Key Changes in Income Tax Return(ITR) Forms for AY 2025-26
- Extended ITR Filing Deadline
The due date for filing Income Tax Returns for AY 2025-26 has been extended from 31st July 2025 to 15th September 2025 for most taxpayers, due to extensive changes in the ITR forms and to allow adequate time for system readiness and compliance.
- Simplified ITR-1 and ITR-4 for Small Capital Gains
Taxpayers with long-term capital gains (LTCG) up to ₹1.25 lakh from listed shares and mutual funds can now file using ITR-1 or ITR-4, provided there are no capital losses to carry forward. This threshold was previously ₹1 lakh, and the change simplifies filing for small investors.
- Mandatory Disclosure of Tax Regime
Taxpayers must now explicitly declare their choice between the old and new tax regimes. First-time opt-outs from the new regime must file Form 10-IEA and mention its acknowledgement number in the return. Delays in filing Form 10-IEA must be justified.
- Aadhaar Enrolment ID No Longer Accepted
Only an actual Aadhaar number is now accepted for PAN applications and ITR filings. The Aadhaar Enrolment ID field has been removed from all ITR forms.
- Enhanced Presumptive Taxation Limits
The turnover threshold for presumptive taxation under Section 44AD is now ₹3 crore for businesses, and ₹75 lakh under Section 44ADA for professionals, if 95% or more of transactions are digital.
- Clause-Level Deduction Reporting
Deductions under Sections 80C to 80U must be selected from a detailed drop-down list in the ITR forms, ensuring more precise and transparent claims.
- Capital Gains Reporting Segregation
Capital gains must be reported separately for transactions executed before and after 23 July 2024, reflecting changes introduced by the Finance Act, 2024. This affects ITR-2, ITR-3, and ITR-6.
- Higher Threshold for Asset and Liability Disclosure
The income threshold for mandatory disclosure of assets and liabilities has been raised from ₹50 lakh to ₹1 crore in ITR-2 and ITR-3.
- Expanded Bank Account Reporting
All active (non-dormant) bank accounts held in India during the financial year must be reported. Dormant accounts inactive for over two years are exempt from reporting.
- Other Notable Updates
- Capital losses on share buybacks (from 1 October 2024) can be claimed only if the related dividend income is disclosed under “Income from Other Sources”.
- New disclosure requirements for cruise shipping business income (Section 44BBC) and for businesses dealing in rough diamonds.
- Enhanced TDS reporting: ITR forms now require specifying the section under which TDS was deducted, improving traceability.
These changes aim to simplify compliance, improve transparency, and ensure more accurate reporting for taxpayers in AY 2025-26.
Summary of Changes
| Summary Of Key Updates In Income Tax Return Forms | |
| Change Area | Key Update |
| Filing Deadline | Extended To 15Th September 2025 |
| ITR-1/ITR-4 Eligibility | LTCG Up To ₹1.25 Lakh Allowed |
| Tax Regime Selection | Mandatory Disclosure and Form 10-IEA For Opt Out |
| Aadhaar Requirement | Only Actual Aadhaar Number Accepted |
| Presumptive Taxation Limits | Raised For Digital Transactions |
| Deduction Reporting | Detailed Clause-Wise Selection |
| Capital Gains Segregation | Pre/Post 23 July 2024 Reporting |
| Asset Disclosure Threshold | Increased To ₹1 Crore |
| Bank Account Reporting | All Active Accounts To Be Reported |
| Buyback Loss Reporting | Linked To Dividend Disclosure |
| TDS Reporting | Section-Wise Details Required |