ITR Filing 2025: What Last-Minute Filers Must Keep In Mind

As the extended income-tax filing deadline of September 15 approaches, many last-minute filers are rushing to gather documents and avoid penalties. While the basic method of filing income tax returns (ITRS) stays the same, there are a few changes you should note when filing your returns for financial year 2024-25 (FY25) or assessment year 2025-26 (AY26). These include changes in ITR forms, revised Form 16 disclosures, and expanded reporting requirements for crypto assets and foreign income. For instance, deduction disclosures under Sections, such as 80C and 80D, have become more detailed. Also, the tax deducted at source (TDS) schedule has been updated and requires you to mention the exact section under which tax was deducted. It's important for taxpayers to pay closer attention this year.

- Manas Malhotra

Changes in ITR forms

ITR-1 and ITR-4: ITR-1 is used by salaried individuals earning up to *50 lakh, whereas ITR-4 is intended for professionals and small company owners, resident individuals, Hindu Undivided Families (HUFs), and firms (other than limited liability partnerships or LLPs) with business or individuals with professional income under the presumptive taxation scheme, if their total income does not exceed *50 lakh.

Both forms now allow reporting of long-term capital gains (LTCG) up to 1.25 lakh, if there are no carryforward capital losses.

ITR-2: This is meant for individuals, including salaried taxpayers and HUFS who have income from capital gains above 1.25 lakh, who own multiple properties, or have foreign assets, but no income from business or profession.

For AY26, capital gains must be split between transactions before and after July 23, 2024. Share buyback losses can be claimed only for transactions on or after October 1, 2024, if related dividend income is reported under "other sources". The threshold for reporting assets and liabilities under Schedule AL has been raised to 1 crore for taxpayers with income from salary, capital gains, or other sources, but no business or professional income.

Taxpayers filing ITR-2 can claim indexation benefit on long-term capital gains from sale of land or buildings only if the asset was acquired before July 23, 2024.

A new Schedule VDA (virtual digital assets) requires reporting of each crypto or non-fungible token (NFT) transaction separately, including date, cost, sale value, and gain or loss made on the digital asset.

ITR-3: This is meant for individuals and HUFs having income from business or profession (not under presumptive taxation), as well as income from salary, capital gains, house property, or other sources.