Ready for tax season? Watch to know latest changes in ITR forms
Taxpayers must now specify their tax regime choice in the new ITR-1 form, with the new concessional tax regime being the default option.
- Republic Business
- 2 min read
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Tax Tune-Up: The Income Tax Department has introduced updated Income Tax Return (ITR) forms for the financial year 2024-25 and assessment year 2025-26. These forms have undergone revisions, and being aware of these changes can facilitate smoother compliance.
One significant modification is related to the tax regime choice. In the new ITR-1 form, taxpayers must specify whether they opt for the old or new tax regime. The new concessional tax regime is the default option, but taxpayers can choose the old regime by filing Form 10-IEA alongside ITR-4.
Who qualifies for ITR-1 & ITR-4?
ITR-1 is designed for individuals with simple income structures and excludes those with business or profession income, capital gains, or double taxation relief claims. Eligibility criteria include being a resident individual, total income up to Rs 50 lakh, agriculture income up to Rs 5,000, and owning only one house property.
ITR-4 (SUGAM) caters to individuals, HUFs, and firms under the presumptive taxation scheme (sections 44AD or 44AE of the Income Tax Act).
Another notable change involves a new column in ITR-1 and 4 for disclosing the amount eligible for deduction under section 80CCH. This pertains to individuals in the Agnipath Scheme subscribing to the Agniveer Corpus Fund after 01-11-2022.
For businesses opting for presumptive taxation under section 44AD, a new column discloses cash turnover or cash gross receipts. The cash turnover threshold is increased from Rs. 2 crores to Rs. 3 crores, provided cash receipts don't exceed 5 per cent of the total turnover.
ITR-6 enhanced requirements
ITR-6, used by companies, now requires additional details, 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, and virtual digital assets.
The filing deadline for individuals is July 31st, and being informed about these changes can help taxpayers prepare documentation and file returns in a timely manner.
A new clause disallows deductions under section 43B of the Act for sums payable to micro or small enterprises not paid within the MSME Act's specified time limit, ensuring prompt payments to MSMEs.
In essence, these changes aim to simplify tax compliance and enhance transparency in tax reporting.