The Income Tax Department has released new ITR forms three months earlier than usual. The deadline for filing returns is July 31st. Under the new form, taxpayers will need to provide information about all active bank accounts.
The new ITR-1 form now includes the option to choose the tax regime. For ITR-4, taxpayers will be required to file form 10-IEA to opt out of the new tax regime. If you do not choose to opt out of the new tax regime by responding with a “no” 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 apply.
The new forms will be effective from April 1st, 2024. Releasing the forms well in advance will allow taxpayers and consultants to prepare in advance for filing their ITRs for the financial year 2023-24.
Normally, the return filing date for ITR-1 or 4 is July 31st. Previously, these forms were usually released in April/May, and the utility software for filing the forms on the Income Tax portal used to be released in June. This advance release of the forms will ensure that taxpayers have enough time to file their returns and make any necessary changes before the deadline.
There haven’t been any significant modifications to the new ITR forms, only a few minor adjustments have been made. The ITR-1 (Sahaj) form is simpler and is 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. The individual’s total income for the financial year should not exceed Rs 50 lakh. However, this form is not suitable for Resident Not Ordinarily Resident (RNOR) or Non-Resident Indians (NRI) and individuals with earnings from lotteries, race horses, or legal gambling.
Moreover, individuals 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. Some minor adjustments have been made to the newly released ITR 1 for AY 2024-25. A new field has been added under ‘Part C – Deductions and Taxable Total Income’ to allow deductions for contribution to the Agnipath scheme. Similarly, under ‘PART E – Other Information,’ a new drop-down has been inserted for type of account under which details of all bank accounts held in India at any time during the previous year (excluding dormant accounts) are captured.
The ITR-4 (Sugam) 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). However, like ITR-1, it 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 is relieved from maintenance of books of accounts and getting the accounts audited.
Under ITR 4, one needs to provide a detailed breakdown of the turnover u/s 44AD and 44ADA into three categories. One must 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 the unique number/document identification number (DIN) and date of the notice or order are not required to be entered anymore if the return has been filed in response to notice u/s 139 (9) /142 (1)/148/153C or order u/s 119 (2) (b). This makes it easier to fill the form.
