Changes in new Income Tax Return (ITR) forms you should know about

The Central Board of Direct Taxes (CBDT) has notified two new income tax return forms, ITR-1 (SAHAJ) and ITR-4 (SUGAM), for the Assessment Year 2024-25 with the last filing date set for July 31, 2024, unless extended. Usually issued in February or March, this time the forms have been released early to help taxpayers stay updated on the new changes, according to experts.

What's new or changed in the form? Now, you have to disclose all your bank accounts in the previous year along with the type of account. Another significant change is that the new regime is made the default regime, and you need to provide details if you wish to opt out.

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"The new ITR Form 1 has incorporated the requirement to choose the tax regime. For ITR 4, a taxpayer will be required to file form 10-IEA to opt out of the new tax regime," said Yeeshu Sehgal, Head of Tax Market at AKM Global, a tax and consulting firm.

ITR-1 is a simplified form for individuals with simple income structures. It does not cater to individuals with income from business or profession, capital gains, or those claiming double taxation relief. Additionally, there are other eligibility criteria such as being a resident individual, having a total income up to Rs 50 lakhs, agriculture income upto Rs 5,000 and owning only one house property.

A new column has been added to claim the deduction under section 80CCH, which states that individuals enrolled in the Agnipath scheme and subscribing to the Agniveer corpus fund on or after 1st Nov 2022 will be eligible for a 100% tax deduction of the total amount deposited in the Agniveer corpus fund," added Sehgal.

Another change in ITR 4 is a new column of “Receipts in cash” for disclosing the cash turnover in the tax return.

ITR-4 (SUGAM) is specifically designed for individuals, HUFs, and firms (other than Limited Liability Partnerships) who have opted for the presumptive taxation scheme under sections 44AD or 44AE of the Income Tax Act.

Under new forms, the 44AD Business Turnover limit is Rs 3 crore (if cash transactions are less than 5%). Similarly, under section 44ADA, professional receipts limit is Rs 75 lakhs (if cash transactions are less than 5%), said Tarun Kumar - Head of Direct Tax Practice at Coherent Advisors.

Why did CBDT release it so early, and how will it help taxpayers? "Releasing ITR forms 1 and 4 earlier is a welcome step by the CBDT. The forms are usually issued in February or March. This early release will surely help taxpayers stay updated on the new changes, prepare the documentation, and file the return much before time," said Sehgal.

Also read: Income tax department launches TIN 2.0: Simplified tax payments for same-day credit or refund