Tax Revolution Unveiled! Explore the Game-Changing Income Tax Return Forms for 2024-25

The Income Tax Department has rolled out new Income Tax Return (ITR) Form 1 and ITR Form 4 for the assessment year 2024-25, introducing notable changes for taxpayers. Unlike the usual notification of new ITR forms in February or March, the government has provided this information well in advance, aiming to assist taxpayers in adapting to new disclosures and preparing the required documentation. Here are the key modifications for the upcoming assessment year:

1. Applicability Remains Unchanged:

  • ITR Form 1: Applicable to salaried individuals with income from one house property, family pension, etc.
  • ITR Form 4: Applicable to salaried individuals with additional income sources like capital gains, dividend income, income from multiple house properties, etc. Those with income from presumptive businesses or partnership firms can use ITR 3 and ITR 4.

2. Deduction for Agniveers:

  • Introduction of Section 80CCH in Budget 2023.
  • Allows tax deductions for contributions to the Agniveer Corpus Fund.
  • ITR 1 and ITR 4 amended to include a dedicated column for detailing deduction amounts under Section 80CCH.

3. Disclosure for Type of Bank Account:

  • New disclosure added to ITR-4 to specify the type of bank account.
  • Assessees required to disclose details of all Indian bank accounts held during the previous year, excluding dormant accounts.

4. Receipts in Cash Disclosure:

  • Addition of a specific column for cash receipts in the new ITR-4 Form.
  • Separation of cash receipts from other modes like cryptocurrency.
  • Enhances transparency and distinct reporting of cash transactions.

5. New Tax Regime Default Option:

  • Budget 2023 establishes the new tax regime as the default option.
  • Taxpayers must actively opt for the old regime if they choose it.
  • Section 115BAC (6) allows eligible assesses to opt out of the new tax regime.

6. Disclosure of Form 10-IEA Filing:

  • Assessees with income from business or profession must disclose the filing of Form 10-IEA within or after the due date.
  • Specific disclosure now required in the new ITR 1 and ITR 4 forms.

7. Continuation of Last Year’s ITR Changes:

  • Last year’s changes increased disclosures for business or professional income.
  • Specific disclosures about opting in or out of the new tax regime and advances from related parties.
  • Introduction of separate schedules for set-off of current-year capital losses and disclosure of income from Virtual Digital Assets (VDA) such as cryptocurrencies.

The modifications aim to streamline the tax filing process, provide clarity on income sources, and enhance transparency in financial disclosures. Taxpayers are encouraged to familiarize themselves with these changes for seamless compliance.

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