The Central Board of Direct Taxes (CBDT) has released a new set of Income Tax Return (ITR) forms — which will be applicable for the assessment year 2025–26 (i.e. financial year 2024–25). The Income Tax Department, which comes under the Finance Ministry, has notified all the seven ITR forms with some key changes this year.
Although the structure of most of the forms remains the same, some important changes have been made in them to align with budget announcements of last year as well as this year. Especially things like relief on long-term capital gains (LTCG), changes in reporting related to property and foreign assets, and choice of tax system are included.
If your income is only from salary, rent from one house and other sources like some interest and the total income is less than Rs 50 lakh, then you fill the ITR-1 form.
Now a big relief has been given — if you have invested in equity shares or equity mutual funds and have made long-term capital gains up to Rs 1.25 lakh from there, then now you can report it in the ITR-1 form itself.
Earlier a separate form had to be filled for this, which will not have to be done now — this change is very beneficial for common investors.
If you have made profits from the stock market, property or mutual funds, and you have more than one house or foreign property — then ITR-2 is for you.
Now in this form, capital gains will have to be shown separately on the basis of whether it happened before 23 July 2024 or after.
Also, if you have done any share buyback after 1 October 2024, then the profit or loss associated with it will also have to be shown in two separate parts – one as ‘income from other sources’ and the other as ‘zero price’ in capital gains.
If your income comes from business or profession (like doctor, lawyer, CA), then ITR-3 form is necessary for you. This time a new column has been added to it – You have to tell whether you have chosen the old tax system or the new one. Along with this, it has also been made mandatory to submit Form 10-IE or 10-IEA.
Now the detailing of capital gains in this form is also better than before – especially the information about the loss from buyback and the dividend related to it can be given easily.
If you are a small trader, drive a taxi, run a shop or are a freelancer and pay tax under the presumptive taxation scheme – then ITR-4 form is for you.
A new facility has been provided in this too – reporting of LTCG up to Rs 1.25 lakh is now possible in this, which was not there earlier. This will also benefit small investors.
ITR 5 Form is for firms, LLP, AOP (Association of persons) and BOI (Body of Individuals), Artificial Juridical Person (AJP), co-operative society, Estate of deceased, Estate of insolvent, Business trust and investment fund, subject to some conditions.
If you are running a company (but not a trust etc.), then ITR-6 form is for you. In this, you will now have to give details of capital gains on the basis of before and after July 23.
Also, if you have done a buyback after October 1, 2024 and have shown the dividend related to it, then the loss on that can also be reported now.
ITR-7 is for those organizations that do social, religious or political work, such as trusts, NGOs, political parties, and educational institutions.
Now they will also have to show the capital gains by dividing them before and after July 23. Apart from this, if they have done a buyback and shown dividend, then reporting of loss has become necessary.
Summing up…
This time the ITR forms are more transparent and detailed than before. If you have invested in the stock market, sold property or participated in a buyback — read these changes carefully. It is now more important than ever to provide correct information so that no notice or penalty comes in the future.