Major changes made in the ITR-1 Form for AY 2024-25
- Individuals filing ITR 1 need to indicate their preferred tax regime in the return of income
The New Tax Regime is the default tax regime from this year, as per the amendments introduced by the Finance Act 2023 in Section 115BAC. For individuals, HUFs, AOPs, BOIs, and AJPs, the new tax regime will apply by default. However, those who prefer the old tax regime, they must explicitly choose to opt-out. Section 115BAC(6) provides the eligible assessee with the option to opt out of the new tax scheme. To exercise this choice:
- For individuals with income (excluding income from a business or profession) need to specify their preferred tax regime in the income tax return filed for the relevant assessment year under Section 139(1)
For individuals with income from a business or profession, the option to opt out of the new tax regime and revert to the old tax regime is available. To exercise this choice, they must submit Form No. 10-IEA on or before the due date for filing the income tax return under Section 139(1).
- An additional section, Section 80CCH, has been introduced by the Finance Act 2023. This section specifies that individuals who enroll in the Agnipath Scheme and subscribe to the Agniveer Corpus Fund on or after 01-11-2022 are entitled to a tax deduction for the entire amount deposited in the Agniveer Corpus Fund.
To accommodate this change, ITR forms 1 has been updated to incorporate a new column which allows taxpayers to provide the relevant details regarding the amount eligible for deduction under Section 80CCH.
Penalty for late Filing of ITR-1
Late filing of income tax returns can result in various penalties, depending on your total income.
- Individuals with a total income exceeding Rs 5 lakh may face a penalty of Rs 5,000, while those with income below this threshold may incur a reduced penalty of Rs 1,000.
- Additionally, if you owe taxes and fail to file the return by the due date, you will be liable for additional interest at a rate of 1% per month until you submit the return
- In more severe cases, penalties can be imposed for underreporting or misreporting of income. Underreporting may lead to penalties of up to 50% of the tax underreported, while misreporting can result in penalties of up to 200% of the misreported tax amount
- Furthermore, repeated failure to file tax returns despite reminders from tax authorities may lead to prosecution procedures. This could result in imprisonment ranging from three months to seven years, depending on the outstanding tax liabilities.