Key Changes in ITR Forms for FY 2024-2025

• 21 May 2025
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When you file your income tax return for FY 2024-25, you will observe certain changes in your ITR form this time. The last date to file your ITR form is 31 July 2025, so make sure you file your form on time and in accordance with the new changes. 

Several rules have been updated by the Income Tax Department. These rules can affect how you file, especially if you have had tax deducted at source, earned capital gains or own assets of high value. The changes made by the Department are part of the GOI’s effort to make tax filing more accurate and aligned with recent updates in the tax law.

Now, more individuals can use ITR 1 and ITR 4 forms. If an individual has made long-term capital gains (LTCG) via mutual funds or shares, but the total gains are under Rs. 1.25 lakh in the year, they are eligible to use these ITR forms. For small investors who were required to choose more complex forms earlier, it is a major help!

TDS Section Details now Mandatory in ITR Forms

Another significant change is that you must now explicitly state which TDS section the tax was withheld from your income. This change is applicable to Forms 1, 2, 3, and 5 of the ITR. Therefore, you must make sure the appropriate section is filled out regardless of whether your employer deducted TDS from your pay or if you received interest or rent.

New Capital Gains Tax Regulations Take Effect from July 2024

The updated capital gains tax regulations revealed in Budget 2024 are also reflected in this year's forms. These regulations will take effect on July 23, 2024. Therefore, the date of sale becomes crucial in determining your tax liability if you're selling stocks, mutual funds, or even real estate. Depending on when the item was sold, the newer regulations may alter the way gains are calculated.

New Rules Simplify Asset Disclosure Requirements

There’s been a change in the threshold for reporting assets and liabilities. Previously, individuals with income exceeding Rs. 50 lakh were required to disclose these details. Now, only those with a gross total income of over Rs. 1 crore will need to provide this information, reducing the compliance burden for many taxpayers.

Share Buy-Backs to Be Taxed as Dividends

A new rule applies to share buy-backs by listed companies. Starting October 1, 2024, any amount received from such buy-backs will be treated as dividend income for tax purposes. Taxpayers will need to report this under ITR-2 or ITR-3, depending on their filing status.

These updates, though seemingly minor, could significantly impact how your income tax return is processed. Staying informed and reviewing the latest instructions before filing is essential.