ITR filing season has started, and this time taxpayers need to be more careful while preparing their return. Some changes make filing easier, while others require more detailed reporting.
In this article, we explain four important ITR filing changes related to house property, capital gains, AIS, Form 26AS and income matching.
Why These ITR Filing Changes Matter
If you file your ITR using the old approach, you may miss important reporting requirements.
Some changes are helpful for taxpayers because they simplify the filing process. But some changes are stricter because income details are expected to be checked more carefully.
Broadly, there are four major changes:
- Two changes that make filing easier for some taxpayers
- Two changes that make reporting and income matching stricter
If you want professional help, TaxClear can assist you with accurate and timely ITR filing.
1. Taxpayers With Two House Properties May Be Able to File ITR-1
Earlier, taxpayers with only one house property were allowed to file ITR-1.
If a taxpayer had two house properties, they usually had to use a more complex ITR form.
As per the latest update discussed, taxpayers with two house properties may also be able to file ITR-1, also called the easy ITR form. This can reduce the filing burden for many taxpayers.
Example
Suppose a salaried person owns two house properties. Earlier, they may have had to use a more detailed ITR form.
Now, they may be able to use ITR-1, subject to eligibility.
2. Small Capital Gains From Listed Equity May Be Reported in ITR-1
Earlier, if a taxpayer had capital gain or capital loss, they generally had to file a more complex ITR form.
As per the update discussed, if the capital gain or loss is up to ₹1.25 lakh and is only from listed equity shares or listed equity mutual funds, the taxpayer may be able to declare it in ITR-1.
This is useful for taxpayers who have small capital gains or losses from listed equity investments and want a simpler filing process.
Example
Suppose you sold listed equity mutual funds and your capital gain or loss is within ₹1.25 lakh.
In such a case, you may be able to report it in ITR-1 instead of using a more complex ITR form, subject to eligibility.
3. Capital Gains Reporting Has Become More Detailed
Capital gains reporting has become more detailed because the rates changed on 23 July 2024.
As per the update discussed:
| Particulars | Before 23 July 2024 | After 23 July 2024 |
|---|---|---|
| LTCG | 10% over and above ₹1 lakh | 12.5% over and above ₹1.25 lakh |
| STCG | 15% | 20% |
Because of this, taxpayers need to report capital gains separately for the period before and after 23 July 2024.
This applies to both:
- Long-term capital gains
- Short-term capital gains
So, if a taxpayer earned capital gains before 23 July 2024 and also after 23 July 2024, the details should be broken down properly while filing the ITR.
Example
Suppose you sold listed equity shares before 23 July 2024 and again after 23 July 2024.
In that case, you should not combine everything without checking the reporting requirement. Your ITR may require a separate breakup for gains or losses before and after 23 July 2024.
For better planning before filing, you can also take help from TaxClear’s tax planning service.
4. Income Matching With AIS and Form 26AS Will Be Stricter
The fourth important change is stricter checking of income details.
Earlier, some taxpayers did not report small income amounts correctly. For example, a person may have had ₹20,000 of other income but reported only ₹10,000 in the ITR.
This other income may include:
- Dividend income
- Savings account interest
- Recurring deposit interest
- Deposit interest
- Any income other than the main income
Now, checking is expected to become much stricter. The Income Tax Department may verify income more deeply, including through the use of AI.
That is why taxpayers should carefully match their income with:
- Form 26AS
- AIS
Why AIS and Form 26AS Matching Is Important
Many taxpayers miss small income entries, especially interest income from banks.
But the Income Tax Department may already have this information because it can appear in AIS and Form 26AS.
If you do not show this income in your ITR, it may lead to:
- Income tax notice
- Scrutiny
- Assessment
- Unnecessary problems for the taxpayer
So, before filing your ITR, check all income details properly and report the correct numbers.
If you have received a notice due to mismatch or non-reporting, TaxClear can help you with income tax notice support.
Practical Checklist Before Filing ITR
Before filing your ITR, check the following points:
- Whether you are eligible to file ITR-1
- Whether you have one or two house properties
- Whether you have capital gain or loss from listed equity shares or listed equity mutual funds
- Whether your capital gains are before or after 23 July 2024
- Whether your salary income is correctly reported
- Whether dividend, savings interest, deposit interest and other income are included
- Whether your ITR matches AIS and Form 26AS
Conclusion
This year’s ITR filing changes include both relief and stricter reporting.
Taxpayers with two house properties or small capital gains from listed equity may get a simpler filing option. But capital gains reporting and income matching with AIS and Form 26AS need more care.
Before filing, review all figures properly. If you are unsure, you can book a consultation with TaxClear and get your return reviewed by a professional.
FAQ
1. What are the main ITR filing changes this year?
The main changes are related to two house properties in ITR-1, small capital gains from listed equity in ITR-1, detailed capital gains reporting, and stricter income matching with AIS and Form 26AS.
2. Can I file ITR-1 if I have two house properties?
As per the update discussed, taxpayers with two house properties may be able to file ITR-1, subject to eligibility.
3. Can capital gains be reported in ITR-1?
As per the update discussed, capital gain or loss up to ₹1.25 lakh from listed equity shares or listed equity mutual funds may be reported in ITR-1, subject to eligibility.
4. Why is 23 July 2024 important for capital gains?
The update says capital gains rates changed on 23 July 2024. Therefore, gains or losses before and after this date may need separate reporting.
5. Why should I match my ITR with AIS and Form 26AS?
AIS and Form 26AS may show income such as dividend, savings account interest and deposit interest. If this income is not reported in the ITR, it may result in a notice, scrutiny or assessment.
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