The Income Tax (IT) departmemt will target undisclosed foreign travel expenses making it mandatory to disclose details of expenditure exceeding Rs 2 lakhs for self and others in annual tax returns.
The Central Board of Direct Taxes (CBDT) has notified the income tax return forms ITR-1 and ITR-4 for the financial year 2024-25 and the assessment year 2025-26 to prevent the taxpayers from showing less expenses during the foreign trips and hold the evaders accountable.
The details filed in ITR-1 and ITR-4 will be compared to the details in the annual information return statement to detect hidden expenses for taxation.
The notification also stipulates that in cases where income tax assesses have opted out of the new income tax regime in AY 2024–25, they must declare and opt to either continue or reverse the selection.
Those who have opted out of the new income tax regime for the first time in AY 2025–26 must furnish Form 10-IEA acknowledgement details. The returns for incomes earned during the financial year from April 1, 2024, to March 31, 2025, have to be filed using the new forms.
All bank accounts, being held in India during the previous year, barring the dormant ones, will now have to be compulsorily reported in the ITR 1 and ITR 4 forms. Long term capital gains from the sale of listed equity shares and equity-oriented mutual funds will use ITR-1 to file their tax returns and taxpayers have to disclose details of luxury items in the ITR.
