Who has to file Income tax returns , when to file and what are the forms in which to file the returns ?  Major changes in ITR  for  FY 2024-25

CBDT NOTIFIES ITR1 TO  ITR6 

Income tax returns for FY 2024-25 ( AY 2025-26 )

Dated  13. 05.205 : Income tax department has so far  notified income tax returns forms  ITR1 , ITR2 , ITR3 , I.TR4  ,  ITR5  & ITR6

ITR 1- SAHAJ : For individuals being a resident ( other than not ordinarily resident)

a. having total income upto Rs.5O lakh ,

b. having Income from Salaries, one house property, other sources (Interest etc.),

c. long-term capital gains under section 112A up to Rs. 1.25 lakh,

d. agricultural income np to Rs.5000

Not for an individual who is either Director in a company or bas invested in unlisted equity shares or in cases where TDS bas been deducted u/s 194N or if income-tax is deferred on ESOP or bas assets (including financial interest in any entity) located outside India]

NOTE : : Earlier persons having long term capital gain had to submit ITR2 , but now persons with income up to LTCG of Rs 1.25 lakhs can submit ITR1 

ITR2  : For Individuals and HUFs not having income from profits and gains of business or profession     

ITR3  : For individuals and HUFs having income from profits and gains of business or profession . 

ITR-4- SUGAM : For Individuals, HUFs and Firms (other than LLP) being a resident

a. having total income upto Rs. 50 lakh having income from business and profession which is computed under sections 44AD, 44ADA or 44AE, ,

b. having long-term capital gains under section 112A upto Rs. 1.25 lakhs

NOTE : SUGAM is Not for an individual who is either Director in a company or has invested in unlisted equity shares or if income-tax is deferred on ESOP or has agricultural income more than Rs. 5000 or has assets (including financial interest in any entity) located outside India]  

ITR5  :   For persons other than- (i) individual, (ii) HUF, (iii) company and (iv) person filing Form ITR-7    

ITR6  : For Companies other than companies claiming exemption under section  11  

The income tax department has also notified   ” FORM ITRV – INDIAN INCOME TAX RETURN VERIFICATION FORM  ”  Where the data of the Return of Income in Form ITR-1 (SAHAJ), ITR-2, ITR-3, ITR-4(SUGAM), ITR-5, ITR-7 filed but NOT  verified electronically

 MAJOR CHANGES  OF ITR FORMS :   

Here’s a summary of the key changes in each form:  

This form is for resident individuals with a total income of up to ₹50 lakh, having income from salary, one house property, other sources (like interest), and now, with certain conditions, long-term capital gains.  

• Reporting of Long-Term Capital Gains (LTCG): Taxpayers can now report LTCG under Section 112A if the gains are from the sale of listed shares or equity mutual funds, the total gains are ₹1.25 lakh or less, and there are no capital losses to carry forward.  
   

   
• Simplified Filing for Small Investors: This change aims to simplify filing for salaried individuals with minor investments in the stock market or mutual funds. However, if LTCG exceeds ₹1.25 lakh, or if there are short-term capital gains or capital gains from the sale of property, ITR-2 must be used.  
   

   
• Mandatory Disclosure of Tax Regime Selection: Taxpayers opting out of the new tax regime (Section 115BAC) need to provide more detailed information about their choice between the new and old regimes. First-time opt-outs in AY 2025-26 must provide the acknowledgement details of Form 10-IEA.  
   
• Form 10-IEA Acknowledgement Compulsory: Those opting for the old tax regime for the first time in AY 2025-26 (after previously defaulting to the new regime) must mention their Form 10-IEA acknowledgement number. Late filing of this form may require justification.  
   
• Drop-Down Selection for Deductions: Taxpayers must now select deductions under Sections 80C to 80U from a detailed drop-down menu, providing clause-level precision for more transparency and accuracy.  
   
• Reporting of All Bank Accounts: All bank accounts held at any time during the previous year (excluding dormant accounts) must be reported. At least one account must be designated for refund credit.
• Foreign Travel and Electricity Consumption: Similar to previous years, disclosure of expenses on foreign travel exceeding ₹2 lakh and electricity consumption costs exceeding ₹1 lakh during the previous fiscal year is required.  
   

ITR-2

This form is for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. This includes those with income from capital gains, more than one house property, foreign assets, or dividend income.  

• Capital Gains Split: The schedule for Capital Gains now requires bifurcation of gains based on whether the transfer occurred before or after July 23, 2024, aligning with amendments in the Finance Act, 2024.  
   
• Capital Loss on Share Buyback: Capital loss on share buybacks is now allowed from October 1, 2024, provided the corresponding dividend income is reported under ‘Income from Other Sources’.  
   
• Increased Threshold for Asset and Liability Reporting: The limit for mandatory reporting of assets and liabilities has been increased to ₹1 crore of total income.  
   
• Detailed Deduction Reporting: Enhanced disclosure is required for deductions under sections like 80C and House Rent Allowance [Section 10(13A)], requiring specification of sub-categories.  
   
• TDS Section Code Reporting: Taxpayers must now report the specific section code under which Tax Deducted at Source (TDS) was deducted in Schedule-TDS.  
   
• Expanded Reporting of Foreign Assets and Digital Assets: More granular details are required for overseas investments, including Legal Entity Identifiers for high-value transactions. Reporting of Virtual Digital Assets remains under Section 115BBH.  
   

ITR-3

This form is for individuals and HUFs having income from business or profession.  

• All the changes mentioned for ITR-2 regarding the capital gains split, capital loss on share buyback, increased threshold for asset and liability reporting, detailed deduction reporting, and TDS section code reporting are also applicable to ITR-3.
• New Section Reference: 44BBC: A reference to Section 44BBC related to the presumptive taxation of income from cruise business has been added.  
   

ITR-4 (Sugam)

This form is for resident individuals, HUFs, and firms (other than LLPs) having income from business or profession computed on a presumptive basis under Sections 44AD, 44ADA, or 44AE, and with a total income of up to ₹50 lakh.

• Inclusion of Long-Term Capital Gains (LTCG) Reporting: Similar to ITR-1, this form can now be used for reporting LTCG under Section 112A up to ₹1.25 lakh, provided there are no brought-forward or carry-forward losses under this head.
• Additional Disclosure for Tax Regime Selection: Similar to ITR-1, detailed information is required for opting in or out of the new tax regime under Section 115BAC, including the filing of Form 10-IEA.  
   
• Enhanced Deductions and Disclosures: Deductions under Sections 80C to 80U must be selected from a drop-down menu with specific clauses and sub-sections to be disclosed.  
   
• TDS Section Code Reporting: An additional column has been added under Schedule TDS to specify the section under which TDS is deducted.  
   
• Revised Turnover Limits for Presumptive Taxation: The turnover threshold for presumptive taxation under Section 44AD has increased to ₹3 crore (from ₹2 crore), and for professionals under Section 44ADA to ₹75 lakh (from ₹50 lakh), provided cash receipts do not exceed 5% of the total gross receipts.
• Reporting of All Bank Accounts: Similar to ITR-1, all bank accounts held during the previous year (excluding dormant ones) must be reported, with at least one designated for refund.

ITR-5

This form is for firms, Limited Liability Partnerships (LLPs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), artificial juridical persons, cooperative societies, and business trusts.  

• Capital Gains Segregation Based on Transfer Date: Schedule-CG requires separate reporting of capital gains based on whether the transfer occurred before or after July 23, 2024.  
   
• Recognition of Capital Loss on Share Buyback: Capital loss on buybacks can be claimed if the corresponding dividend income was reported under ‘Income from Other Sources’ for transactions after October 1, 2024.  
   
• New Reference to Section 44BBC – Cruise Business: A specific reference to Section 44BBC for the presumptive taxation of cruise ship operators has been added.  
   
• Mandatory Reporting of TDS Section Code in Schedule-TDS: Taxpayers must specify the applicable TDS section code in Schedule-TDS.  
   

These amendments aim to bring more clarity, improve compliance, and streamline the tax filing process for various categories of taxpayers. Taxpayers should carefully review the changes applicable to their respective ITR forms before filing their returns for AY 2025-26

WHO HAS TO SUBMIT IT RETURNS ? 

FOR RESIDENT INDIANS  : 

For the Financial Year (FY) 2024-25, which corresponds to the Assessment Year (AY) 2025-26, the following individuals and entities are generally required to file income tax returns in India:

Individuals below 60 years of age: If their gross total income exceeds ₹2.5 lakh.

Individuals who are senior citizens (60 years or more but below 80 years): If their gross total income exceeds ₹3 lakh.

Individuals who are super senior citizens (80 years or more): If their gross total income exceeds ₹5 lakh

PERSONS WITH BELOW BASIC EXEMPTION ALSO HAVE TO SUBMIT IT RETURNS

Even if your income is below the basic exemption limit, you may still be required to file an ITR if you meet any of the following conditions:

You have held any unlisted equity shares at any time during the previous year.

You have deposited a total of ₹1 crore or more in one or more current accounts with a bank (this condition does not apply to deposits in post office current accounts).

You have deposited more than ₹50 lakh in one or more savings bank accounts.

You have incurred an expenditure of ₹2 lakh or more for yourself or any other person for travel to a foreign country.

Your electricity consumption expenditure is more than ₹1 lakh during the financial year.

Your total tax deducted at source (TDS) and tax collected at source (TCS) is ₹25,000 or more during the financial year (₹50,000 or more for senior citizens).

Your business turnover exceeds ₹60 lakh.

Your income from profession exceeds ₹10 lakh.

You are claiming an income tax refund.

You have any assets (including financial interest in any entity) located outside India.

You are a signing authority in any account located outside India. 

You have income from any source outside India.

You are a director in a company.

When to file Income Tax returns for AY 2025-26 ?

 

• • For individuals and other non-audit taxpayers: The last date to file your Income Tax Return (ITR) without any penalty is July 31, 2025 (Thursday). This category generally includes salaried employees, pensioners, freelancers, and small businesses or professionals whose accounts are not required to be audited.

• • For businesses requiring audit: The last date for filing ITR is October 31, 2025 (Friday). This applies to businesses and professionals whose turnover or gross receipts exceed the prescribed threshold limits, making them liable for a tax audit under Section 44AB of the Income Tax Act. The threshold for businesses is generally a turnover exceeding ₹1 crore, and for professionals, it’s gross receipts exceeding ₹50 lakh.  

• • For entities requiring a transfer pricing audit: The last date for filing ITR is November 30, 2025 (Sunday). This applies to companies and other entities that have entered into international or specified domestic transactions and are required to submit a transfer pricing report (Form 3CEB).

What happens if you miss the deadline?

If you miss the applicable deadline, you can still file a belated return. The last date for filing a belated return for FY 2024-25 is December 31, 2025 (Wednesday). However, filing a belated return comes with certain consequences:

 

• • Late Filing Fee: You will be liable to pay a late filing fee under Section 234F of the Income Tax Act. The amount of the fee depends on your total income:
    

     

    • • If your total income is ₹5 lakh or less, the fee is ₹1,000.
    • • If your total income is more than ₹5 lakh, the fee is ₹5,000.

• • Interest: You will be liable to pay interest under Section 234A on any unpaid tax amount. The interest is levied at a rate of 1% per month or part of a month from the date immediately following the due date until the date of filing the return.

• • Loss of Certain Benefits: You may not be able to carry forward certain losses, such as business losses or capital losses, to future years for set-off against taxable income.

• • Delay in Refunds: If you are entitled to a tax refund, filing your return late will likely delay the processing of your refund. You might also miss out on interest on the refund for the delayed period.  

Therefore, it is always advisable to file your income tax return well before the respective due dates to avoid penalties, interest, and other complications. Sources and related content  

 

 RULES FOR NON-RESIDENT INDIANS : 

For Non-Resident Indians (NRIs), the rules regarding income tax return filing for FY 2024-25 (Assessment Year 2025-26) are as follows:

Who needs to file?

NRIs are required to file an income tax return in India if their total income earned or accrued in India during the financial year exceeds the basic exemption limit. The basic exemption limit for NRIs is the same as for resident individuals below 60 years of age, which is ₹2.5 lakh under the old tax regime. Under the new tax regime, the basic exemption limit is ₹3 lakh.

Even if your income in India is below the basic exemption limit, you may still need to file a return if you meet certain other conditions, such as having:

• Short Term Capital Gains (STCG) on equity shares or units of equity-oriented mutual funds or business trusts.
• Any Long-Term Capital Gains (LTCG) chargeable to tax.
• Deposited more than ₹1 crore in one or more current accounts with a bank in India.
• Incurred expenditure of more than ₹2 lakh for travel to a foreign country.
• Incurred expenditure of more than ₹1 lakh on electricity consumption in India.
• Total TDS and TCS of ₹25,000 or more.
• Deposited more than ₹50 lakh in one or more savings bank accounts in India.

When is the last date to file?

The due date for filing income tax returns for NRIs who are considered non-audit cases is July 31, 2025 (Thursday). This is the same as the due date for resident individuals who do not need to have their accounts audited.

If an NRI has income from a business or profession in India that requires an audit, the due date for filing the return is October 31, 2025 (Friday).

Important Points for NRIs:

• Taxable Income in India: NRIs are taxed only on income that is earned, received, or accrued in India. Income earned outside India is generally not taxable in India. This includes salary for services rendered outside India, even if the salary is credited to an NRE (Non-Resident External) account.
• Tax Slabs: The income tax slab rates applicable to NRIs are the same as those for resident individuals. Both the old and the new tax regimes are available to NRIs.
• No Age-Based Exemption: Unlike resident senior citizens and super senior citizens, NRIs do not get a higher basic exemption limit based on their age.
• No Rebate under New Tax Regime: Starting FY 2024-25, the rebate under the new tax regime (Section 87A) is available only to resident individuals with a total income (excluding special rate income) up to ₹7 lakh. This rebate is not available to NRIs.
• Deductions and Exemptions: NRIs can claim certain deductions under Chapter VI-A of the Income Tax Act, such as those under Section 80C, 80D, 80G, etc., on their income taxable in India. However, some deductions available to residents may not be available to NRIs.
• Double Taxation Avoidance Agreement (DTAA): If an NRI’s income is taxed both in India and their country of residence, they may be able to claim relief under the Double Taxation Avoidance Agreement (DTAA) that India has with that country.
• ITR Forms: Generally, NRIs who do not have income from business or profession need to file ITR-2. If they have income from business or profession, they need to file ITR-3. ITR-1 is usually not applicable to NRIs.

It is crucial for NRIs with taxable income in India to file their income tax returns by the due date to avoid penalties and interest. Consulting with a tax advisor who specializes in NRI taxation can be beneficial for understanding the specific rules and regulations applicable to your situation.

 

HOW  TO FILE INCOME TAX RETURNS   ? 

Income tax returns can be filed on-line at Income tax  department’s e-filing website   

But , now as  of 2nd , May 2025   , portal is not yet ready  to receive the returns 

Calculate your income tax in both old and new regimes and find which is better for you , CLICK HERE