Understanding the Notable Modifications in India’s Income Tax Return Forms for FY 2023-24: ITR Filling

ITR Filing Income Tax Return Forms for FY 2023-24: Filing your Income Tax Return (ITR) for the financial year 2023-24 (assessment year 2024-25) is set to become more intricate. The latest changes in the ITR forms, released on February 2, present new challenges for taxpayers despite the Income Tax (I-T) department’s efforts to simplify the process using artificial intelligence. Here’s a rundown of the key changes you need to know:

ITR Filing Income Tax Return Forms for FY 2023-24

I. Increased Scrutiny on Deductions

The Income Tax Department has tightened regulations on tax deductions. Taxpayers now need to provide more details on various aspects, including political party donations, disabled dependents, and high-value life insurance policies. This aims to prevent false claims and ensure accurate deductions under Section 80GGC.

Also Read: ITR Filing Income Tax Return Forms for FY 2023-24

II. Political Party Donations under the Scanner

Donations to political parties under Section 80GGC require a detailed breakdown. Taxpayers must now specify the contribution amount, mode of payment, and transaction number for bank transfers. This scrutiny aims to prevent inflated claims for tax deductions.

III. In-depth Reporting on Life Insurance Policies

Taxpayers receiving annual bonuses from life insurance policies now face a new reporting requirement. The ITR forms include a dedicated column for declaring bonus payments received during the financial year. Additionally, individuals must disclose whether money received from high-premium life insurance policies is taxable, bringing clarity to the taxation of life insurance proceeds.

Also Read: ITR Filing Income Tax Return Forms for FY 2023-24

IV. Comprehensive ESOP Reporting

Employees with stock options from select startups now face a more comprehensive reporting process. Alongside tax amounts and linked years, taxpayers must provide the PAN of the eligible startup and the Department for Promotion of Industry and Internal Trade (DPIIT) registration number to claim ESOP-related tax benefits.

V. Crypto Investments and Online Winnings Disclosure

The growing significance of virtual assets and online earnings prompts detailed disclosures. Taxpayers must now provide quarter-wise breakdowns of their crypto investments under ITR-1, 2, and 4. Additionally, online game winnings are explicitly addressed in Schedule OS, ensuring a thorough examination of income from online games.

VI. Cash Turnover Disclosure in ITR-4

For businesses filing under ITR-4, a new column requires the disclosure of cash turnover or gross receipts. This ensures transparency in financial transactions, with the turnover threshold for presumptive taxation under Section 44AD raised to INR 3 crores.

Also Read: ITR Filing Income Tax Return Forms for FY 2023-24

VII. Companies Face Enhanced Reporting Requirements

ITR-6, designed for companies, introduces additional reporting requirements, including the Legal Entity Identifier (LEI), MSME registration number, reasons for tax audits under Section 44AB, disclosure of winnings from online games taxable under Section 115BBJ, and details on virtual digital assets.

VIII. Emphasis on Timely Payments to MSMEs

ITR-6 now includes clauses requiring companies to report sums payable to micro or small enterprises, emphasizing the importance of timely payments.

As the ITR filing season approaches, taxpayers need to pay meticulous attention to the changes introduced by the CBDT.

Also Read: ITR Filing Income Tax Return Forms for FY 2023-24

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