The income tax department has notified new Income Tax Return (ITR) forms for the financial year 2024-25 and assessment year 2025-26. These forms have undergone a few changes this year, so knowing them in advance can facilitate better compliance.
One significant change is related to the choice of tax regime. The new ITR-1 form requires taxpayers to specify the tax regime they choose to follow: old or new. After the introduction of a new concessional tax regime, it’s become a default option. However, taxpayers have the provision to opt-out and stay with the old regime by filing Form 10-IEA while filing ITR-4.
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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 lakh, agriculture income up to Rs 5,000 and owning only one house property.
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.
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Another notable change is the addition of a new column in the ITR-1 and 4 forms. This section is for disclosing the amount eligible for deduction under section 80CCH of the Income-tax Act. Agniveers are eligible for SevaNidhi after completing their 4-year job tenure by contributing 30% of their monthly earnings to the Agniveer corpus fund. The contribution is equally matched by the government.
“A new column has been added in ITR 1 and 4 to furnish the amount eligible for deduction under section 80CCH of Income-tax act for the deductions allowed to the individuals enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 01-11-2022,” said Yeeshu Sehgal, Head of Tax Market, AKM Global, a tax and consulting firm.
For businesses opting for presumptive taxation under section 44AD, there is ease in criteria. A new ‘receipts in cash’ column has been added to disclose cash turnover or cash gross receipts. The cash turnover threshold for this scheme has been increased from Rs. 2 crores to Rs. 3 crores, subject to the condition that cash receipts don’t exceed 5% of total turnover or gross receipts of the previous year.
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ITR-6, used by companies, has also gone through changes requiring additional details. “In ITR 6 which is meant for companies, the form will now require few additional details from companies, including Legal Entity Identifier (LEI), MSME registration number, reasons for tax audit under section 44AB, disclosure of winnings from online games taxable under section 115BBJ, virtual digital assets. Also, acknowledgment number and UDIN for audit reports under section 44AB (tax audit report) and section 92E (transfer pricing report) will be required to be mentioned. Legal Entity Identifier (LEI) is to be provided by companies seeking a refund of Rs 50 crores or more.”
The income tax filing deadline for individuals is July 31st. The above-mentioned points can help help taxpayers to stay updated on the new changes, prepare the documentation, and file the return much before time.
Lastly, to ensure prompt payments to MSMEs, a new clause disallows deductions under section 43B of the Act for any sums payable to micro or small enterprises, which are not paid within the specified time limit of the MSME Act.
Overall, these changes are designed to simplify tax compliance and foster better transparency in tax reporting.
