ITR Forms FY 2023-24: Here’s what’s new in ITR-1 (Sahaj), ITR-4 (Sugam)

So, if you do not respond in the negative to the question ‘Do you wish to exercise the option u/s 115BAC (6) of opting out of the new tax regime?’ in your ITR form, the new tax regime tax rates and conditions will come into play.

This question has been revised in the ITR forms – ITR-1 (Sahaj) and ITR-4 (Sugam) — issued by the income tax (IT) department on Friday. Until last year, the forms required tax payers to spell out if they wished to opt for the new regime.

ITR forms issued well ahead of time 

The Central Board of Direct Taxes (CBDT) has notified ITR forms for the financial year 2023-24 (assessment year 2024-25) well in advance this time. The two forms  issued on Friday are applicable to salaried individuals, and businesses or  professionals opting for the presumptive income method.

Per the notification, the forms will come into effect from April 1, 2024. Releasing the forms well ahead of the financial year end will enable taxpayers and consultants to comprehend and prepare in advance, ensuring they're ready when the ITR filing window opens for income earned during financial year 2023-24.

“Early release of ITR forms may help the taxpayer who has a very simple tax situation and no major tax deducted at source to file his return immediately on close of the financial year,” said Chetan Chandak, Director and founder, TaxBirbal, a tax consultancy firm.

The return filing date for assesses using ITR-1 or 4 is generally July 31. “Till a few years back, these forms used to be released in April/May, and the utility (software that helps fill the form) for filing the forms on the Income Tax portal used to be released in June and thereafter, in case there was any change, assesses had to rush at the last moment,’’ said Vivek Jalan, Partner, Tax Connect Advisory, a tax consultancy firm.

Also read: Moneycontrol's one-stop income tax return filing guide 

ITR online filing utilities  to follow soon?

This time the forms have been released much in advance. “It is expected that the utility for filing the forms will be released before April 2024, and the assesses will be able to file the forms much before the due date,” added Jalan.

However, despite the availability of the forms, a majority of taxpayers won't be able to submit their tax returns immediately when the window opens. This is because the utility hasn't been released yet. Additionally, the TDS statement, which needs to be cross-referenced before filing, typically comes in June.

Right now, the CBDT has just notified the ITR-1 and ITR-4, but the actual return filing can start only after the e-filing utility is released along with the related schema. "The I-T department wants all e-filing software to be ready ASAP so that the return filing can start immediately after the end of the financial year. But how far this can help taxpayers needs to be seen, as the returns cannot be filed unless the tax deductor files the TDS return in form 24Q / 26Q / 27EQ, etc., and issues the Form 16 / 16A / 16B / 16C (TDS credit statements), which will typically be available by the middle of June 24,” added Chandak.

Minor changes in ITR-1

As far as new ITR forms are concerned, there haven't been any significant modifications, only a few minor adjustments in the updated ITR forms.

ITR-1 (Sahaj): This form is simpler and typically used by resident individuals with income from salary, one house property, family pension, and other sources (like interest from bank and post office deposits), and agricultural income up to Rs 5,000. Put together, the individual's total income for the financial year must not surpass Rs 50 lakh.

Remember, the ITR-1 form is not designed for those classified as Resident Not Ordinarily Resident (RNOR) or Non-Resident Indians (NRI). Additionally, individuals with earnings from sources like lotteries, race horses, or legal gambling cannot use this form.

Moreover, those with taxable capital gains, investments in unlisted equity shares, income from business or profession, or holding a directorial position in a company are not eligible to use ITR 1.

In the newly released ITR 1 for AY 2024-25, there are a few minor adjustments. Under `Part C – Deductions and Taxable Total Income’ a new field, 80CCH, has been added to allow deductions  for contribution to the Agnipath  scheme. Similarly, under `PART E – Other Information,’ where details of all bank accounts held in India at any time during the previous year (excluding dormant accounts) is captured, a new drop-down has been inserted for type of account, which was not there in the old ITR-1,” explained Chandak.

There is also a mention of the Agniveer corpus deductions under section 80CCH. "It states that individuals enrolled in Agnipath scheme and subscribing to Agniveer corpus fund on or after 1st Nov 2022 will be eligible for the 100 percent tax deduction of the total amount deposited in the Agniveer corpus fund," said Sehgal.

Besides that, ‘Type of Bank Account’ has to also be disclosed by selecting from the dropdown provided by the e-filing utility. This may imply that in case  a person has not carried out business/profession, but has a current account with a bank, he has to disclose the same and may be required to furnish the list of transactions separately,” added Jalan.

ITR-4 (Sugam) – detailed turnover break-up needed

This form is applicable to resident individuals, Hindu Undivided Families (HUFs), and firms (other than LLPs) with total income up to Rs 50 lakh , computed under the presumptive taxation scheme (sections 44AD, 44ADA, or 44AE). Similarly, like ITR-1, ITR-4 cannot be used by RNOR and non-resident Indians.

A person using this scheme to file returns can declare income at a stipulated percentage of gross turnover or receipts and, in turn, is relieved from the tedious job of maintenance of books of accounts, and also from getting the accounts audited. To know more about presumptive taxation scheme (PTS), read

Tax filing and Section 44ADA: Why presumptive taxation scheme might work for professionals

Return-filing using ITR-4 (Sugam): Contractual IT professionals, tuition teachers (academic, dance, or drawing), or those providing professional services from home can also opt for filing tax returns under the presumptive taxation scheme (PTS) if they have not maintained proper books of accounts, under Section 44ADA.

The one key change under ITR 4 issued is that one needs to  break up of the turnover u/s 44AD and 44ADA into three categories. “One needs to give the breakup of the revenue “received through a/c payee cheques, or a/c payee bank drafts, or the bank electronic clearing system and prescribed electronic modes, besides details of cash receipts and any mode other than these,” added Chandak.

Another change is that, “where the return has been filed in response to notice u/s 139 (9) /142 (1)/148/153C or order u/s 119 (2) (b), the unique number/document identification number (DIN) and  date of such notice or order is not required to be entered anymore. This is a welcome move and makes it easier to fill the form,” said Jalan.