In an early Christmas surprise to taxpayers, the Central Board of Direct Taxes (CBDT) has unveiled the Income Tax Return (ITR) Forms 1 and 4 for the Assessment Year 2024-25. The forms are applicable for filing income tax returns related to earnings in the preceding year, spanning from April 1, 2023 to March 31, 2024.
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The unexpected early release of ITR Forms not only marks a departure from the usual schedule (February or March of the following Assessment Year), but also means taxpayers now have an extended timeframe to acquaint themselves with any alterations, gather essential documentation, and submit their returns with enhanced accuracy.
Below are some of key changes in the new ITR Forms vis-a-vis last year's ITR Forms.
New tax regime is now the default tax regime
The amendments introduced by the Finance Act 2023 have modified section 115BAC, designating the new tax regime as the default option for individuals, HUFs, AOPs, BOIs, and AJPs.
In the event that an assessee prefers not to adhere to the new tax regime, a conscious decision to opt out is required, and they can choose to be taxed under the traditional tax regime.
To avail of this choice, the assessee with income, excluding income from business or profession, needs to express their selected tax regime in the income tax return filed for the pertinent assessment year as per Section 139(1).
An assesse having income from a business or profession can also opt out of the new tax regime and switch to the old tax regime for a relevant year.
However, the assessee must exercise this choice using Form No. 10-IEA on or before the stipulated due date for filing the income tax return under Section 139(1).
New column added to claim deduction under section 80CCH
Columns for reporting the eligible deduction under Section 80CCH have been introduced in the amended versions of ITR forms 1 and 4.
The Finance Act 2023 incorporated Section 80CCH, specifying that individuals participating in the Agnipath Scheme and contributing to the Agniveer Corpus Fund from November 1, 2022, onwards are entitled to a tax deduction corresponding to the total deposited amount in the Agniveer Corpus Fund.
"Receipts in Cash" column added to ITR-4 to claim enhanced turnover limit
The CBDT has amended ITR-4 to include a new column of "receipts in cash” for disclosing cash turnover or cash gross receipts under the Schedule BP.
The Finance Act, 2023 has enhanced the turnover threshold limit from ₹2 crore to ₹3 crore for opting for the presumptive taxation scheme under Section 44AD if the receipts in cash do not exceed 5% of the total turnover or gross receipts for the previous year.
Additionally, the Act specifies that the definition of cash encompasses cheques or bank drafts that are not designated as account payee.
Similarly, amendments to Section 44ADA have raised the gross receipts threshold from ₹50 lakhs to ₹75 lakhs. This adjustment applies when cash receipts constitute less than 5% of the total gross receipts for the preceding year.
No change in the applicability of ITR forms
The CBDT has not amended Rule 12 of the Income-tax Rules, 1962, which outlines the criteria for the applicability of ITR forms to different classes of taxpayers and method of furnishing returns.
Hence, the ITR Form applicable for the Assessment Year 2024-25 will remain the same as applicable for Assessment Year 2023-24.
(Edited by : Priyanka Deshpande)
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