Filing income tax returns (ITR) is an annual exercise for individuals and entities earning income in India. For the financial year 2024-25 (assessment year 2025-26), the Central Board of Direct Taxes (CBDT) has notified various ITR forms, each designed for specific categories of taxpayers. Understanding which ITR form applies to you is crucial for accurate and timely filing. The last date to file ITR is July 31, 2025, for non-audit taxpayers. However, a belated return can be filed by December 31, 2025, with penalties and interest. An updated return can be filed anytime from January 1, 2026, to March 31, 2030. Here's a breakdown of the seven ITR forms and their applicability:

1. ITR-1 (Sahaj)

• Applicability: This form is for resident individuals with a total income of up to ₹50 lakh. Income sources include salary, one house property, other sources (interest, dividends), and agricultural income up to ₹5,000.
• Key Updates: The updated ITR-1 form now allows small investors with limited long-term capital gains (LTCG) up to ₹1.25 lakh to file under this simpler form, provided there are no capital losses to carry forward. This LTCG can be from listed equity shares and mutual funds.
• Who Cannot Use: Non-residents, individuals with income from business or profession, company directors, those with investments in unlisted equity shares, and those with TDS exceeding the limit under Section 194N cannot use ITR-1.

2. ITR-2

• Applicability: This form is for individuals and Hindu Undivided Families (HUFs) whose income is not from profits and gains of business or profession. It includes income from salary/pension, more than one house property, capital gains, and other sources. It is also applicable to individuals who are directors in a company, have investments in unlisted equity shares, or have foreign income.
• Key Updates: There is now separate reporting of capital gains for transactions executed before and after July 23, 2024, due to structural changes introduced by the Finance Act, 2024.
• Who Cannot Use: Individuals with income from business or profession cannot use ITR-2.

3. ITR-3

• Applicability: This form is for individuals and HUFs having income from profits and gains of business or profession. It is also applicable to salaried individuals who have income from intraday trading in shares or income from futures and options.
• Key Updates: The ITR-3 form has been updated with rationalized holding periods for better classification between long-term and short-term capital assets, updated LTCG/STCG rates as per the latest tax rules, and revised indexation norms for calculating the indexed cost of acquisition and improvement. There is mandatory segregation of capital gains for transactions executed before and after July 23, 2024.

4. ITR-4 (Sugam)

• Applicability: This form is for resident individuals, HUFs, and firms (other than LLPs) with total income up to ₹50 lakh. It is meant for those who have income from business and profession which is computed under sections 44AD, 44ADA or 44AE, and agricultural income up to ₹5,000.
• Key Updates: Similar to ITR-1, the updated ITR-4 form allows small taxpayers with limited LTCG up to ₹1.25 lakh to file under this simpler form. The turnover threshold under Section 44AD has been raised to ₹3 crore for businesses, and to ₹75 lakh under Section 44ADA for professionals, if 95% or more of transactions are digital.
• Who Cannot Use: Individuals whose income exceeds ₹50 lakh, non-residents, and those not eligible for presumptive taxation scheme cannot use ITR-4.

5. ITR-5

• Applicability: This form is for partnership firms, LLPs, Association of Persons (AOPs), and Body of Individuals (BOIs).
• Key Updates: The updated form incorporates several key changes in alignment with the Finance Act, 2024.

6. ITR-6

• Applicability: This form is for companies registered under the Companies Act.

7. ITR-7

• Applicability: This form is for companies, associations, and trusts claiming income tax exemption under sections 139(4A), 139(4B), 139(4C), 139(4D), 139(4E), or 139(4F).

Key Changes and Updates for FY 2024-25 (AY 2025-26):

• Simplified ITR 1 and ITR 4: The eligibility criteria for filing ITR-1 and ITR-4 have been relaxed, allowing taxpayers with long-term capital gains (LTCG) up to ₹1.25 lakh from listed equity shares and mutual funds to use these simplified forms.
• Mandatory Tax Regime Disclosure: Taxpayers must explicitly declare their choice between the old and new tax regimes. First-time opt-outs from the new regime must submit Form 10-IEA and mention the acknowledgement number.
• Mandatory Mention of TDS Section: Taxpayers must ensure that they have correctly mentioned the relevant TDS provision for every income on which tax was deducted in ITR forms 1, 2, 3, and 5.
• New Capital Gains Rules: Taxpayers need to pay close attention to the date of sale of their assets while filing ITR, as the Budget 2024 introduced revised capital gains rules effective from July 23, 2024. Capital gains must now be reported separately for transactions executed before and after this date.
• Threshold Raised for Asset and Liability Reporting: From FY 2024-25 onwards, only taxpayers with gross total income exceeding ₹1 crore are required to furnish details of assets and liabilities in their ITR.
• Buyback Proceeds as Deemed Dividends: From October 1, 2024, the amount received on the buy-back of shares by domestic listed companies will be considered as deemed dividends in the hands of shareholders.

Filing Options and Important Dates:

Taxpayers can file their ITR electronically through the income tax e-filing portal. The due date for filing ITR for the FY 2024-25 (AY 2025-26) is July 31, 2025, for non-audit taxpayers. If you miss this deadline, you can file a belated return by December 31, 2025, with penalties and interest. An updated return (ITR-U) can be filed within 48 months from the end of the relevant assessment year, i.e., until March 31, 2030, for AY 2025-26.

Choosing the correct ITR form is essential for accurate tax filing. Review your income sources and taxpayer category carefully to select the appropriate form and ensure compliance with income tax regulations.