The Finance Act 2024 has introduced several important changes that impact ITR-4 (Sugam) for the Assessment Year (AY) 2025-26, which corresponds to the Financial Year (FY) 2024-25. Here is key modifications:

·         While the limits for presumptive taxation have increased, remember that if you opt for the presumptive scheme, you generally do not need to maintain detailed books of accounts or get them audited. However, if you opt out of the presumptive scheme in any of the five years after opting in, you will be barred from resuming the scheme for the next five years, and may be required to maintain books of accounts and get a tax audit done if your total income exceeds the basic exemption limit.

·         Long-Term Capital Gains (LTCG) Reporting: Taxpayers can now report exempt LTCG under Section 112A (up to ₹1.25 lakh) directly in ITR-1. Previously, they had to use ITR-3 for this.

·         For businesses under Section 44AD, the turnover threshold has been increased from ₹2 crore to ₹3 crore, provided cash receipts do not exceed 5% of the total turnover.

·         For professionals under Section 44ADA, the limit has been increased from ₹50 lakh to ₹75 lakh, provided cash receipts do not exceed 5% of the total receipts.

·         Detailed Disclosure for Opting Out: For taxpayers with business income (who file ITR-4), the form now requires a more detailed disclosure regarding their choice of tax regime. It specifically asks for confirmation of past filings of Form 10-IEA and whether they wish to continue opting out of the new tax regime in the current assessment year. This is crucial as business income taxpayers generally have a once-in-a-lifetime option to switch from the new to the old regime.