Major Updates: Changes to ITR-1 Filing for AY 2024-25 Announced by Income Tax Department

The Income Tax Department of India for the assessment year 2024-2025 has considered certain vital changes in form ITR-1. Thus, these changes ultimately help to make the requirements for filing taxes more reasonable, as well as to strengthen the legal framework that prescribes accurate reporting of the taxpayer’s income and deductions. With these updates, what the department aims to achieve is the minimization of the mistakes that occur and the general flow that is provided to become more seamless. One of the most noted amendments is that there is more pre tax information filled in the ITR-1 form. By automatically dragging information into the Income Tax Department database, necessary details like the salary income, interest on savings, and other income will be populated without requiring the taxpayer to fill those details manually. This feature  helps in time management by cutting on the amount of time required to type the same data in different places, and hence reduce the number of mistakes.

Filling out the return will become easier as most of the information will be filled automatically by the software, but new disclosures about some income and deduction items will be required. For example, there will be certain parts where one will be required to declare and detail exempt income, agricultural income, and more. This steady addition of information is intended to enhance specific reporting on income as well as guarantee that the individual filers fully appreciate the tax rules. The department also has an easy filing and reporting process for senior citizens, so that they can file their returns easily. This involves particular areas, which cover the specific financial concerns, as well as the revenues that seniors need to consider during the process, to make tax filing as easy and simple as possible for them. ITR-1 is used by resident individuals who earn through salaries, pensions and house property income, and any other income only up to ₹ 50 lakhs.

Technically, the ITR-1, along with other returns filed by an individual without international source income, is to be filed on or before July 31 st of the assessment year. But, it is imperative for the taxpayers to file early in order to avoid last moments rush and any penalties that may come with it. ITR-1 form for AY 2024-25 will enhance tax complaints, especially since the process will be easier and less burdensome to the taxpayers. They should ensure that all information required by the form is well and appropriately filled to avoid major complications while filing for taxes.

Understanding ITR-1 Sahaj Form for Income Tax Filing FY 2024-25

There are different types of return forms for filing the income tax return out of which the simplest form is Sahaj Form or known as ITR- 1. It is designed for resident individuals where the total income of such individuals exceeds Rs 50 lakh in fiscal.

ITR filing for FY2024: 

It began this week for the AY 2024-25 & FY 2024 and will run till 31st July 2024. The time frame is set for taxpayers, whether independent or acting as a legal entity or as a group of people. ITR forms for the different types of taxpayers are predefined and different in nature. This is true especially when assigning various rates due to the source of income and profession of the taxpayer. 

The simplest form used is ITR-1 – Sahaj Form, When the total income of a person or an HUF does not exceed Rs. 50 lakhs and the total tax paid or refund claimed does not exceed Rs.10,000. It is designed for resident individuals who satisfy certain prescribed income standards on a current basis. It is very important to be aware that people who can file under this category are those whose gross total income for the financial year does not exceed Rs 50 lakhs. As we know there are certain other conditions to claim deduction u/s 24 which if not satisfied then loss from house property cannot be carried forward. We know that section 70 of income tax act permits to deduct only the actual amount of interest paid or Rs 15,000 whichever is greater. There is another condition to satisfy to claim the loss or deduction from house property that If the ITR is a clubbed return, this can only be so in the event that the spouse or the minor included in the return also earns an income to a tune of or less than the above-mentioned limit.

Also Read: Last Date for Filing Income Tax Returns in India 2024

Changes Introduced in ITR-1 for FY 2024-25

1. Tax Regime:

The Assessee filing their income tax return using the ITR-1 Form must mention their chosen tax scheme in the return. After the modification of the New Tax Regime and an addendum dictated by the Finance Act 2023 to Section 115 BAC, this new regime is the standard one today. This automatic application 

shall apply to the proposed persons including natural persons, HUFs, AOPs, and BOIs. To continue to apply the old tax regime as contemplated under section 115 BAC(6) requires an intention from the entities and this they do by opting out of it. When persons having income chargeable to tax under this Act from sources other than profits and gains arising from business or profession or from profession referred to in Section 44AA wish to opt for a particular tax regime, they have to file the returns of income for the assessment year relevant to the prescribed period under Section 139(1).

Also Read: Is the New Tax Regime More Beneficial?

2. Section 80 CCH:

To put it in simpler terms, newer provisions were added, and the Section 80 CCH was included by the Finance Act 2023. In this section, it is asked that any person who joins the Agnipath Scheme and pays for the Agniveer Corpus Fund after 1st of November, 2022, shall be allowed a deduction for the amount paid to the Agniveer Corpus Fund. Due to this change, soon after the issue of this instruction, tutors were informed that the detail regarding the amount eligible for deduction under Section 80 CCH has been added in a new column of the ITR Form 1.

3. Filing ITR-1

If details of any pre-filled information related to the Income Tax Return can be updated, the filing of the ITR-1 can also be done through the e-filing portal of the Income Tax Department. The individual taxpayers can also file their ITR-1 Form online through the official portal or the offline Excel instrument. Under the tab: ‘E-Filing’, the ITR-1 file is described along with steps that guides a user through the online filing process.

4. Pre-filled sections

Most of the sections in ITR-1 forms are auto-populated and their details need to be validated/ Modified before the form is submitted along with one self containing the summary of tax computation. There are three parts, including Personal Details, Gross Assessments, and Total Relief.

Also Read: Income Tax Return (ITR) Filing Tips for Individual and Business for the New Financial Year

Key Changes in ITR-1 for AY 2024-25

1. Enhanced Pre-filled Data

One of the most significant changes has been the improvement of the pre-filled data section. Previously, the ITR-1 form allowed only pre-filled information to the extent of salary details and interest earned on the Saving 

The Income Tax Department will now offer a wider range of data in the ITR-1 form itself. 

This includes details from:

• Form 16: 

Data on amount received from or relating to salary income, amount of deduction and tax paid.

• Form 26AS: 

Records for TDS, TCS, and other tax credits.

• Annual Information Statement (AIS): 

The various details regarding income in different manners.

This enhancement will help to minimize instances where data have to be entered manually this will help to minimize mistakes made while filing the documents and will also make the filing process faster.

2. Expanded Scope of Income Sources

I think that there are more areas through which income sources can be generated hence the importance of coming up with additional strategies to increase incomes for business.  In a positive development for Indian 

taxpayers, there are some new changes in the ITR-1 form and the new additions affect the scope of income sources to be reported in ITR-1 from the assessment year 2013-14. 

Taxpayers must now disclose:

• Dividend Income: 

Even if these are obtained from mutual funds or stocks, every form of dividend income must be disclosed.

• Interest Income: 

Interest received on savings accounts, FDs, and other investments have been provided with line items and amounts indicating the details of each part.

• Capital Gains: 

Well, though any user, being a resident and earning his or her income through salary only, can file ITR-1, one needs to understand that certain other income in the nature of capital gains though small in amount have to be disclosed.

3. Heading: 

Simplified Reporting for House Property I hope this topic of research will help me draft all the subtopics and hypotheses to be covered in this work as follows.

• Exempted income:

Reporting of income from house property is done in a simpler way than before. 

• Standard Deduction: 

Tax exemption allowed for the cost of acquisition or improvement of any asset or in respect of insurance premium paid on any property.

• Joint Ownership: 

Improvement of the joint details of property possession so that the correct trend of income could be distributed equally among the co-owners.

4. Digital Verification and E-filing Enhancements

Various procedures such as the process of digital verification has also been made easier to increase persons who use the e-filing option. 

New features include:

• Aadhaar OTP: 

Retaining the speed of instant Aadhaar OTP authentication for convenient filing.

• Pre-validated Bank Accounts: 

Early retrieval and pre-checking of bank details to facilitate an enhanced automated refund system for tax repayments.

5. New Deduction Categories

New categories for deductions have been introduced to encourage savings and investments

• Section 80 EEA: 

No deduction for undue benefit for interest on home loan for affordable housing.

• Section 80 EEB: 

Interest on loans taken for electric vehicles is also allowed as a deduction under section 57 of the Income tax Act.

They plan to create new categories which can offer even more tax deductions and at the same time can contribute to the effective use of natural resources.

Conclusion 

New changes in the Income Tax Department ITR-1 Filing relevant for the Assessment Year 2024-25: The Income Tax Department has made some conspicuous changes in the procedures of the ITR-1 filing process for the twelfth assessment year. These changes include utilizing new forms and incorporating new instructions alongside alterations to the forms; additional sections will be added to obtain more income and deduction information about taxpayers. These changes are aimed at improving the procedure of filing and exclusion of possible mistakes as well as at making taxpayers to declare all required information at the initial stage automatically. To avoid last-minute rush and ordeal of filling a large number of forms, taxpayers are advised to acquaint themselves with these changes well before the filing season. Thus, learning the new requirements can help taxpayers maximize the opportunities to maximize the benefits of recovery and minimize possible penalties and avoid cancerous contributions to the promotion of an efficient system. Therefore, tax payers must be abreast with these updates and in case of any complication on the filing of new forms, an individual should seek assistance from tax experts.

FAQ

• What are the important modifications done in the ITR-1 for the AY 2024-25?

The form ITR-1 for AY 2024-25 therefore incorporates new sections for reporting income, new guidelines regarding making accurate returns, and new compulsory fields for furnishing further details regarding deductions and exemptions.

• What are the changes that have been made in the present ITR-1 form compared to previous years?

Additional features include specific line fields for entering most important forms of income, specific points of deductions and exemptions to help effectively organize and record income and avoid mistakes.

• In what manner does these changes reduce its ease in filing ITR-1? 

Some of these improvements can be seen in the updated form and  The new form and the instructions will help to minimize on the mistakes that an applicant may make during the filing process, help the applicant to provide all the necessary information in an orderly manner and reduce the confusion which is caused by a form with a lot of blanks.

• What steps should be taken before making ITR 1 for assessing the year 2024-25? 

Study the new form and instructions carefully, collect all necessary documents containing the necessary information about income and deductions if necessary, consult with your accountant or other professional.

• What are the consequences of filing wrong ITR-1 or filing it in the wrong manner after the due date? 

Yes, there are provisions in the law which stipulate penalties in the case where ITR-1 is filed incorrectly or not filed on time. It is also vital to fill statutory returns in the right dimensions and within the lawful period to avoid penalties.

• How do I work to make sure that the ITR-1 is filed accurately?

Although the filing of the form is quite simple, make sure you follow the instructions that come with the form while filling it, cross-check all details and also make use of the online features if any and in case you do not understand something, do not hesitate to seek assistance from a tax consultant.

• What additional documents do I have to prepare for filing ITR-1 for AY 2024-25? 

You will need Form 16, Form 16A, certificates of interest, evidence of the deductions made (Like receipt of investment), and your bank statements. This means that someone who has these documents readily available shall complete it in the right manner.

• Am I allowed to file ITR-1 and if I have received income through dividends? 

Yes, tax paid on dividends received can be declared through ITR-1, provided other conditions for toying this form are met, such as the total income for the given year does not exceed ₹ 50 lakh. The latest format provided contains data entry fields that would enable the reporting of such income in the right manner.

• Any modifications to the reporting of foreign assets or income in ITR-1 for the assessment year 2024- 25?

Any person who has foreign assets or income cannot file ITR-1 because this form is mostly of no use to such persons. If you have such an income, you will have to file a different ITR than what is described above depending on your situation ITR-2 or ITR-3.

• How does the modification in ITR 1 affect tax computation or tax credit/recovery for taxpayers? 

The modifications done to the existing ITR-1 mainly reflects the measures taken for improving the reporting standards and legal conformance. Though perhaps affect, within the valid national legislation, an inclination towards specific types of incomes and deductions and, thereby, the taxation amount or refunds, they do not distort the general assessment of the taxation legislation.

Rutuja Khedekar Freelance Copywriter

Rutuja is a finance content writer with a post-graduate degree in M.Com., specializing in the field of finance. She possesses a comprehensive understanding of financial matters and is well-equipped to create high-quality financial content.

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