Income Tax Department Introduces Changes in ITR Filing Process for AY2023-24

With the approaching deadline for filing Income Tax Returns (ITR) for the financial year 2022-23, the Central Board of Direct Taxes (CBDT) has introduced significant changes in the ITR filing process. Taxpayers are advised to pay close attention to the modifications in Forms 1 and 4 as they navigate through the filing process.

In an unexpected move, the Income Tax Department has released the ITR forms for Assessment Year 2023-24 earlier than the usual timeline, providing taxpayers with an extended period to understand changes, gather necessary documents, and file returns more accurately. The deadline for filing ITR for the current financial year is December 31, 2023.

Key ITR Forms:

1. ITR Form 1 (Sahaj): This form is designed for small and medium taxpayers with a total income of up to ₹50 lakh. Residents with income from sources such as salary, one house property, other sources (like interest), and agricultural income up to ₹5,000 can use this form.
2. ITR Form 4 (Sugam): Form 4 is simplified to cater to a broad range of small and medium taxpayers, including individuals, Hindu Undivided Families (HUFs), and firms (excluding Limited Liability Partnerships). Residents with a total income of up to ₹50 lakh, including income from business and profession, can file Sugam.

Early Release Benefits:

The early release of ITR forms not only allows for better preparation but also ensures that taxpayers have ample time to navigate through the changes and file their returns with greater precision. This departure from the usual timeline provides taxpayers with an extended period to understand changes, gather necessary documents, and file returns more accurately.

Key Elements:

• For those filing ITR 1, indicating the choice of tax regime is sufficient. However, for ITR 4 filers, Form 10-IEA must be used to choose not to be a part of the new tax regime.
• A new column has been included in the ITR Forms 1 and 4 to claim deductions under Section 80CCH. This change follows the Finance Act of 2023, introducing Section 80CCH, allowing individuals joining the Agnipath Scheme after November 1, 2022, to claim a tax deduction for the amount deposited in the Agniveer Corpus Fund.

ITR-4 now includes a “Receipts in Cash” column to claim a higher turnover limit. The Finance Act of 2023 increased the turnover threshold from ₹2 crore to ₹3 crore for those opting for the presumptive taxation scheme under Section 44AD.