The Central Board of Direct Taxes (CBDT) has notified the new Income Tax Return (ITR) forms for e-filing for the Financial Year 2024-25 (Assessment Year 2025-26). Several important changes have been introduced this year across ITR-1 to ITR-6, aimed at simplifying compliance and enhancing reporting transparency.
Here’s a comprehensive overview of the key changes in each ITR form:
What’s New:
Capital Gains Inclusion: Taxpayers can now file ITR-1 or ITR-4 even if they have long-term capital gains (LTCG) under Section 112A, provided the gains do not exceed ₹1.25 lakh and there is no carry forward or brought forward loss.
Improved Deduction Details: New fields introduced to capture specific deductions claimed under various sections of the Income Tax Act.
Detailed TDS Reporting: The Schedule-TDS will now capture the provision under which TDS is deducted.
Key Highlights:
Capital Gains Segregation: A new split has been introduced to report capital gains before and after July 23, 2024, in line with changes made by the Finance Act, 2024.
Buyback Loss Adjustments: Capital loss from share buyback is now permitted if the corresponding dividend income is reported under ‘Income from Other Sources’ (applicable post October 1, 2024).
Asset & Liability Threshold Raised: Individuals with total income exceeding ₹1 crore must now provide asset and liability details.
Enhanced Deduction Reporting: Improvements in how deductions under Section 80C and Section 10(13A) are captured.
Updated Aspects:
Rationalisation of Holding Periods: Holding periods for certain asset classes have been modified.
Capital Gains Tax Rates Streamlined: Changes made to LTCG and STCG rates for better consistency and ease of computation.
Indexation Adjustments: Rules related to indexation of long-term capital assets have been fine-tuned.
Form Updates Include:
Capital Gains Split: Gains must now be reported distinctly before and after July 23, 2024, per Finance Act, 2024.
Buyback Loss Reporting: Allowed where dividend income is declared as ‘Other Sources’ (applicable post October 1, 2024).
New Section Included: Section 44BBC, which deals with income from the cruise business, has been added.
TDS Disclosure Enhanced: Section codes under which TDS is deducted must be reported in Schedule-TDS.
Notified on: May 6, 2025
Major Changes:
Capital Gains Segregation: As with other forms, capital gains must be split around July 23, 2024.
Buyback Loss Provisions: Applicable similar to ITR-2 and ITR-5 post October 2024.
Section 44BBC: Income from cruise business now included for disclosure.
Schedule BP (Business Profits): As per Rule 10TIA, profits from raw diamond sales must be at least 4% of gross receipts.
Home Loan Interest Deduction: Deductions under Section 24(b) (interest on housing loan) are now explicitly captured.
Schedule-TDS: Reporting of TDS section codes made mandatory.
The 2025 ITR forms reflect the government’s continued focus on data precision, expanded eligibility, and compliance streamlining. Taxpayers and professionals must familiarize themselves with these changes to ensure accurate and timely filing.
How can we help? *
