New ITR Forms Notified For AY 2025–26, Know Key Tax Changes You Must Note

The Central Board of Direct Taxes (CBDT) has released all Income Tax Return (ITR) forms for Assessment Year 2025–26, based on income earned in FY 2024–25. While the basic structure remains unchanged, key updates include new LTCG limits, stricter capital gains reporting, revised asset disclosure thresholds, and added compliance for business owners, corporates, and trusts.

ITR-1 (Sahaj): Now covers small capital gains

ITR-1 continues to be for resident individuals with income up to Rs 50 lakh from salary, one house, and other sources. A major update allows reporting of long-term capital gains (LTCG) up to Rs 1.25 lakh under Section 112A from listed equity shares and mutual funds.

ITR-2: Capital gains split and asset threshold raised

ITR-2 now mandates detailed capital gains reporting:

Gains before and after July 23, 2024, must be shown separately due to indexation and tax rate changes.

Unlisted bonds/debentures are to be declared based on how long they were held.

Buyback proceeds after October 1, 2024, must be reported under both “Income from Other Sources” and in the capital gains section as “Nil” consideration.

The asset and liability disclosure threshold has increased to Rs 1 crore (earlier Rs 50 lakh).

ITR-3: Tax regime choice and high-value spends

ITR-3 is for individuals and HUFs with business/professional income. It now requires:

Clear mention of chosen tax regime (old or new) with Form 10-IE/10-IEA.

Extra details about business income, including profits/losses and foreign assets.

Reporting of high-value transactions:

Cash deposits over Rs 1 crore,

Foreign travel over Rs 2 lakh,

Electricity bills over Rs 1 lakh,

Credit card spending over Rs 10 lakh.

ITR-4 (Sugam): Small LTCG allowed

Presumptive tax filers using ITR-4 can now report LTCG up to Rs 1.25 lakh under Section 112A, which is a relief for small investors.

ITR-V: Paper verification remains

ITR-V is still used if returns aren’t e-verified. It must be signed and sent to CPC, Bengaluru within 30 days by speed post. Or, e-verify using Aadhaar OTP, net banking, or verified bank/demat account.

ITR-6: More details for companies

For companies (excluding those under ITR-7), updates include:

Split capital gains into before/after July 23, 2024.

Report buyback losses only if dividend income is declared post-October 1, 2024.

New fields for Section 44BBC (cruise income) and diamond sales profits (min. 4 per cent).

More detailed TDS and business disclosures.

ITR-7: New reporting for trusts

Applicable to trusts, political parties, and institutions, ITR-7 now includes:

Capital gains split around July 23, 2024.

Buyback loss details matched with dividend income.

Housing loan interest deduction (Section 24b).

Precise TDS code entries for easier verification.

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