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.
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.
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. Agni veers are eligible for Seva Nidhi after completing their 4-year job tenure by contributing 30% of their monthly earnings to the Agni veer corpus fund. The contribution is equally matched by the government.
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.
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.
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.
The income tax filing deadline for individuals is July 31st.
Knowing these changes in the ITR forms can help the tax payer in better compliance. Overall, these changes are designed to simplify tax compliance and foster better transparency in tax reporting. This ensures that the information provided is accurate and in compliance with the tax regulations, reducing the risk of penalties or audits. It also provides a comprehensive and accurate record of a taxpayer’s financial history. It’s important for the taxpayer to be aware of these amendments in order to obtain the benefits as well as attend to the changes promptly – JSPCO
