CBDT Releases New ITR Forms And Key Changes For 2024-25; Find Details Here

The Central Board of Direct Taxes (CBDT) has released the Income Tax Return (ITR) Forms 1 and 4 for the Assessment Year 2024-25 earlier than the usual schedule. This early release not only bucks the trend of February or March launches but also provides taxpayers with an extended period to familiarize themselves with changes, gather necessary documents, and file their returns with increased accuracy.

One of the most significant changes in the new ITR Forms is the defaulting of the tax regime introduced by the Finance Act 2023. Section 115BAC now designates the new tax regime as the default option for individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons (AJPs). If an assessee chooses to stick with the traditional tax regime, a conscious decision to opt-out is required.

For those with income, excluding income from business or profession, the chosen tax regime needs to be expressed in the income tax return filed for the relevant assessment year under Section 139(1). If an assessee has income from a business or profession, they can also opt out of the new tax regime, but the choice must be exercised using Form No. 10-IEA on or before the stipulated due date for filing the income tax return under Section 139(1).

The amended versions of ITR Forms 1 and 4 introduce a new column for claiming a deduction under Section 80CCH. This change is in line with the Finance Act 2023, which states that individuals participating in the Agnipath Scheme and contributing to the Agniveer Corpus Fund from November 1, 2022, onwards are eligible for a tax deduction equal to the total deposited amount in the Agniveer Corpus Fund.

ITR-4 sees a significant update with the addition of a "receipts in cash" column, catering to the disclosure of cash turnover or cash gross receipts under Schedule BP. The Finance Act 2023 has raised the turnover threshold limit from Rs 2 crore to Rs 3 crore for opting for the presumptive taxation scheme under Section 44AD, provided cash receipts do not exceed 5% of the total turnover or gross receipts for the previous year.

It's noteworthy that the Act now defines cash to include cheques or bank drafts not designated as account payee. Moreover, amendments to Section 44ADA have increased the gross receipts threshold from Rs 50 lakhs to Rs 75 lakhs, applicable when cash receipts constitute less than 5% of the total gross receipts for the preceding year.

Despite these changes, Rule 12 of the Income-tax Rules, 1962, governing the applicability of ITR forms to different classes of taxpayers and methods of furnishing returns, remains unchanged. Consequently, the ITR Form applicable for the Assessment Year 2024-25 will stay the same as that for Assessment Year 2023-24.

This early release of ITR Forms and the accompanying changes present a unique opportunity for taxpayers to prepare diligently and make informed decisions about their tax strategies. As the year comes to a close, individuals and entities can now navigate the tax landscape with enhanced clarity, ensuring compliance with the latest regulations and maximizing their financial benefits.