New Sahaj and Sugam ITR Forms for AY 2024–25: Key Changes and Mandatory Disclosures

The Income Tax Return (ITR) Forms 1 new Sahaj and 4 new Sugam for the Assessment Year (AY) 2024–25 have been released by the Central Board of Direct Taxes (CBDT). By making these alterations, the government has further reiterated its commitment to the promotion of transparency and compliance among small and medium-sized taxpayers. With these forms being given out early in December 2023, taxpayers would be given more time to adjust themselves with new disclosure conventions that will apply to millions of filers.

Key Changes in  new Sahaj and new Sugam Forms

1. Mandatory Cash Receipts Disclosure:

Taxpayers are required to declare all money received in cash exceeding Rs 2 lakh during the previous financial year. This is aimed at curbing tax evasion through undisclosed transactions, particularly in sectors that mainly engage in cash transactions.

2. Bank Account Information:

One of the novel requirements is that all savings accounts held in the last financial year must be revealed. For instance, these kinds of accounts will tell taxmen about other types of income that could have been available to taxpayers.

Who Can File new Sahaj and  Sugam?

• ITR-1 (Sahaj):

This type of tax form targets residents whose total earnings do not exceed fifty lakhs. It captures different sources of income, including salaries, only one residential house property, interest earned on other sources, and farm products whose value does not exceed Rs 5,000. This is, however, not applicable to individuals who have to pay taxes on gains obtained from private equity held on unlisted companies’ shares or those individuals serving at the same time as directors in these companies.

• ITR-4 (Sugam):

This form is designed for individual taxpayers, Hindu Undivided Families (HUFs), and other non-LLP entities whose total income does not exceed Rs 50 lakh. Those who derive their income from business or professions calculated on a presumptive basis according to sections 44ADA, 44AD or 44AE should use this form.

Additional features and benefits

1. Deductions for Agniveers:

Taxpayers can claim Section 80CCH benefits on their contributions to the Agnipath scheme, which has been newly introduced as an opportunity for recruitment of young people into Indian military services. The intention behind this deduction is to help people take part in such programs and to encourage them.

2. Notifications Given Earlier Than Before:

Unlike in past years, when ITR forms were announced towards the close of a fiscal year (March), they were made available in December this time around. This will enable them to identify changes and adjustments well ahead of filing deadlines. As a result, these taxpayer-friendly proposals should facilitate ease of filing and minimize last-minute compilations leading to incorrect submissions.

Statistical Context and Impact

Each year, India witnesses the filing of over fifty million (5 crore) ITRs. A considerable share of such filings is constituted by ITR-1 and ITR-4, especially from wage earners and micro businessmen. New disclosure demands, mostly linked to cash receipts and bank accounts, would likely increase compliance levels, hence improving the government’s revenue collection.

Conclusion: Enhanced Transparency and Compliance

The new Sahaj and Sugam ITR forms for AY 2024–25 would mark the government’s commitment towards greater disclosure and better transparency. These reforms aim to simplify the tax filing process and create a more comprehensive tax system in India. Taxpayers using Sahaj and Sugam forms must ensure that they report all relevant financial details in line with new requirements.

This is a great opportunity for taxpayers with advance notice to get acquainted with the revisions so as to agree on timelines and make sure that their submissions are done on time as well as accurately.