Five Key Changes every taxpayer should know in ITR Forms for FY 2024-25 (AY 2025-26)
Filing ITR Online? Here's the Only Step-by-Step Guide You’ll Ever Need
Expanded eligibility, revised thresholds, and new capital gains rules highlight this year’s updates
The Income Tax Department has introduced several important changes to ITR forms for the financial year 2024-25 (assessment year 2025-26), making the filing process more inclusive yet precise. Here are five key changes every taxpayer should know:
1. Expanded Eligibility for ITR-1 and ITR-4
Taxpayers with long-term capital gains (LTCG) up to Rs 1.25 lakh from listed equity shares or mutual funds can now use the simpler ITR-1 or ITR-4 forms.
Earlier, even minimal LTCG would disqualify a taxpayer from using these forms.
2. Mandatory Mention of TDS Section
ITR forms 1, 2, 3, and 5 now require taxpayers to specify the TDS section under which tax was deducted on each income source.
This aims to ensure accurate TDS reconciliation and reduce refund-related discrepancies.
3. Revised Capital Gains Rules Post-July 23, 2024
With Budget 2024’s changes coming into effect from July 23, taxpayers must now carefully note the date of sale for assets like shares, property, or land.
Capital gains tax rates will differ based on whether the sale occurred before or after this cutoff.
4. Higher Reporting Threshold for Assets and Liabilities
Previously applicable to individuals earning over Rs 50 lakh, the requirement to report assets and liabilities in the ITR now applies only if gross total income exceeds Rs 1 crore.
This eases compliance for upper-middle-income taxpayers.
5. New Reporting Requirement for Share Buy-Back Gains
From October 1, 2024, amounts received from share buy-backs by domestic listed companies will be treated as deemed dividends.
Taxpayers using ITR-2 and ITR-3 will need to report this income under new disclosure requirements.
ITR 2 is applicable to a majority of taxpayers, especially those who are salaried employees and pensioners. The form will be applied retroactively from April 1, 2025, meaning it will apply since the beginning of the current financial year.
The recently updated ITR-2 includes two significant changes in the capital gains (CG) schedule.
These changes aim to balance ease of filing with stricter compliance on high-value and capital-related transactions. Taxpayers are advised to carefully review new rules and seek professional help if needed while filing their returns this year.
