With the start of the new financial year, the Central Board of Direct Taxes (CBDT) has notified the updated Income Tax Return (ITR) forms for the Assessment Year 2025-26, which corresponds to the Financial Year 2024-25. While the overall structure of the forms remains largely familiar, there are several key updates and refinements aimed at improving accuracy, transparency, and digital compliance. Whether you are an individual taxpayer or a business owner, understanding these changes is essential for smooth and error-free filing.
Understanding ITR Form Applicability
To begin with, it is helpful to revisit which form applies to whom. ITR-1, also known as Sahaj, is meant for salaried individuals with income up to ₹50 lakh and one house property, and who do not have any business income. ITR-2 is applicable to individuals and Hindu Undivided Families (HUFs) who do not earn income from business or profession. ITR-3 is designated for individuals and HUFs having income from business or profession. ITR-4, or Sugam, is for those opting for presumptive income schemes under Sections 44AD, 44ADA, or 44AE. Firms, LLPs, Associations of Persons, and Bodies of Individuals file ITR-5, while companies that do not claim exemption under Section 11 use ITR-6. Trusts, political parties, and certain institutions file ITR-7.
Notable Changes in the ITR Forms
One of the major updates this year is the expansion of disclosures required for income from virtual digital assets (VDAs), such as cryptocurrency and NFTs. Taxpayers will now need to provide detailed information including acquisition date, sale date, cost of acquisition, and sale consideration. This move is aimed at improving transparency and tracking in line with recent policy developments.
Another important change pertains to foreign income and assets. Resident taxpayers with overseas income or holdings must now furnish more detailed information than before, reflecting India’s commitment to global tax information sharing standards. Similarly, the capital gains schedule has been revised to include fields for transfer expenses and grandfathering of gains, especially for shares acquired before January 31, 2018. Additionally, scrip-wise disclosures continue to be required wherever applicable.
For those opting for presumptive taxation, the updated ITR forms now incorporate the revised turnover thresholds announced in the Union Budget 2023. The limit for businesses has been increased to ₹3 crore, and for professionals, it is ₹75 lakh, provided that 95 percent or more of the receipts are through digital modes. These changes are now fully embedded in the new forms.
The ITRs are also more seamlessly integrated with the government’s technology platforms. Data from the Annual Information Statement (AIS) and the Taxpayer Information Summary (TIS) is now better integrated for pre-filling fields in the ITR forms. This feature is expected to improve filing accuracy and reduce manual data entry errors.
Key Points for Business Owners and Professionals
Businesses and professionals should take note of a few other relevant updates. Individuals who are directors in companies or shareholders in unlisted companies must now provide the PAN and Aadhaar details of those companies. Moreover, disclosures related to high-value expenditures, such as foreign travel or electricity consumption exceeding ₹1 lakh, continue to be important, and supporting documents should be retained.
Startups and LLPs are also advised to ensure that information related to DINs, LLPINs, capital contributions, and partner details are correctly reported. Ensuring accuracy in these fields is essential, especially when regulatory scrutiny is tightening across multiple fronts.
Filing Timeline and Compliance Tips
The due date for filing returns for non-audit cases is July 31, 2025, while those requiring tax audit must file by October 31, 2025. Taxpayers can file their returns directly through the Income Tax Portal or with the help of authorized intermediaries such as Chartered Accountants or e-return intermediaries.
Before filing, it is advisable to reconcile Form 26AS with the AIS and TIS to ensure consistency in income and TDS reporting. Choosing the correct ITR form is critical, and care should be taken to report exempt income, capital gains, and other heads of income correctly. Filing an incorrect ITR can lead to it being treated as defective, which can later create compliance issues.
Conclusion
The changes introduced in the ITR forms for FY 2024-25 reflect a clear shift towards transparency, tech-enabled reporting, and a self-compliance framework. By staying informed and well-prepared, taxpayers can avoid common pitfalls and ensure a smoother filing experience. For any doubts or personalized advice, consulting a Chartered Accountant remains the most prudent choice.
