percentage of gross turnover or receipts and, in turn, is relieved from the tedious job of maintenance of books of accounts, and also from getting the accounts audited. To know more about presumptive taxation scheme (PTS),
Return-filing using ITR-4 (Sugam): Contractual IT professionals, tuition teachers (academic, dance, or drawing), or those providing professional services from home can also opt for filing tax returns under the presumptive taxation scheme (PTS) if they have not maintained proper books of accounts, under Section 44ADA.
The one key change under ITR 4 issued is that one needs to break up of the turnover u/s 44AD and 44ADA into three categories. “One needs to give the breakup of the revenue “received through a/c payee cheques, or a/c payee bank drafts, or the bank electronic clearing system and prescribed electronic modes, besides details of cash receipts and any mode other than these.
Another change is that, “where the return has been filed in response to notice u/s 139 (9) /142 (1)/148/153C or order u/s 119 (2) (b), the unique number/document identification number (DIN) and date of such notice or order is not required to be entered anymore. This is a welcome move and makes it easier to fill the form,.