Central Board of Direct Taxes (CBDT) has notified the income tax return (ITR) forms from 1 to 7. People can file their tax return for the financial year 2024-25, and assessment year (AY) 2025–26, with these forms. The CBDT has come up with some major changes in the ITR forms, similar to the changes introduced in the Finance Act.
Income Tax Department has given major relief to the taxpayers by unveiling changes like the introduction of capital gains reporting to a higher threshold for asset disclosure. Despite the forms being notified, taxpayers may still be unclear about which ITR form to use for filing their income tax return. Here are the key changes introduced in the ITR forms and which form is suitable for you.
ITR Forms
ITR-1 (Sahaj): As per the latest update of CBDT, taxpayers can now report long-term capital gains up to Rs 1.25 lakh from listed equity shares or equity mutual funds under Section 112A.
Resident Individual with total income up to 50 lakh are eligible to fill this form. Individuals having other source of income, including salary/pension, income from one house property, income from other sources, agricultural income (up to 5,000 only) are also eligible to fill this form.
ITR-2: The CBDT came up with major changes in this form, including the rationalization of capital gains tax. Any individual having income from capital gains, multiple house properties, or foreign assets is eligible to fill this form. Moreover, this form now includes buyback proceeds after October 1, 2024, which must be reported under ‘Income from Other Sources’ and as ‘Nil’ consideration in capital gains section.
ITR-3: Individuals using the ITR-3 form will now have to mandatorily disclose their tax regime choice (old or new) along with Form 10-IE or 10-IEA. Furthermore, this form has been simplified with a new schedule for capital gains, which allows tax calculations before and after July 23, 2024. Individuals can report capital loss on share buyback if dividend income is shown under ‘income from other sources’. Individuals and HUFs with business/professional income are eligible to fill this form.
ITR-4 (Sugam): Not much has been changed for this form in the financial year 2025. However, the CBDT has updated reporting of LTCG under Section 112A up to Rs 1.25 lakh. Individuals, HUFs, and firms (excluding LLPs) under presumptive taxation schemes are eligible to fill ITR-4 form.
ITR-5 (Return Verification): This form is for those who do not e-verify their returns.
Form 6 And 7
ITR-6: ITR-6’s updates include a schedule to split capital gains for transactions before and after July 23, 2024, and allowing capital losses on buybacks if dividend income is declared after October 1, 2024. ITR-6 applies to companies not required to file ITR-7. Companies, except for those who are required to file return in Form ITR‐7 are eligible to fill this form.
ITR-7: Charitable/religious trusts, political parties, research institutions, and other exempt entities under Sections 139(4A), 139(4B), 139(4C), or 139(4D) are eligible to fill this form. The CBDT has notified changes in this form, including splitting capital gains into pre- and post-July 23, 2024, and disclosing losses related to buybacks.
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