Filing your income tax? Here are the major changes to ITR forms this year

Income tax season is upon us. For individuals and Hindu Undivided Families (HUF) and certain entities not required to undergo an audit, the last day to file the IT returns is July 31, 2025. While we still have a broad window, most experts advise filing returns as early as one can to avoid last-minute hassles.

Moreover, the Central Board of Direct Taxes (CBDT) recently notified of changes to income tax return (ITR) forms for FY 2024-2025.

Let us re-visit them:

For the FY 2025-2025 IT returns, taxpayers can now use ITR-1 (Sahaj) or ITR-4 (Sugam). This includes those with long-term capital gains under section 112A for up to ₹1.25 lakh with no brought forward or carry forward loss.

However, changes have been made to how the deductions are claimed under various sections. TDS deduction will now be captured in Schedule-TDS (applies to other IT forms, too).

For ITR-2, following the changes made in the Finance Act 2024, capital gains or losses made before July 23, 2024, need to be recorded separately (this applies to ITR-3, ITR-5, and ITR-6). The maximum limit of worth assets and liabilities for mandatory reporting has been moved up to ₹1 crore from the earlier ₹50 lakh.

Most of the ITR-2 changes also apply to ITR-3. For ITR-3, for schedule capital gains, a rationalisation of the holding period, rationalisation in rates of long-term capital gains and short-term capital gains, and rationalisation of indexation have been introduced.

For ITR-5, a new ‘cruise biz’ reference in Section 44BBC has been added. Now, capital loss on share buyback can be shown if the corresponding dividend income comes under income from other sources after Oct 1, 2024.

The latest CBDT notification on May 6 makes key updates to ITR-6. Apart from the same changes in ITR-5, Rule 10TIA in ITR-6 states that profits from the sale of raw diamonds have to be 4 per cent or more of gross receipts. There are also changes made in capturing deductions claimed under Section 24(b).

Apart from these, another major yet quiet change applied to the income tax filing process is the removal of the Aadhaar enrollment ID for both the PAN application and the ITR filing. This means you need to provide the actual Aadhaar number, not the enrollment ID. In fact, the column to enter the Aadhaar enrollment ID has been removed from the ITR forms.

The CBDT introduced further and more detailed changes, over and above this. Before filing taxes, please reach out to your financial advisor and a certified CA or tax professional to understand each of these changes better.

Disclaimer: This article is for information purposes only. Please consult a professional financial adviser or certified CA before any investments or filing.

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