Filing an Income Tax Return (ITR) has become more streamlined and transparent in AY 2025-26 (FY 2024-25). From improved form usability to extended deadlines and revised tax regime standards, here’s a breakdown of what’s new—plus how it differs from the last year’s filing experience.
Key Changes in ITR for AY 2025-26 (Current Year)
1. Expanded Eligibility for ITR-1 & ITR-4
Taxpayers can now file ITR-1 and ITR-4 even with long-term capital gains (LTCG) up to ₹1.25 lakh, provided there are no brought-forward or carried-forward losses. This eases compliance for small investors.
2. Aadhaar Enrolment ID Phased Out
ITR forms (1, 2, 3, 5) no longer accept Aadhaar Enrolment ID inputs—only the 12-digit Aadhaar number is valid.
3. Option to Opt Out of Default Tax Regime—With Disclosure
For business owners, ITR-4 now requires detailed disclosure of whether Form 10-IEA was filed previously and if opting out of the new tax regime continues this year.
4. Detailed TDS Section Reporting
ITR forms now mandate specifying the TDS section (e.g., 192, 194A) under which tax was deducted, to streamline credit matching.
5. Capital Gains Reporting Enhanced
Both ITR-1 and ITR-4 now include detailed sections for reporting short- and long-term capital gains, with breakdowns for sale price, acquisition cost, etc.
6. Form ITR-2 Updates
The new ITR-2 includes a separate capital gains section, supports claim of share buyback losses (effective October 1, 2024), and raises the assets/liabilities reporting threshold to ₹1 crore.
7. Profession-Specific Classification Codes
New codes were introduced in ITR-3 and ITR-4 to better classify digital and gig economy professions—e.g., influencers (code 16021), F&O traders (21010), betting agents (21009).
8. Enhanced Documentation for Deductions
Taxpayers claiming deductions under old regime must now provide detailed documentation—insurance policy numbers, HRA details, PPF account numbers, donation registration, medical specifics, etc.—to reduce fraud.
9. Revamped Excel Utilities for ITR-1 & ITR-4
Excel-based e-filing tools now include validation features like auto-disqualification based on TDS code mismatches and require policy numbers for deduction claims.
10. Extended Deadline Due to Form Updates
The ITR filing deadline for non-audit taxpayers was extended from 31 July 2025 to 15 September 2025 to accommodate delays in form utility launch.
What’s Different from AY 2024-25 (Previous Year)?
- Aadhaar Inputs: Aadhaar enrolment numbers were accepted before; now only the full Aadhaar number works.
- LTCG Handling: Previously, LTCG—even within exemptions—made taxpayers ineligible for ITR-1/4. The ₹1.25 lakh LTCG cap is now permitted.
- Profession Codes: No profession-specific codes existed earlier; ITR-3/4 now include them for better classification.
- TDS/Capital Gains Detail: Earlier forms had limited fields. Now, more granular reporting is mandatory.
- Filing Deadline: Filing was earlier due on 31 July; now extended to 15 September.
- Document Disclosure: Old forms did not demand detailed policy/numeric details for deductions. The new forms do.
Summary Table
| Particulars | AY 2025-26 (Current Year) | AY 2024-25 (Previous Year) |
| LTCG Eligibility | LTCG up to ₹1.25 lakh allowed in ITR-1/4 if no losses. | LTCG made one ineligible for ITR-1/4, even if exempt. |
| Aadhaar Input | Only Aadhaar number accepted; enrolment ID rejected. | Both Aadhaar number and enrolment ID accepted. |
| TDS Reporting | Specific TDS section code mandatory. | Optional or limited detail. |
| Capital Gains Disclosure | Detailed breakdown in ITR-1, 4, and separate section in ITR-2. | Limited or general fields only. |
| Profession Classification | ITR-3/4 include gig-economy profession codes (e.g., Influencers). | No such classification system. |
| Deduction Documentation | Detailed disclosure required (policy numbers, landlord info, etc.). | General details accepted. |
| Utility Validation | Validation in Excel tool against TDS codes and deduction entries. | Basic utility without such checks. |
| Filing Deadline | Extended to 15 September 2025. | Standard 31 July deadline. |
Final Thoughts
The ITR process for AY 2025-26 is a leap forward in transparency and user-friendliness. We’ve seen broader eligibility for simpler ITRs, better classification, more accurate reporting—and more importantly, a sensible delay to ensure smooth filing.