The Income Tax Department has released updated Income Tax Return forms for AY 2025-2026 with several modifications to facilitate filing. A notable change is in ITR-1, which now allows reporting of long-term capital gains from listed shares and equity mutual funds up to ₹1.25 lakhs. The new tax regime is the default across applicable forms, with a mandatory requirement in ITR-1, ITR-3, and ITR-4 to provide a reason for opting for the old regime via Form 10-IEA, while ITR-2 offers a checkbox option. The standard deduction in ITR-1 has increased to ₹75,000. A new deduction under section 80CCH for contributions to the Agniveer Corpus Fund has been introduced across ITR-1, ITR-2, ITR-3, and ITR-4. ITR-1 includes clearer categorization for exempt income like agricultural income, with alerts for amounts exceeding ₹5,000, and enhanced disclosure requirements for various income sources like clubbing of income, family pension, and dividends. ITR-2, ITR-3, ITR-5, and ITR-6 now feature a separate section for reporting pass-through income from ReIT, InvIT, and Category I & II AIFs. Reporting of interest received on income tax refunds under the ‘Income from Other Sources’ head is now included in ITR-2, ITR-3, ITR-4, and ITR-6. Specific details regarding the number of days in India are required for Residents Not Ordinarily Resident (RNOR) in ITR-2, ITR-3, and ITR-4. ITR-3 includes a new field for reporting cash receipts from business or profession and mandates filing under this form for income under VDA. ITR-4 restricts the application of Section 44ADA to individuals and requires reporting of cash receipts in Schedule BP. Taxpayers with foreign company association are ineligible to file ITR-4. ITR-5 includes Sections 115BAD and 115BAE and requires disclosure of the chosen tax regime and applicable forms. ITR-7 mandates reporting of FCRA registration details and foreign contributions, requires a breakup of expenses for religious/charitable purposes, and introduces a schedule for tracking utilization of corpus funds and loans. It also requires explicit selection of the exemption section claimed and matching details with Form 10/9A if exemption is for accumulation or deemed application.
Guide to the New ITR Forms for AY 2025-2026: Highlighting Key Changes and Document Requirements
Here’s a summary of the key changes in the new ITR forms for Assessment Year 2025-2026:ITR
ITR-1
1.The new rules allow the taxpayer to report capital gain from long term capital gain from listed shares and equity mutual fund upto Rs 1.25 lakhs in the ITR 1.
2. The new regime is considered as default. The old regime can be opted by filing Form 10-IEA . It has become mandatory to provide the reason as well for opting old regime.
3. The standard deduction increased from Rs 50,000 to Rs 75,000.
4. New deduction under section 80CCH introduced for Agniveers for contribution for Agniveer Corpus Fund.
5. ITR-1 now provides clearer categorization and guidance for reporting exempt income such as agricultural income (up to ₹5,000) , The ITR will alert if the agriculture income crossed the limit
6. In order to avoid the chaos and confusion and enhance more clear/ segregated show of income, detail disclosure/reporting under various heads such as clubbing of income, family pensions and deduction, PF withdrawal, exempt gratuity, leave encashment and computed pension, dividend income etc introduced.
ITR-2
1.The long term capital gain exemption increased from Rs tax rate on short lacs to Rs term capital gain on listed shares increased from 15% to 20%. Lacs.
2. The ITR require specific details to be mentioned in case of RNOR, including number of days in India during the relevant and previous 4 years.
3. The new regime is the default, the old regime option is available in checkbox in ITR . No need to file Form 10-IEA.
4. The limit for exemption under long term capital gain increased from Rs 1 lacs to Rs 1.25 lacs.
5. New deduction under section 80CCH introduced for Agniveers for contribution for Agniveer Corpus Fund.
6. A separate section to report pass through income from ReIT and InvIT , category I and II AIFs introduced.
7. A new filed to report interest received on income tax refund introduced under IFOS.
ITR-3
1. The new regime is considered as default. The old regime can be opted by filing Form 10-IEA . It has become mandatory to provide the reason as well for opting old regime.
2. New field added to show cash receipt from business/profession.
3. A new filed to report interest received on income tax refund introduced under IFOS
4. A separate section to report pass through income from ReIT and InvIT , category I and II AIFs introduced.
5. The ITR require specific details to be mentioned in case of RNOR, including number of days in India during the relevant and previous 4 years.
6. New deduction under section 80CCH introduced for Agniveers for contribution for Agniveer Corpus Fund.
7. Taxpayer with income under VDA to file return only under ITR 3
ITR-4
1.Section 44ADA now restricted for individual only.(HUF excluded)
2. The new regime is considered as default. The old regime can be opted by filing Form 10-IEA . It has become mandatory to provide the reason as well for opting old regime.
3. Schedule BP required cash receipt during the year.
4. New deduction under section 80CCH introduced for Agniveers for contribution for Agniveer Corpus Fund.
5. A new filed to report interest received on income tax refund introduced under IFOS
6. The ITR require specific details to be mentioned in case of RNOR, including number of days in India during the relevant and previous 4 years.
7. Incase of any foreign company association of taxpayer, the taxpayer is not allowed to book income under ITR4.
ITR-5
1.Sections 115BAD and 115BAE added in addition to existing 115BA/115BAB and others. Taxpayers must now clearly disclose the chosen regime and furnish Form 10-IB / 10-IC / 10-IF / 10-IFA, wherever applicable.
2. A separate section to report pass through income from ReIT and InvIT , category I and II AIFs introduced.
ITR 6
1.A separate section to report pass through income from ReIT and InvIT , category I and II AIFs introduced.
2. A new filed to report interest received on income tax refund introduced under IFOS
ITR 7
1.Mandatory reporting of FCRA registration number and details of foreign contribution.
2. Breakup expense incurred for religious/charitable purposes. Categorized into India vs outside India and others.
3. Separate schedule introduced to track Utilization of corpus funds and loans during the year.
4. Taxpayer now must explicitly select section under which exemption is claimed:10(23C), 11, 12A, 13A, etc. Form 10/9A filing details must be matched and reported if exemption is claimed for accumulation or deemed application.
Author Bio
The long term capital gain exemption limit increased from Rs 1,00,000 to Rs 1,25,000.
Many of the changes outlined by the author have been introduced last year and are not new to AY 2025-26, for e.g. Interest on IT Refund, ITR-7 changes etc. The New changes (like Schedule for Capital Gains etc.) have not been dealt with at all. Author is requested to update the article.
Dear Anil sir,
The disclosure requirement increased a lot in ITR form for AY 2025-26. The major changes useful for the financial planning, calculation of income has been covered above. I tried to provide it in the minimum yet meaningful way to grasp quick knowledge/revision of the IT AY 2025-26. I will post another article soon covering all the disclosure requirements. The changes in UTR 7 is as properly updated.
ITR 7*
Thanks