Major Income Tax Rule Changes to Simplify Return Filing

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5 Income Tax Rule Changes Make Filing Returns Easier

Income Tax Return Filing- The normal Income tax return filing due date for AY 2024-25 ended on July 31, 2024. On December 31, 2024, the due date to file a belated ITR with a penalty amount of Rs 5000 will end. The Income Tax Department after the July 31 deadline will provide different categories of taxpayers with specific deadlines to furnish income tax return filing (ITR). For instance, the tax department has extended the ITR filing date for those who require the audit of their accounts from 31st October 2024 to 15th November 2024.

Below we talk 5 amendments in the rules of the income tax concerning tax returns filing via the taxpayers.

With New Form 26AS Improved Tax Transparency

The introduction of the new Form 26AS furnishes the complete data to the taxpayer along with the details of tax deductions or collections at source, demands, payment of taxes, specified financial transactions (SFTs) and refunds. Also, the inclusion of SFT data assures that the taxpayers know about their transactions before, motivating the precise income disclosure. 

Understanding and Using Pre-filled ITRs for Simplified Tax Compliance

To simplify the process of filing the tax the pre-filled income tax returns have been started for the individual taxpayers. These forms comprise information like dividends, salary income, bank interest, other essential financial data, reducing manual effort and enhancing precision in filing.

Streamlined Filing with Updated Returns

Section 139(8A) of the Income-tax Act, 1961, permits the taxpayers to file an updated return within 2 years of the pertinent assessment years. The same provisions allow the individuals to rectify the omissions by voluntarily admitting them and filing the other applicable taxes. Additionally, the e-verification scheme eases the disclosure of unreported or under-reported income in the updated ITRs.

New Income Tax Regime 

An alternative tax regime for individuals has been introduced by the Finance Acts of 2020 and 2024 proposing lower slab rates for those who opt to withhold the cited exemptions and incentives. The same procedure is to ease the personal income tax structure.

Wider Coverage of TDS and TCS

The scope of TDS and TCS to make the tax base bigger has been expanded to wrap transactions like large cash withdrawals, foreign remittances, luxury car purchases, e-commerce sales, property acquisitions, overseas tour packages, virtual digital asset transfers, online gaming payments, and distributions to firm partners, among others.

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