Changes in Income Tax Return Forms: MSME Registration Number and Recognition Status Mandatory for Filing New ITR-5 & ITR-6 Effective April 1, 2024

Streamlining Tax Processes for Businesses

To simplify tax procedures for businesses, the income tax department has relaxed criteria for presumptive taxation under Section 44AD of the Income Tax Act, 1961. This includes the introduction of a new column in ITR forms 5 and 6 for disclosing cash turnover or gross receipts, with the cash turnover threshold now raised to Rs. 3 crores. However, to qualify for these relaxed criteria, cash receipts must not exceed 5% of the total turnover or gross receipts from the previous year.

Enhanced Requirements for MSMEs in ITR-6 Filing

Companies utilizing ITR-6 for filing income tax returns are now confronted with additional requirements. These include the incorporation of the Legal Entity Identifier (LEI), MSME registration number, and justification for tax audits under Section 44AB of the IT Act. The updated form also mandates the disclosure of winnings from online games under Section 115BBJ of the IT Act and virtual digital assets.

Rigorous Reporting Obligations for Companies Pursuing Refunds

Companies seeking refunds of Rs. 50 crores or more are subjected to stringent reporting obligations, necessitating the provision of the Legal Entity Identifier (LEI). Furthermore, ITR-6 now mandates the inclusion of acknowledgment numbers and Unique Document Identification Numbers (UDIN) for tax audit reports under Section 44AB of the IT Act, as well as transfer pricing reports under Section 92E of the IT Act.