Income Tax Department Notifies ITR Forms for AY 2024-25: Simplifying Tax Filing for Taxpayers – Which One is for You?

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The Income Tax department has taken a significant step towards streamlining the tax filing process by officially notifying income tax return forms 2, 3, and 5 for the assessment year 2024-25. This announcement comes on the heels of earlier notifications of ITR-1 and ITR-6 for companies, issued in December 2023 and January 2024 respectively.

With the notification of these forms, all ITR Forms 1 to 6 are now officially sanctioned and are scheduled to come into effect from April 1, 2024. The Central Board of Direct Taxes (CBDT) also mentioned that several changes have been incorporated into the ITRs to enhance the ease of filing and facilitate taxpayers.

Here’s a brief overview of the various ITR forms and their respective categories:

• ITR-1 (Sahaj): Designed for individuals with a total income of up to ₹50 lakh.
• ITR-2: Applicable to individuals and Hindu Undivided Families (HUFs) without income from business or profession and ineligible for ITR-1 (Sahaj).
• ITR-3: Intended for individuals and HUFs earning income from business or profession.
• ITR-4 (Sugam): Geared towards resident individuals, HUFs, and firms (excluding LLPs) with a total income up to ₹50 lakh, possessing income from business and profession.
• ITR-5: Meant for partnership firms and Limited Liability Partnerships (LLPs).
• ITR-6: Catering to companies, except those claiming exemption under section 11.

In a related development, Union Finance Minister Nirmala Sitharaman, during her presentation of the interim Union Budget, lauded the transformative shift in tax assessment methodologies over the past five years. She highlighted the introduction of updated income tax returns, a new Form 26AS, and prefilling of tax returns as measures that have simplified the tax filing process.

FM Sitharaman emphasized the remarkable reduction in the average processing time of returns, from 93 days in the year 2013-14 to a mere ten days in the current fiscal year. This improvement has led to faster refunds, marking a significant milestone in the government’s efforts to make tax compliance more efficient and taxpayer-friendly.

The notification of these ITR forms, coupled with the commendable progress in tax assessment procedures, underscores the government’s commitment to modernizing the tax ecosystem and enhancing the ease of doing business in India. As taxpayers gear up for the upcoming assessment year, these measures are poised to facilitate smoother and more efficient tax compliance processes.

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