CA Ashok Mehta

The Central Board of Direct Taxes has notified the returns for Assessment Year 2024-25 vide Notification No. 105/2023, dated 22-12-2023, Notification No. 16/2024, dated 24-01-2024 and Notification No. 19/2024, dated 31-01-2024. However, the ITR 7 has not yet been notified by the department.

The Board has for the first time notified the returns of income well in time to enable the tax payer to study and file a correct return in time. Hopefully the utility will also be issued by 1st April 2024 so that the assessee who want to file their return in advance may be able to do so to avoid the last moment rush and pressure.

1. The returns notified for different assessee’s remain the same as in A Y 2023-24. The notified returns for different assessee’s are reproduced hereunder for ready reference.

ITR 1	For individuals being a resident (other than not ordinarily resident) total income upto ` 50 lakh having Income from Salaries, one house property, other sources (Interest etc.), and agricultural income upto ` 5 thousand.
ITR 2	For Individuals and HUFs (ROR or RNOR or NR) No Total Income Limit not having income from profits and gains of business or profession
ITR 3	For individuals and HUFs (ROR or RNOR or NR) No Total Income Limit having income from profits and gains of business or profession.
ITR 4	For Individuals, HUFs and Firms (other than LLP) being a resident having total income upto ₹ 50 lakh having income from business and profession which is computed under sections 44AD, 44ADA or 44AE and agricultural income upto ₹ 5 thousand.
ITR 5	For persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7:- for AOP, FIRMS, BOI No total income restriction No Income restrictions
ITR 6	For Companies other than companies claiming exemption under section 11 No total income restriction No Income restrictions
ITR 7	For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) only :-Trust claiming exemption under section 11 or political parties claiming exemption under section 13A No total Income restriction No income restriction

It is important that the above returns are filed meticulously so as to avoid further enquiry by the department. The department is likely to initiate action in case of any error or mismatch.

The average time for processing a return of income as per the Government norms is 10 days, however in certain cases the return is processed in less than a day’s time.

It is important to file the return after reconciling with the AIS and the 26AS to avoid notice under section 143(1)(a). The CPC Bangalore raises issues if the AIS and form 26AS is not tallied with the return filed. This leads to delay in processing refund, disallowance of credit of TDS and in certain cases addition to income.

The returns notified seek additional details from the assessee and the changes brought about in the return of income are as under.

2. Verification through EVC of returns of Individual and HUF liable for audit.

The Rule 12 allows the Individual and HUF who are covered under audit to verify the return through EVC.

However, these assessee’s are required to file their audit report in Form 3CD and Form 3CB through digital signature.

Thus, the assessee has the digital signature and hence the additional feature will not help much unless audit report filling is also allowed through EVC.

3. Due Date of filling return.

The return forms in ITR 3, 5 and 6 have added a drop down list to provide for the due date of filling return in row A19(ai).

This would help the processing as in certain cases the CPC Bangalore was taking wrong date and levying interest under section 234A and also fees under 234F.

4. The new tax regime to be default tax regime. (1,2,3,4 & 5)

The new tax regime is the default tax regime as per the amendment in Finance Act 2023 in section 115BAC for Individual, Hindu Undivided Family, Association of person and Body of Individuals or Any other Judicial Person.

If such a person wants to opt for the old regime he will have to explicitly opt out of new scheme and will have to fill up form 10-IEA (clause A 19(b)).

The ITR 2 the clause simply asks the choice which the assessee has opted out of the new scheme, Whereas in ITR 3 the assessee has to give the acknowledgement number of form 10-IEA.

An assessee having business/professional income can also now opt for the old scheme, if he has earlier opted for the new scheme by filing form 10-IEA before the due date of filling return.

This form has to be filed before the due date of filing return. If the assessee misses filing this form then the tax will be calculated based on the new system disallowing all claims of deduction. It will now be the duty of assessee’s opting for the old system to be alert and file the form appropriately if the old system is beneficial to them.

5. Details of Legal Entity Identification (LEI) number to be disclosed.

The purpose of LEI codes(a 20-character alpha-numeric code) is to make it easier to identify a counterparty in financial transactions. The issuance of codes is regulated by the global umbrella organization GLEIF (Global Legal Entity Identifier Foundation). The application for a LEI number is a simple online process on the “indialei.in”

Companies that operate within jurisdictions that mandate the use of LEIs will need to obtain one before they are allowed to transact on the financial market within that jurisdiction. As on 3rd January 2018 LEI is mandatory for companies who wish to continue trading in securities. The RBI has mandated the use of LEIs by large corporate borrowers and legal entities operating within certain financial markets.

With the intention to align with the guidelines issued by RBI, the income tax return also requires mandatorily the quoting of this number for cases where the refund is above Rs 50 crores.

6. Details to be given by those covered by audit under Section 44AB.

The return in ITR 3, 5 & 6 require those covered by audit under section 44AB to disclose the reason why audit is being done from the three choices provided

• if the Sales, turnover or gross receipts exceeds the limits specified under section 44AB
• Assessee falling u/s 44AD/44ADA/44AE/44BB but not offering income on presumptive basis
• Others

This information would be cross checked with the other data in return. If there is a mis-match then a notice for the same would be received.

7. Furnishing details of Acknowledgment of audit report filed and UDIN No.

The last few years the auditor is required to update the UDIN number of the audit after uploading the audit report. This is because the income tax website does not allow updating of the UDIN when uploading the audit report. This leads to trouble of updating UDIN numbers later causing a lot of inconvenience.

The return in ITR 3,5 & 6 have been modified and now require the acknowledgment number and the UDIN number of the audit report to be mentioned and not just the date of audit report like in the previous years.

I hope against hope that the above information will be enough and like in the previous years the auditor will not be asked to update the UDIN Numbers later.

It would help if at the least the auditor is allowed to update the UDIN at the time of filling the audit report so that he does not have to do put additional labour.

8. Assessee offering income under 44AD/44ADA to disclose ‘Receipts in cash’

The Finance Act 2023 increased the turnover limit under section 44AD to 3 crore from 2 crores and in section 44ADA to 75 lakhs from 50 Lakhs. This increase is applicable only if the receipts in cash is less than 5% of the total turnover or gross receipts of the previous year.

The returns ITR 3,4 and 5 with the intention to give effect to the above provision has specifically added in the details for gross turnover / receipts a column of “receipts in cash” in case of assessee’s who are disclosing their income under the presumptive sections of 44AD/44ADA.

9. Disclosure of the sum payable to MSME beyond the limit.

The Finance Act 2023 inserted sub-clause (h) under section 43B. The sub-clause provides for disallowance of all expenses otherwise allowable where the payment to micro and small enterprises are made beyond the time provided under section 15 of the MSME Act 2006.

The time limit provided under section 15 is either the time as agreed under a contract with Micro and small enterprise or where there is no such agreement within 15 days.

However, the payment will have to be made within 45 days even if the contract provides for a period beyond 45 days. The payment cannot be delayed beyond 45days.

The section also provides that if the receiver of goods or services raises a dispute about the defect in goods or services provided, then the due date of 15 days (or a period as per contract) would start from the day on which the defect is removed by the supplier.

The disclosure is required to be made in three schedules in ITR form 3,5 & 6

• Schedule Part A –OI (NEW) other information, clause 10 (h) [disallowed in previous year and allowable in the current year, this would be nil in the current year]
• Schedule Part A-OI (NEW) other information, clause 11(h) [ disallowed in the current year as the payment is not made as per provisions of section 15 of MSMED Act 2006. ] This comes from the audit report clause 26, the figure should tally
•  Schedule BP –Computation of business and profession income clause 19 interest disallowable under section 23 of the MSMED Act. This should tally with clause 22 of the form 3CD
• The ITR 5 and 6 further under the general information filling status have added a new clause (k) requiring a specific requirement whether assessee is recognized as MSME

10. Disclosure of investment made in Capital Gain Scheme.

The return in last year sought information about the amount not utilized before the due date of filling return and put in the capital gain scheme for claiming deduction.

The return ITR 2,3,5 & 6 for A Y 2024-25 seeks further additional details about the capital gain scheme investment made

1. Date of deposit
2. Account number
3. IFS code

11. Winning from online games taxable under section 115BBJ

The section 115BBJ was inserted from A.Y. 2024-25 to tax the income earned from online games. Similarly, section 194BA provides for deduction of TDS on the said online games.

ITR form 2,3,4,5 & 6 for A Y 24-25 has provided for the reporting such income from online games, under IOS in ‘schedule OS’.

12. Schedule 80GGC (contribution to political parties) introduced.

The form ITR 2,3,5 & 6 have been amended and new Schedule 80GGC is introduced. The schedule seeks details of contribution to political parties. The following details are to be provided

• Date of Contribution
• Contribution made in cash and other modes
• Eligible contribution amount
• Transaction reference number in case of online or cheque transfer.
• IFSC code of bank where transfer through bank.

13. Additional disclosure for ESOP’s issued by an eligible Startup as per section 80-IAC.

When an employer allots securities to an employee under ESOP scheme, free of cost or at concessional rate, it is taxable as perquisite in the year of allotment of security. However, the section 17(2) (vi) provides for deferral of tax on ESOP issued to employees either at concessional rate or free. The deferral is for a period of 14 days from the earliest of following dates

1. after the expiry of forty eight months from the end of the relevant assessment year; or
2. from the date of the sale of such specified security or sweat equity share by the assessee; or
3. from the date of which the assessee ceases to be the employee of the person;

Information of the deferral is provided in ‘Schedule – Tax Deferral on ESOP’.

Whereas, various details like the current assessment year, balance amount of tax deferred to be carried forward to next assessment year, etc are sought.

In order to enhance transparency, the new ITR forms amended this schedule to include PAN of the employer and its DPIIT Registration number.

14. Deduction under 80CCH – Agniveer Corpus Fund

The Finance Act 2023 provides Where an assessee, being an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after the 1st day of November, 2022, has in the previous year paid or deposited any amount in his account in the said Fund, he shall be allowed a deduction in the computation of his total income, of the whole of the amount so paid or deposited. He is also allowed deduction for the amount contributed by the central government.

ITR 1,2,3 & 4 for 2024-25 has been amended to include a column for deduction under section 80CCH.

15. Schedule 80U.

Section 80U provides deduction for person suffering from disability or severe disability. A deduction of Rs 75000 for disability and 125000 for sever disability is allowed.

The ITR 3 for A Y 2024-25 (not included in ITR 1 or 2) has introduced a new schedule 80U. The schedule seeks details about the Form 10IA to be issued by a doctor certifying disability or severe disability. The following details are to be provided.

1. Nature of disability
2. Date of filling form 10IA
3. Ack. No of form 10IA
4. UDID number

16. Section 80DD-Details of Maintenance and medical treatment of dependent relative.

Deduction under Section 80DD is allowed to a resident individual or HUF who incurs medical expenditure or pays an insurance premium for the benefit of a family member suffering from a disability. An absolute deduction of INR 75,000 or INR 1,25,000 is allowed under this provision if an individual is suffering from a disability or severe disability, respectively.

ITR forms have introduced a new ‘Schedule 80DD’ seeking details of deduction in respect of maintenance, including medical treatment of a dependent with a disability.

These details comprise:

• Nature of the disability
• Type of dependent (spouse, son, daughter, father, mother, brother, sister or member of the HUF)
• PAN of the dependent
• Aadhaar of the dependent
• Date of filing and acknowledgement number of Form 10-IA
• UDID Number

17. Dividend Income from units located in IFSC.

Return ITR 2,3,5 & 6 for A Y 2024-25, have amended ‘Schedule OS’ in new ITR forms to incorporate specific disclosure of dividend from International Financial Services Centre(IFSC), as referred to in sub-section (1A) of section 80LA, chargeable under proviso to section 115A(1)(a)(A).

The Finance Act 2023 provides for special rate of 10% for dividend from IFSC. The said dividend is to be disclosed separately in schedule of ‘Any other income chargeable at special rate’

18. Disclosure of Any sum including Bonus payments from Unit linked Insurance scheme

The Finance Act 2023 has brought to tax the Unit linked Insurance Scheme under section 56(2)(xiii) and removing the exemption under section 10(10D) for insurance policies issued on or after 1st April 2023 and the premium payable is more than Rs 5,00,000. The returns ITR 2,3 & 5 for A Y 2024-25 have been amended and the ‘Schedule for OS’ has specific clause for disclosure of any sum received from such policy including bonus. The return in Schedule OS clause 1(e)(6) requires disclosure of “Any sum received, including the amount allocated by way of bonus, at any time during a previous year, under a life insurance policy referred to in section 56(2)(xiii)” however it would not mean that the cost paid for the insurance policy will not be allowed as deduction as the taxation under the section is on income.

19. Disclosure of All Bank accounts.

The ITR 2,3,5, & 6 forms require information about the taxpayer’s bank accounts, including the selection of the specific account for receiving income tax refunds.

In the new ITR forms, it is obligatory for the taxpayer to disclose all the bank accounts they hold, with the exception of dormant accounts.

20. Disclosure of sums received by a unit holder from the business trust.

The Finance Act 2023 was amended to include the taxation of income received by unit holders of a business trust , with the intention of avoiding dual non taxation of income in the hand of trust as well as the unit holder.

A new section 56(2)(xii) to tax the income of unit holders received from business trust. The section also provides for deduction of the cost incurred for such investment.

The returns ITR 2, 3 & 5 have been amended to include a new clause for disclosure of this income in ‘Schedule-OS’.

21. Reduction of Unabsorbed Depreciation pertaining to additional depreciation from WDV of the block.

The government in order to push towards a simple taxation system without deduction had introduced section 115BAC for individuals. The assessee opting for the new scheme was not eligible to claim deductions under Chapter VI A, except section 80M and 80JJAA.

The finance Act 2023 extended the benefit of new scheme to AOP, BOI and Any other Judicial Person. The section required that if the assessee has claimed additional depreciation and such depreciation is carried forward as unabsorbed depreciation the same would have to be adjusted against the written down value.

22. Schedule 80-IAC details in respect of eligible startup.

Section 80-IAC is available to an eligible startup for 3 consecutive assessment years out of 10 years at the option of such start up, subject to certain conditions.

Return ITR 5 and 6 have provided a new schedule 80-IAC seeking details with regard to the deductions claimed by companies or firm or LLP. The earlier returns only sought the information about deduction eligible under section 80-IAC The details sought in new schedule + are as follows:

• Date of incorporation of the startup
• Nature of business
• Certificate number as obtained from Inter-Ministerial Board of Certification
• First AY in which deduction was claimed
• Amount of deduction claimed for current AY

23. Schedule 80LA Deduction in respect of Offshore banking or IFSC

Section 80LA provides for deduction of 100% of certain profits of an Offshore Banking units in a SEZ and IFSC for 10 consecutive year out of fifteen years, from the year in which permission under section 23(1)(a) of Banking Regulation Act is granted.

The Return in ITR 5 & 6 for A Y 2024-25 has provided a specific schedule 80-IAC seeking details of such offshore banking unit or IFSC. The details sought are listed below

• Type of entity
• Type of income of the unit
• Authority granting registration
• Date of registration
• Registration number
• First AY during which deduction is claimed
• Amount of deduction claimed for current AY

24. ‘Schedule 115TD’ inserted for reporting tax payable on accreted income

Return in ITR 5 & 6 have provided a new schedule in the form Schedule 115TD. Any fund or institution approved under section 10(23C) or registered under section 12AB is liable to pay tax on accreted income in case it converts into non charitable institution or failure of renewal of registration or transfer of its assets on dissolution to non charitable institution.

If an institution or an entity, such as a Section 8 company, becomes ineligible for registration under Section 12AB or approval under Section 10(23C), it will not be able to file its income tax return in ITR-7. It shall pay tax as per the normal provisions and report such income in the ITR 6. Additionally, it will be liable to pay tax on its accreted income, which will be levied at the maximum marginal tax rate. This tax is in addition to income tax, which is chargeable in the hands of the specified trust or institution.

A new Schedule 115TD has been inserted in the ITR 5 & 6 for the reporting of tax payable on accreted income. This schedule requires various details such as the computation of accreted income (FMV of total assets as reduced by the total liability), tax payable on accreted income and details of challans for deposit of tax on accreted income.

25. New clause for opting for concessional regime under 115BAE for a cooperative society.

The Finance Act 2023 introduced a concessional rate of taxation for a cooperative society engaged in production or manufacturing. The concessional rate of 15% was made applicable to cooperative societies on similar lines to the rate applicable to a company under section 115BAB.

In order to avail the benefit of Section 115BAE, the co-operative society is required to furnish Form No. 10-IFA on or before the due date specified under Section 139(1) in the first return of income for any previous year relevant to the assessment year commencing on or after 1st day of April 2024.

In order to align with this amendment the return ITR 5 has been suitably amended to include the clause to seek details if the option of 115BAE is availed. The date of filing Form 10-IFA and its acknowledgement number is required to be furnished.