ITR Filing 2025: Key Changes in ITR Forms for FY 2024-25 (AY 2025-26)
Learn about the significant changes in ITR forms for FY 2024-25 (AY 2025-26), including wider eligibility for ITR 1 and ITR 4, new TDS section requirements, and updated capital gains tax rules.
Itr FilingCapital GainsTdsTax ReturnsAsset ReportingReal Estate NewsMay 18, 2025
Wider eligibility for ITR 1 and ITR 4
One of the most significant changes is the expanded eligibility for ITR 1 (Sahaj) and ITR 4 (Sugam). Previously, these forms were limited to individuals with specific types of income. Now, more taxpayers can use these forms. Individuals with long-term capital gains (LTCG) from equity shares or mutual funds can file ITR using these forms, provided such gains do not exceed Rs 1.25 lakh in the financial year. This change makes the filing process more accessible for a broader range of taxpayers.
TDS section must be specified
Another important change is the requirement to specify the TDS (Tax Deducted at Source) 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 helps in accurate tax reporting and reduces the likelihood of errors during the verification process.
New capital gains tax rules integrated
With the introduction of revised capital gains rules in Budget 2024, effective from July 23, 2024, taxpayers now need to pay close attention to the date of sale of their assets. Whether it’s shares, mutual funds, property, or land, the correct capital gains tax calculation hinges on the sale date. This change ensures that taxpayers are aware of the new rules and can accurately report their capital gains in their ITR forms.
Asset reporting threshold raised
Previously, individuals with income over Rs 50 lakh had to report assets and liabilities. However, this 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.
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 ensures that shareholders are aware of the tax implications of buy-back proceeds and can report them accurately.
These changes reflect the Income Tax Department's efforts to streamline the tax filing process and ensure compliance with the latest tax regulations. Taxpayers are advised to familiarize themselves with these changes to avoid any issues during the filing process.
Frequently Asked Questions
What are the new changes in ITR forms for FY 2024-25?
The key changes include wider eligibility for ITR 1 and ITR 4, the requirement to specify the TDS section, new capital gains tax rules, a raised asset reporting threshold, and the reporting of buy-back proceeds as deemed dividends.
Who can now use ITR 1 and ITR 4 forms?
Individuals with long-term capital gains (LTCG) from equity shares or mutual funds can use ITR 1 and ITR 4 forms, provided such gains do not exceed Rs 1.25 lakh in the financial year.
What is the new TDS section requirement?
Taxpayers must specify the TDS section under which tax was deducted for every income on which tax was deducted. This applies to ITR forms 1, 2, 3, and 5.
What are the new capital gains tax rules?
Revised capital gains rules introduced in Budget 2024 require taxpayers to pay attention to the date of sale of their assets, as the correct capital gains tax calculation hinges on the sale date.
What is the new asset reporting threshold?
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.
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