Three Noteworthy Changes In ITR Forms 1 & 4

The Income Tax Department has released the new ITR forms 1 and 4 for Assessment Year 2024-25, applicable to individuals and entities with annual total income up to ₹50 lakh. The forms were notified on Friday.

In a surprising and welcome move, the CBDT, acting as an early Santa Claus this year, introduced changes to the ITR Forms 1 and 4 for the Assessment Year 2024-25. These forms will be used for filing income tax returns for the income earned in the previous year 2023-24 (from 01-04-2023 to 31-03-2024).

When Are Income Tax Form Notified?

ITR forms are typically notified by the department in February or March, preceding the start of the next assessment year. However, this early release is a departure from the usual schedule. Taxpayers now have more time to understand the changes, collect required documents, and file their returns more accurately.

ITR Form 1 

(Sahaj) is designed for a significant number of small and medium taxpayers. Residents with an income of up to Rs.50 lakh, deriving earnings from salary, one house property, other sources (interest), and agricultural income up to Rs.5,000 can file Sahaj.

ITR Form 4 

(Sugam) is a simplified form catering to a broad range of small and medium taxpayers. Individuals, HUFs, and firms (excluding Limited Liability Partnerships (LLPs)), who are residents with a total income of up to ₹50 lakh, including income from business and profession, can file Sugam.

Key Changes in the New ITR Forms 1 and 4:

1) For those filing ITR 1, indicating the preferred tax regime is sufficient. However, individuals filing ITR 4 need to submit Form 10-IEA to opt out of the new tax regime.

2) New columns have been introduced in ITR Forms 1 and 4 to claim deductions under Section 80CCH. This amendment, as per the Finance Act 2023, allows individuals to claim a deduction for the net amount deposited in the Agniveer Corpus Fund. Provided these claimers must be enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after 01-11-2022.

3) ITR-4 now includes a "Receipts in Cash" column to claim an increased turnover limit. Following the amendments in the Finance Act, 2023, the turnover threshold for opting for the presumptive taxation scheme under Section 44AD has been raised from ₹2 crore to ₹3 crore. This applies if the receipts in cash do not exceed 5% of the total turnover or gross receipts for the previous year.

Also Read: Big Announcement by the Income Tax Department Regarding Income Tax Returns Form For Financial Year 2023-24 & Assessment Year 2024-25

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