New ITR Forms Under Income Tax Act, 2025 to Be Notified by January

Income Tax

New ITR Forms Under Income Tax Act, 2025 to Be Notified by January

Income Tax

The transition to India’s new Income Tax Act, 2025 is steadily moving forward, and taxpayers now have a clearer timeline. According to CBDT Chairman Ravi Agrawal, the revised Income Tax Return (ITR) forms and related rules will be officially notified by January 2026, giving individuals and businesses enough time to prepare before the new law becomes effective on April 1, 2026.

Speaking at the India International Trade Fair, the CBDT chief stressed a key objective behind the overhaul: simplifying compliance. The department aims to design ITR forms that are significantly easier for taxpayers to understand and file.

A Major Overhaul of the 1961 Income Tax Act

The Income Tax Act, 2025—which received parliamentary approval on August 12—marks the most significant reform of India’s direct tax legislation in over six decades. While the new Act does not change tax rates, it substantially reworks how provisions are structured and presented.

Here’s what the new framework brings:

1. Fewer Sections, Greater Clarity

  • Sections reduced from 819 (1961 Act) to 536

  • Chapters reduced from 47 to 23

2. Cleaner Language

  • Total word count reduced from 5.12 lakh to 2.6 lakh

  • Archaic and redundant provisions removed

  • Complex text substituted with 39 structured tables and 40 computation formulas for better transparency

This restructuring aims to make the law more accessible to taxpayers, professionals, and administrators alike.

Income Tax

ITR and TDS Forms Being Completely Reworked

All forms under the new Act—including:

  • ITR forms, and

  • TDS/TCS quarterly return forms

—are being redesigned. The CBDT’s Directorate of Systems is collaborating with the tax policy division to build forms that match the simplified spirit of the new law.

Once vetted by the Ministry of Law, the final rules and forms will be notified and placed before Parliament.

Why Notification by January Matters

Notifying the forms early gives taxpayers and organisations—especially corporates, payroll teams, and ERP-driven systems—sufficient time to:

  • Update internal tax workflows

  • Configure accounting and payroll software

  • Train staff on new requirements

  • Ensure smooth filing from April 1, 2026

This lead time is crucial during such a large regulatory transition.

Read More: Navigating NRI Taxation in India’s New Direct Tax Code: Reform & Treaty Issues

What Taxpayers Should Do Now

While no action is required immediately, you can stay prepared by:

  • Tracking CBDT updates through official channels

  • Understanding the new law’s structure

  • Reviewing how your income or business transactions will be classified under the simplified provisions

The coming months will offer greater clarity as the draft forms and rules are released.

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The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

The New ITR-U: 10 Things to Know Before Filing Your Income Tax Return

Updated ITR Filing 2022: The IRS recently released a new form for the filing of Updated Income Tax Returns.

Updated ITR Submitting 2022:
The Internal Revenue Service recently released a new form for filing Updated Income Tax Returns. Budget 2022 featured a new idea of updated returns. It gives taxpayers two years from the end of the relevant assessment year to alter their ITRs. The new feature is meant to assist taxpayers who frequently make mistakes or omissions while filing ITRs.

The following are ten things you should know about the ITR filing update:

1. On the Updated ITR form, taxpayers must state the reason for filing as well as the amount of income that will be taxed in the updated return.

2. Taxpayers are not obligated to break down the income reported on their ITR (Updated).

3. Taxpayers can now file their amended income tax returns for fiscal years 2019-20 and 2020-21 using the new form ITR-U.

4. A digital signature or an electronic verification code is required for some taxpayers to file the Updated ITR electronically. The taxpayer must file the applicable assessment year’s ITR Forms and submit them with the new ITR-U.

5. Within two years of the end of the relevant assessment year, the ITR-U must be filed. Taxpayers must also explain reasons for revising their ITR in order to do so. There are a variety of reasons for submitting ITR-U, including a previous return that was not filed, income that was not declared correctly, incorrect income heads chosen, and the reduction of a carried forward loss, among others.

6. If an updated ITR is filed within a year (12 months) of the end of the relevant assessment year, a taxpayer must pay an extra 25% tax and interest owed.

7. If an amended ITR is filed after a year (12 months) but before 24 months from the end of the relevant assessment year, the taxpayer must pay an additional 50% tax and interest due.

8. If the person fails to pay the additional taxes, the return will be declared void.

Also Read: DELAY IN TAX AUDIT DUE TO ONGOING ASSESSMENT IN SOME OTHER ACT. PENALTY U/S 271B TO BE DELETED


9. If the entire tax owed is to be lowered and losses are to be offset against income, for refund, or for an increase in refund amount, you cannot file ITR-U.

10. For each Financial Year, a taxpayer can only file an Updated ITR once. As a result, it should be done with caution.

Special provision for the full value of consideration in certain cases.

Special provision for the full value of consideration in certain cases.

S-50C of IT Act, 1961

Consideration received from the transfer of a capital asset, being land or building or both

At a Value less than SDV – STAMP DUTY VALUE(for the purpose of payment of stamp duty in respect of such transfer)

The STAMP DUTY VALUE (SDV) shall be deemed to be the FVC (full value of the consideration) received or accruing as a result of such transfer.

What date shall be adopted for Computing Full Value Consideration (FVC)?

Where the date of the agreement for fixing the amount of consideration
And
the date of registration for the transfer of the capital asset is not the same,

the value adopted by the stamp valuation authority on the date of agreement may be taken.

Provided that the amount of consideration, or a part thereof, has been received by way of:

  • 1. A/c payee cheque or
  • 2. A/c payee bank draft or
  • 3. Electronic clearing system through a bank account or
  • 4. Through such other electronic mode as may be prescribed,

on or before the date of the agreement for transfer.

Related Article…

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Relaxation:-

Where SDV <= 110% of Consideration (as a result of the transfer),

Actual Consideration so received shall be deemed to be the FVC

What Happens If the Seller Does Not Accept the Value Adopted by SVA?

There is a possibility that the value adopted by Stamp Valuation Authority (SVA) may not be depicting the FMV at all times or the seller himself may not be satisfied with the value adopted by Stamp Valuation Authority (SVA) based on factors known to him.

Though stamp duty is generally borne by the purchaser, the purchaser may not be very concerned with the value adopted by SVA as it will be its cost of purchase.

S-194-O Payment of certain sums by the e-commerce operator to participant 

However, it makes a huge difference to the seller as it impacts his income tax which can be substantial based on the value.

 

As it is a matter of income tax for the seller, he is allowed to question the value adopted by SVA and claim the value is more than FMV under Section 50C before the income-tax authority unless such value is already questioned before any other authority or court.

In such cases, the income tax officer is required to make a reference to the valuation officer and market value will be determined by such a valuation officer.

The valuation officer, while determining market value, has to call for records/ documents from the taxpayer if required and give the taxpayer an opportunity of being heard and passing an order in writing, stating his valuation. Any value determined by the valuation officer can also be questioned before higher authorities.