ITR Filing 2025: Five Key Changes in ITR Forms for FY 2024-25 (AY 2025-26)
Discover the latest changes in ITR forms for FY 2024-25 (AY 2025-26) that will affect your tax filing process. From wider eligibility for ITR 1 and ITR 4 to new capital gains tax rules, stay informed to file accurately.
Itr FilingTax ChangesCapital GainsTdsAsset ReportingReal Estate NewsMay 18, 2025
1. **Wider Eligibility for ITR 1 and ITR 4**
For filing income tax return for FY 2024-25 (AY 2025-26), more taxpayers can now use ITR 1 and ITR 4 forms. The Income Tax Department has eased the eligibility criteria, allowing individuals with long-term capital gains (LTCG) from equity shares or mutual funds to file ITR using these forms—provided such gains do not exceed Rs 1.25 lakh in the financial year. This change is particularly beneficial for small investors who previously had to use more complex forms.
2. **TDS Section Must Be Specified**
A key change this year is the requirement to mention the TDS section under which tax was deducted. This applies to ITR forms 1, 2, 3, and 5. Taxpayers must ensure that they have correctly mentioned the relevant TDS provision for every income on which tax was deducted. This ensures that the tax department has a clear record of the tax deducted at source, reducing the chances of discrepancies.
3. **New Capital Gains Tax Rules Integrated**
With Budget 2024 introducing revised capital gains rules effective from July 23, 2024, taxpayers now need to pay close attention to the date of sale of their assets while filing ITR. Whether it’s shares, mutual funds, property, or land, the correct capital gains tax calculation hinges on the sale date. This change is crucial for taxpayers with significant capital gains, as it can affect the tax liability and the form of ITR they need to file.
4. **Asset Reporting Threshold Raised**
Previously, individuals with income over Rs 50 lakh had to report assets and liabilities. Now, that threshold has been increased. From FY 2024-25 onwards, only taxpayers with gross total income exceeding Rs 1 crore are required to furnish details of assets and liabilities in their ITR. This change reduces the reporting burden for a significant number of taxpayers, making the process simpler and more streamlined.
5. **Reporting of Buy-Back Proceeds as Deemed Dividends**
From October 1, 2024, the amount received on the buy-back of shares by domestic listed companies will be considered as deemed dividends in the hands of shareholders. The new rule was announced in Budget 2024. The reporting requirements have been made in the ITR-2 and ITR-3 for this. This change is important for shareholders who receive buy-back proceeds, as it affects the tax treatment of these amounts.
By staying informed about these changes, you can ensure a smoother and more accurate tax filing process for FY 2024-25 (AY 2025-26).
Frequently Asked Questions
What are the new eligibility criteria for ITR 1 and ITR 4 forms?
Individuals with long-term capital gains (LTCG) from equity shares or mutual funds can now use ITR 1 and ITR 4 forms, provided such gains do not exceed Rs 1.25 lakh in the financial year.
Why is it important to specify the TDS section in ITR forms?
Specifying the TDS section ensures that the tax department has a clear record of the tax deducted at source, reducing the chances of discrepancies and ensuring accurate tax reporting.
What are the new capital gains tax rules introduced in Budget 2024?
The revised capital gains rules effective from July 23, 2024, require taxpayers to pay close attention to the date of sale of their assets. The correct capital gains tax calculation depends on the sale date.
What is the new threshold for reporting assets and liabilities in ITR?
From FY 2024-25 onwards, only taxpayers with gross total income exceeding Rs 1 crore are required to furnish details of assets and liabilities in their ITR.
How are buy-back proceeds treated for tax purposes from October 1, 2024?
From October 1, 2024, the amount received on the buy-back of shares by domestic listed companies will be considered as deemed dividends in the hands of shareholders.
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