The Income Tax Department has significantly updated the income tax return (ITR) forms and rules for the fiscal year 2024-25 (Assessment Year 2025-26). The department has released Excel-based ITR filing utilities for ITR-1 and ITR-4, which apply to salaried individuals as well as those with electric car loans, home loans, or house rent obligations. However, the e-filing utilities have not yet been released, potentially reducing taxpayers' time to file returns before the September 15, 2025 deadline. These updates include measures from Budget 2024, which reflect changes in tax policies and compliance requirements.
Key highlights
- ITR filing deadline for FY 2024‑25 extended to September 15, 2025, for non‑audit taxpayers.
- Seven new validation rules in ITR‑1 & ITR‑4 require detailed deduction disclosures, improving accuracy.
Form 10–IEA
A notable change in 2025 is the requirement for taxpayers with business and professional income to submit Form 10-IEA if they want to switch from the new to the old tax regime. This form is applicable to individuals, Hindu Undivided Families (HUF), Associations of Persons (AOP), Bodies of Individuals (BOI), and Artificial Judicial Persons (AJP). Furthermore, the revised capital gains tax rates in Budget 2024 will affect transactions after July 23, 2024. Short-term capital gains (STCG) under section 111A are now taxed at 20%, whereas long-term capital gains (LTCG) under sections 112 and 112A are taxed at 12.5% without indexation.
Share buybacks
The treatment of share repurchases has also changed. Proceeds from share buybacks will now be considered dividends in the hands of shareholders beginning October 1, 2024. Previously, companies were taxed on share buybacks under Section 115QA. Buyback gains are now reported as dividends on Schedule OS of the ITR forms. Section 50AA also includes unlisted bonds for STCG treatment. The threshold for reporting assets and liabilities in Schedule AL has been raised from Rs50 lakh to Rs1 crore.
Capital Gains Tax
Compliance for small taxpayers has been simplified. Individuals and businesses can now file ITR-1 or ITR-4 for long-term capital gains up to ₹1.25 lakh under Section 112A, regardless of salary status. This simplification eliminates capital gains tax on LTCG up to ₹1.25 lakh from equity mutual funds and equity stocks. Taxpayers can report this income in ITR-1 and ITR-4. However, only valid Aadhaar numbers will be accepted for filing ITRs 1, 2, 3, and 5.
Also Read: Finance Minister Urges Tax Department for Prompt Refund Processing
New sections
The updated ITR forms for 2025 include new fields for cruise ship operators to report income under Section 44BBC and mandatory reporting of disability certificates under Sections 80DD and 80U. A new Schedule TDS captures the section from which TDS is deducted, while the Schedule-Capital Gain section reflects gains split before and after July 23, 2024. Taxpayers filing ITR-3, 4, and 5 must confirm whether they are opting out of the new tax regime and have previously filed Form 10-IEA.
These changes represent a significant shift in the regulatory framework for ITR filings in 2025, with the goal of streamlining compliance, improving reporting accuracy, and aligning tax policy with economic changes. As taxpayers prepare for the upcoming filing season, these updates will necessitate careful attention to detail and prompt action to comply with the new requirements.
