The Central Board of Direct Taxes (CBDT) has notified the income tax return (ITR) forms ITR-1 and ITR-4 for FY 2023-24 (AY 2024-25). Interestingly, the ITR forms have been notified seven months before the last date for filing them. The last date to file ITR for FY 2023-24 (AY 2024-25) is July 31, 2024 (unless this date is extended by the government). The notification was issued by the Income Tax Department on December 22, 2023.
Last year, the income tax department notified the ITR forms for FY 2022-23 (AY 2023-24) in February 2023 – just after the Budget 2023. This year ITR forms have been notified 3 months before the current financial year ends on March 31, 2024. It may be mentioned that taxpayers will not know their exact total income before the financial year ends.
ITR-1 is meant to be used by individuals meeting following criteria:
- Individuals being resident individual
- Total income from all sources not exceeding Rs 50 lakh
- Income sources can include – salary, income from one house property and other sources such as interest, dividends etc and agriculture income up to Rs 5,000.
However, an individual satisfying the following conditions cannot use ITR-1:
- being a director in a company, or
- has invested in unlisted equity shares or
- where there has been TDS on cash withdrawals by the person under section 194N or
- income tax has been deferred on ESOP
- Having income from sources other than those mentioned above such as capital gains, and income from two-house properties.
While filing ITR for FY 2023-24 (AY 2024-25), an individual will be required to specifically select the old tax regime in case he/she wants to opt for it. In the online ITR form, they will be required to ‘opt-out’ from under Section 115BAC – in layman’s terms from the new tax regime.
Budget 2023 has made the new tax regime as the default tax regime. Hence, unless an individual specifically opts out of the new tax regime, the online ITR form will automatically calculate the taxes using the income tax slabs of the new tax regime. The new tax regime disallows common deductions and tax exemptions such as HRA tax exemption, LTA tax exemption, Section 80C, 80D etc.
However, standard deduction of Rs 50,000 from salary income and deduction claimed under Section 80CCD (2) of the Income-tax Act is available under the new tax regime from FY 2023-24 (AY 2024-25). Section 80CCD (2) deduction is also available under the new tax regime on the employer’s contribution to the National Pension System (NPS).ITR-4 form is for those individuals, Hindu Undivided Families (HUFs) whose status is resident in India and having income from business and profession. This income should not exceed Rs 50 lakh in a financial year. Further, the income must be computed under Sections 44AD, 44 ADA, and 44AE.Those who are eligible to file for ITR-4 will also have to opt out of new tax regime in case they don’t want it, as the new tax regime will be the default regime in the ITR.