ITR Filing: Significant Changes in India Income Tax Return Forms for FY 2023-24

TheNewsay Staff — Sat, 03 Feb 2024 12:00:00 +0000

ITR Filing: Significant Changes in India Income Tax Return Forms for FY 2023-24 – What You Should Know. Filing your Income Tax Return (ITR) for the financial year 2023-24 (assessment year 2024-25) is expected to be more intricate. The latest adjustments in the ITR forms, revealed on February 2, bring new requirements for taxpayers despite prior efforts by the Income Tax (I-T) department to simplify the process. Here’s a summary of the key changes you need to be aware of:

Significant Changes in India Income Tax Return Forms for FY 2023-24

1. Increased Scrutiny on Deductions

The Income Tax Department, utilizing artificial intelligence, has tightened regulations on tax deductions. Taxpayers are now required to provide additional details on various fronts, including political party donations, disabled dependents, and high-value life insurance policies. The aim is to prevent false claims and ensure the accuracy of deductions under Section 80GGC.

Also Read: Significant Changes in India Income Tax Return Forms for FY 2023-24

2. Political Party Donations under the Scanner

Donations to political parties under Section 80GGC now require a meticulous breakdown. Taxpayers must provide not only the contribution amount but also details such as the mode of payment and the transaction number linked to bank transfers. This granular scrutiny aims to thwart any attempts at inflating claims for tax deductions.

3. In-depth Reporting on Life Insurance Policies

Taxpayers receiving annual bonuses from life insurance policies face a new reporting requirement. The ITR forms now feature 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, ushering in greater clarity on the taxation of life insurance proceeds.

4. 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.

Also Read:
ITR Filing Income Tax Return Forms for FY 2023-24
7 Key Advantages of e-Filing Income Tax Returns in India
Significant Changes in India Income Tax Return Forms for FY 2023-24

Photo: LiveMint

5. Crypto Investments and Online Winnings Disclosure

The rising prominence of virtual assets and online earnings has prompted the tax department to seek detailed disclosures. Taxpayers must now provide quarter-wise breakdowns of their crypto investments under ITR-1, 2, and 4. Moreover, online game winnings are now explicitly addressed in Schedule OS, ensuring a thorough examination of income from online games.

6. 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 aims to ensure transparency in financial transactions, with the turnover threshold for presumptive taxation under Section 44AD raised to INR 3 crores.

7. Companies Face Enhanced Reporting Requirements

ITR-6, tailored for companies, introduces several additional reporting requirements. These include 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.