3 Key Changes You Should Know Before ITR Filing 2024

As the financial year draws to a close, taxpayers across India brace themselves for the annual ritual of filing Income Tax Returns (ITR). This year, significant changes have been introduced, promising to make the process smoother yet requiring keen attention to detail. Are you aware of the updates that could impact your tax calculations and filings? Discover the crucial changes in the tax regime, enhanced pre-filled ITR forms, and new reporting mandates for overseas assets that could alter the way you approach your ITR Filing 2024. Dive in to stay ahead and ensure a seamless filing experience:

1. Revised Tax Regime Updates:

In recent years, the Indian government has been promoting the new tax regime alongside the existing one, giving taxpayers the option to choose between the two. For the assessment year 2024-25, there have been notable updates in the new tax regime, including:

– Higher Rebate Limits: The rebate limit under Section 87A has been increased, allowing taxpayers with an income of up to ₹7 lakh to avail a full rebate. This effectively means that individuals in this income bracket will not have any tax liability.

– Standard Deduction: A standard deduction of ₹50,000 has been introduced for salaried individuals and pensioners. This addition makes the new tax regime more appealing, as it reduces taxable income without the need for itemized deductions.

– Lower Surcharge Rates: The surcharge rates for high-income earners have been reduced, which lowers the overall tax liability for those opting for the new regime.

Implications for Taxpayers

These changes aim to simplify the decision-making process for taxpayers, making the new tax regime more attractive compared to the old one. Taxpayers now have the option to choose between the two regimes, and the enhancements in the new regime may influence their choice.

2. Pre-filled ITR Forms:

The Income Tax Department has taken significant steps towards easing the ITR filing process by enhancing pre-filled ITR forms. For 2024, the scope of pre-filled information has been expanded to include:

– Income from House Property: The pre-filled forms will now include details about rental income, home loan interest, and property taxes paid. This aims to simplify the reporting process for individuals who own rental properties.

– Dividend and Interest Income: Taxpayers will see auto-populated entries for income derived from dividends and interest on savings accounts, fixed deposits, and bonds. This information will be sourced directly from banks and financial institutions, reducing the need for manual entry.

– Capital Gains: The forms will also auto-fill details related to capital gains from the sale of securities and mutual funds, making it easier for taxpayers to report these transactions accurately.

Benefits of Pre-filled Forms:

These enhancements are designed to minimize manual entry errors and streamline the filing process. By providing accurate and readily available information, the pre-filled forms help ensure a more efficient and precise experience for taxpayers.

3. Mandatory Reporting of Overseas Assets:

With the increasing number of Indians investing abroad and holding assets outside India, the government has tightened the reporting requirements for overseas assets. Key points to note include:

Detailed Disclosure Requirements:

Taxpayers must disclose comprehensive information regarding foreign assets held during the calendar year 2023 (January 1, 2023, to December 31, 2023). This includes:

– Bank Accounts: Any foreign bank accounts must be reported.

– Financial Interests: This encompasses shares, debentures, life insurance policies, and any beneficial interests in foreign entities.

– Immovable Property: Any property such as land or buildings located outside India must be declared.

– Other Capital Assets: This includes any other forms of capital held abroad.

This information is reported in Schedule FA, which is a mandatory part of ITR forms for individuals classified as residents and ordinarily resident (R&OR) in India

Penalties for Non-disclosure:

Failure to accurately disclose foreign assets can lead to severe penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Penalties can include fines up to ₹10 lakh and potential imprisonment ranging from six months to seven years for serious violations.

Double Taxation Avoidance Agreement (DTAA) Benefits:

To claim relief under the DTAA for taxes paid on overseas income, individuals must ensure accurate disclosure of their foreign assets and income. This is essential for avoiding double taxation and facilitating the appropriate tax credits when filing the ITR.

Why Choose HappyWise Financial Services?

Navigating the complexities of Income Tax Return (ITR) filing can be daunting, especially with the ever-evolving tax laws and regulations. HappyWise Financial Services understands the intricacies involved and is committed to making the process as seamless and stress-free as possible for you.

Here are more details of how HappyWise Financial Services can assist you:

For additional services such as Will Planning alongside Tax Filing, explore the following:

If you’re seeking expert assistance with your ITR Filing, connect with HappyWise Financial Services through: Email, Whatsapp, or call: +91-8095500101

These tips are brought to you by HappyWise Financial Services.