Updated Income Tax Return (ITR) Forms: What You Need to Know Starting April 1, 2024

Starting April 1, 2024, MSME Registration Becomes Mandatory for ITR-5 & ITR-6.

To streamline tax processes and improve transparency, the Income Tax Department has announced important updates to income tax return (ITR) forms. These changes, effective from April 1, 2024, aim to simplify tax compliance for businesses and strengthen reporting standards.

1. Making Taxes Easier for Businesses

To make tax procedures simpler, the income tax department has made it easier for businesses to calculate their taxes using a method called presumptive taxation under Section 44AD of the Income Tax Act, 1961. This means that businesses can now report their cash turnover or total sales in a simpler way on forms ITR 5 and 6. The threshold for cash turnover has been raised to Rs. 3 crores, as long as cash transactions make up less than 5% of total sales from the previous year.

2. More Demands for MSMEs in ITR-6 Forms

Businesses using ITR-6 for filing their income tax returns face new requirements. They must now include their Legal Entity Identifier (LEI), MSME registration number, and reasons for any tax audits under Section 44AB of the IT Act. Additionally, the revised form asks for details about winnings from online games under Section 115BBJ of the IT Act and virtual digital assets, making tax reporting more transparent.

3. Stricter Rules for Companies Getting Refunds

If companies want refunds of more than Rs. 50 crores, they need to follow tougher rules. They must provide their Legal Entity Identifier (LEI). Also, when filing ITR-6, they must include acknowledgment numbers and Unique Document Identification Numbers (UDIN) for tax audit reports under Section 44AB of the IT Act and transfer pricing reports under Section 92E of the IT Act.

Also Read: Post Interim Budget 2024: Income Tax Slabs & Rates for FY 2024-25