The Central Board of Direct Taxes (CBDT) has issued two new income tax return forms for the Assessment Year 2024-25, ITR-1 (SAHAJ) and ITR-4 (SUGAM), with the latest filing date set for July 31, 2024, unless extended. Normally given in February or March, the forms were provided early this time to enable taxpayers to stay up to current on the new developments, according to experts.
What is new or different about the form? You must now declare all of your bank accounts from the previous year, as well as the type of account. Another notable difference is that the new regime is now the default, and you must give information if you want to opt out.
"The new ITR Form 1 includes the requirement to select a tax regime." To opt out of the new tax regime for ITR 4, a taxpayer must file form 10-IEA," stated Yeeshu Sehgal, Head of Tax Market at AKM Global, a tax and consultancy firm.
ITR-1 is a streamlined form for individuals with straightforward income arrangements. Individuals with business or professional income, capital gains, or those claiming double taxation relief are not eligible. Other eligibility criteria include being a resident individual, having a total income of up to Rs 50 lakhs, agricultural revenue of up to Rs 5,000, and owning only one dwelling 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 November 1, 2022, will be eligible for a 100% tax deduction on the total amount deposited in the Agniveer corpus fund," Sehgal added. Another change in ITR 4 is the addition of a new column called "Receipts in cash" for reporting cash turnover in the tax return.
Individuals, HUFs, and corporations (other than Limited Liability Partnerships) that have chosen the presumptive taxation system under sections 44AD or 44AE of the Income Tax Act should use ITR-4 (SUGAM).
The 44AD Business Turnover limit under the new forms is Rs 3 crore (if cash transactions are less than 5%). Similarly, according to Tarun Kumar, Head of Direct Tax Practice at Coherent Advisors, the professional receipts limit under section 44ADA is Rs 75 lakhs (assuming cash transactions are less than 5%).
Why was CBDT released so soon, and how will it benefit taxpayers? "The CBDT's earlier release of ITR forms 1 and 4 is a welcome step." Forms are often distributed in February or March. This early publication will undoubtedly assist taxpayers in staying up to date on the new developments, preparing documentation, and filing returns on time," said Sehgal.
