Income tax returns for FY 2023-24: Keep these 8 tax law changes in mind while filing ITR this year
A new standard deduction of Rs 50,000 has been introduced for pensioners. This applies to pension income, providing relief similar to that available for salaried individuals,
Each year, the government introduces changes to improve compliance, simplify processes, or address economic shifts. Staying informed of these modifications is crucial to ensure accurate tax filings and leverage any potential benefits.
Vikas Dahiya, Director of ALL India ITR, says “While the core filing process might seem familiar, even minor adjustments in regulations can significantly impact your tax calculations, deductions, and potential refunds.” He also points out several significant updates introduced that could impact your ITR filing process in 2024.
Revised tax slabs and rates:
This year, the government has introduced new tax slabs under the optional new tax rates without exemptions and deductions. You can choose between the old regime, which includes various deductions and exemptions, for the new regime, which simplifies the process but eliminates most deductions. It’s important to compare both regimes to determine which is more beneficial for your financial situation.
Standard Deduction for Pensioners:
A new standard deduction of Rs 50,000 has been introduced for pensioners. This applies to pension income, providing relief similar to that available for salaried individuals. Pensioners should ensure this deduction is claimed to reduce their taxable income.
Changes in Section 80C and 80D limits:
The limits under Section 80C, which include investments in PPF, NSC, and life insurance premiums, remains at Rs 1.5 lakh. However, there has been a push towards promoting digital payments and savings in the health sector, reflected in increased limits under Section 80D for medical insurance. Taxpayers can now claim higher deductions for premiums paid for health insurance for themselves, their families, and senior citizen parents.
Higher deduction for home loan interest:
For first-time homebuyers, the additional deduction of Rs 1.5 lakh for interest on home loans taken under Section 80EEA has been extended. This aims to encourage home ownership and provides substantial relief for taxpayers with new home loans.
Updated TDS and TCS provisions:
The scope of Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) has been expanded. Notable changes include new TDS rates for non-salaried individuals and professionals and additional compliance requirements for e-commerce transactions. Taxpayers must review their TDS certificates and ensure that appropriate credits are claimed in their ITR.
Faceless assessment and appeals:
The government has expanded the faceless assessment and appeal mechanisms to reduce human interface and improve transparency. Taxpayers should familiarize themselves with the procedures and ensure that all submissions and responses to notices are made online within stipulated deadlines.
Enhanced reporting requirements:
The ITR forms have been revived to include additional disclosures, especially concerning foreign assets and income, and large transactions. Taxpayers with overseas investments or significant financial activities need to provide detailed information to avoid penalties.
Relief for Senior Citizens: Senior citizens aged 75 years and above, having only pension and interest income, are exempt from filing ITR, provided the bank deducts the necessary tax. This simplification reduces the compliance burden for senior citizens with straight forward income sources.
