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Business Standard
05-06-2025
- Business
- Business Standard
ITR-1, ITR-4 forms go live: Know what has changed, who can file online
People can file their Income Tax returns (ITR) for assessment year 2025-26 as the Central Board of Direct Taxes (CBDT) has enabled the online filing of ITR-1 and ITR-4 forms on its e-filing portal The website has pre-filled data, aimed at simplifying the return filing process for millions of salaried and small business taxpayers. Who can file ITR-1 and ITR-4? Both ITR forms are designed for individuals with relatively simple income profiles, said Naveen Wadhwa, vice-president of Taxmann. ITR-1 (Sahaj) is for resident individuals (not Hindu Undivided Families, HUF) or firms) having: Salary or pension income One-house property (no carried-forward losses) Income from other sources (excluding lottery or racehorse winnings) Total income up to Rs 50 lakh Long-term capital gains under Section 112A up to Rs 1.25 lakh (new inclusion) ITR-4 (Sugam) is for resident individuals, HUFs, or firms (other than LLPs) having: Presumptive income under sections 44AD, 44ADA, or 44AE Total income up to Rs 50 lakh Income from one-house property and other sources Long-term capital gains under Section 112A up to Rs 1.25 lakh, with no capital losses carried forward According to CBDT's rules, individuals earning capital gains up to Rs 1.25 lakh under Section 112A (from listed equity shares, mutual funds, or business trusts) can now file ITR-1 or ITR-4, provided there is no carried forward loss. This change addresses a long-standing concern among small investors. Calculate Income Tax: Income Tax Calculator Tool 'This amendment will benefit a large number of small taxpayers who earlier had to switch to complex forms like ITR-2 or ITR-3 just because of minor capital gains,' said Wadhwa. Wadhwa explained the changes that taxpayers need to keep in mind this time: Aadhaar Enrolment ID not accepted: From October 1, 2024, only the actual Aadhaar number (not the enrolment ID) can be used for PAN applications and return filing. Capital gains disclosures: If your capital asset was sold after July 23, 2024, new tax rules apply. Taxpayers must now disclose the transfer date, as tax rates and indexation benefits differ based on that. Detailed tax regime disclosure: ITR-4 now requires more specifics on whether the taxpayer wants to opt out of the new tax regime under Section 115BAC. Where to file returns Taxpayers can log in to to access the pre-filled ITR-1 and ITR-4 forms and submit them online. With the ITR forms now live, experts suggest early filing to avoid last-minute rush or errors. 'Taxpayers should cross-check their prefilled data, especially TDS and bank interest, before submission,' said Wadhwa. For AY 2025–26, the deadline for most individual taxpayers is September 15 (for non-audit taxpayers).
Hindustan Times
27-05-2025
- Business
- Hindustan Times
Explained: Why CBDT extended deadline to file Income Tax returns to Sept 15
NEW DELHI: The government on Tuesday extended the deadline for filing income tax returns (ITRs) by one-and-a-half months to September 15, arising from changes in the forms, brought about by a significant change in the Income Tax Act itself. Government officials cited technical reasons for the extension, citing technical reasons, including necessary system development to reflect simplified compliances. The announcement came well ahead of the start of the annual income-tax return filing exercise. 'To facilitate a smooth and convenient filing experience for taxpayers, it has been decided that the due date for filing of ITRs, originally due on 31st July, 2025, is extended to 15th September, 2025,' a spokesperson of the Central Board of Direct Taxes (CBDT) said in a statement. CBDT is an arm of the Union finance ministry. Tax experts and chartered accountants (CAs) expressed surprise that CBDT extended the deadline without mentioning the date by which the utilities would be made live for filing ITRs. A finance ministry official, who did not wish to be named, said this could happen in the first week of June and that an announcement would follow. CBDT has already notified extensively modified income tax returns forms for AY (assessment year) 2025-26 in the last two months. The income tax law prescribes seven different forms (or ITRs) for different classes of taxpayers, such as individuals or companies. Returns filed for an assessment year reflect transaction details of the preceding financial year (FY). 'The revamped forms have necessitated additional time for system integration, utility testing, and backend readiness to ensure a more accurate and seamless filing experience,' CA Tarun Kumar, Direct tax head at Coherent Advisors, said, explaining what may have prompted the extension. Giving reasons for extending the timeline, the CBDT statement said: 'The notified ITRs for AY 2025-26 have undergone structural and content revisions aimed at simplifying compliance, enhancing transparency, and enabling accurate reporting. These changes have necessitated additional time for system development, integration, and testing of the corresponding utilities.' The extension wasn't unexpected. 'Unlike the previous couple of years, when ITR forms were released well in advance, typically before March, the ITR forms for the assessment year 2025-26 have been released with a delay of more than a month… more than 39 days .... This created anticipation that the department would extend the due date to file income tax returns,' said Naveen Wadhwa, vice president at consultancy firm Taxmann. According to experts, the government has pre-empted litigations related to time and extended the deadline suo moto. 'This apprehension is based on instructions given in earlier years by the Gujarat and Punjab & Haryana High Courts to the CBDT to extend the due date for filing income-tax returns, in order to alleviate, to a certain extent, the hardships caused due to the delay in providing ITR filing utilities on time,' Wadhwa added. India's net direct tax revenue (after refunds) in the financial year 2024-25 saw 13.57% year-on-year growth at over ₹22.26 lakh crore. Gross direct tax revenue, however, saw a robust 15.6% jump to ₹27,02,974 crore in FY25, compared to ₹23,38,421 crore collected in the previous fiscal year of 2023-24.
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Business Standard
19-05-2025
- Business
- Business Standard
Got a big gift recently? Here's how it could trigger a tax surprise
Received a generous gift recently, like a flat from a relative or a big cash transfer from a friend? This windfall might land you in trouble with the taxman if you're not careful. Here's what you need to know about how gifts are taxed under Indian income tax laws. What kinds of gifts are taxable? 'Under Section 56(2)(x) of the Income Tax Act, gifts received without consideration—like cash, property, or even virtual digital assets—can become taxable if the total value exceeds Rs 50,000 in a financial year,' says Naveen Wadhwa, vice-president, Taxmann. This includes: · Cash or bank transfers received as gifts. · Immovable property (like land or a house) received for free or at a much lower price. · Movable assets, such as jewellery, shares, art, or crypto, if received free or at a discount. In such cases, Wadhwa adds, the value must be reported as "Income from Other Sources" in your ITR for the relevant year. Are there any exemptions? Yes, and some are quite generous. Wadhwa explains that gifts from 'relatives' are fully exempt from tax. But the law has a specific definition for relatives: it includes your spouse, siblings, parents, children, and their spouses—but not friends or distant cousins. Wadhwa further clarifies: 'Gifts received on your marriage are also completely tax-free—regardless of amount. Inheritance, gifts received under a will, or in contemplation of death are also exempt.' That said, Wadhwa suggests it's a good practice to disclose even exempt gifts in the "Exempt Income" (Schedule EI) section of your ITR to avoid future scrutiny. When does a gift become taxable? Kunal Savani, partner at Cyril Amarchand Mangaldas, explains: 'Once the total value of gifts received without consideration exceeds Rs 50,000, the full amount—not just the excess—becomes taxable under 'Income from Other Sources'.' He cautions that this applies not just to cash gifts, but also to discounted purchases—say, if you bought a house worth Rs 70 lakh from a non-relative for Rs 10 lakh, the Rs 60 lakh difference may be taxed. Savani also reminds taxpayers to check if the donor qualifies as a "relative" per the Income Tax Act before assuming tax-free status. Practical ITR tips for gift receivers 'Keep detailed records of every gift you receive—especially high-value ones,' advises Ritika Nayyar, partner at Singhania & Co. This includes: · Nature and value of the gift · Date of receipt · Donor's name and relationship · Supporting documents like gift deeds or bank transfers 'If you're receiving an immovable property as a gift, the stamp duty value becomes key to determining taxability,' she adds. Even if a gift is exempt, Nayyar recommends voluntary disclosure under Schedule EI of your ITR, just to be on the safe side. Can you get into trouble for not declaring gifts? Yes, and the consequences can be serious. 'With the I-T department using AI-powered analytics and reviewing AIS (Annual Information Statement), it's very easy for them to spot large deposits or unusual transactions,' warns CA Deepesh Chheda, partner at Dhruva Advisors LLP. 'If you forget to declare a taxable gift, or claim an incorrect exemption, it could result in a tax notice, penalties, and interest,' he adds. Keep it transparent All four experts strongly advise erring on the side of caution. If you're salaried or middle-income and received any gifts during the year—be it cash, property, or assets—check if they fall under taxable categories and file your ITR accordingly. 'The key is clarity and documentation—know the rules, assess fair market value correctly, and maintain all gift-related records,' Wadhwa said.
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Business Standard
16-05-2025
- Business
- Business Standard
Filing tax returns with wrong ITR form can invalidate and delay process
Resident individuals may use ITR-1 if their total income is within ₹50 lakh and comes from salary or pension Sanjeev Sinha Listen to This Article The Central Board of Direct Taxes (CBDT) has notified the key Income Tax Return (ITR) forms for the financial year 2024-25 (assessment year 2025-2026), allowing taxpayers to file their returns. Salaried individuals should consider both their income level and sources beyond salary when selecting the appropriate ITR form. 'The correct ITR form depends on the type and quantum of income, losses incurred, type of investments made, foreign assets, and so on,' says Naveen Wadhwa, vice-president, Taxmann. Who should go for ITR-1
Economic Times
15-05-2025
- Business
- Economic Times
9 changes in ITR-1, ITR-2, ITR-3, ITR-4 you need to know for FY 2024-25 (AY 2025-26) income tax return filing
The Income Tax Department has notified the income tax return forms for FY 2024-25 (AY 2025-26), incorporating the changes in tax laws announced in the July 2024 budget. However, taxpayers will have to wait for the release of the ITR filing e-utilities on the income tax portal to file their ITR. ET Wealth Online explains the nine changes made in this year's ITR forms that will make your ITR filing process easier for FY 2024-25 (AY 2025-26). Changes in ITR forms for FY 2024-25 (AY 2025-26) 1. Expansion of eligibility to file ITR 1 and ITR 4: This year, the Income Tax Department has expanded the eligibility by relaxing the eligibility criteria, making more taxpayers eligible to file their tax return using ITR 1 and ITR 4. The new rules allow even taxpayers with long-term capital gains from equity and equity mutual funds to file a tax return using ITR1 and ITR 4 (as applicable), provided the capital gains do not exceed Rs 1.25 lakh. Naveen Wadhwa, Vice-President of Research and Advisory at Taxmann, says, "The Budget 2024 increased the LTCG exemption limit on listed equity and equity mutual funds from Rs 1 lakh to Rs 1.25 lakh. In previous years' ITR forms, even if a taxpayer's LTCG under Section 112A was within the exemption limit and there was no tax payable, the presence of capital gains income made them ineligible to file the simpler ITR-1 forms. Instead, they were required to file the return in ITR-2 or ITR-3 forms, which are more complex and time-consuming. This resulted in a genuine hardship for small taxpayers. To address this, the Central Board of Direct Taxes (CBDT) has notified that taxpayers are eligible for filing ITR-1 and ITR 4, even if they have LTCG under Section 112A, provided the total LTCG does not exceed Rs 1.25 lakh and there is no brought forward or carry forward capital loss. This move eases the compliance burden and simplifies return filing for small taxpayers with limited capital gains with no losses to be brought forward." ITR1 and ITR 4 notified by the tax department: Check the major changes here 2. Aadhaar enrolment ID not acceptable: One of the quiet changes made in Budget 2024 was removal of the acceptance of the Aadhaar enrolment ID for the PAN application, and also at the time of filing the ITR. Post this amendment, PAN applications and ITRs can no longer be filed using Aadhaar enrolment ID instead of the actual Aadhaar number. This year's income tax return forms (ITR 1, ITR 2, ITR 3 and ITR 5) have been amended to remove the column to enter the Aadhaar enrolment ID. Wadhwa says, "The ITR forms for FY 2024-25 (AY 2025-26) do not have the Aadhaar Enrolment ID column this year. If the taxpayers do not have an Aadhaar number, then they will not be able to file ITR this year." 3. Opting out of new tax regime by small business owners: Taxpayers having business income cannot switch/choose tax regimes every financial year, unlike individuals who don't have business income. As per the income tax rules, taxpayers having business income have once in a lifetime option to switch from the old to the new tax regime. However, this switching requires submission of a form to the tax department. Wadhwa says, "The previous year ITR-4 simply asked whether the taxpayer had opted out of the new tax regime. If yes, then the taxpayer was required to provide the date and acknowledgement number of Form 10-IEA if applicable. However, the ITR-4 for FY 2024-25 (AY 2025-26) has introduced a more detailed disclosure. It now seeks confirmation of past filings of Form 10-IEA and asks whether the taxpayer wants to continue opting out of the new Tax Regime in the current year." 4. Mention TDS section in ITR form: This year's income tax return forms (ITR 1, ITR 2, ITR 3 and ITR 5) require taxpayers to mention the TDS section under which tax was deducted from the income earned in FY 2024-25. Wadhwa says, "The requirement to mention the TDS section in the ITR form is applicable if tax is deducted on income other than salary. Earlier, there was no requirement to mention the TDS section in the ITR form while claiming the tax credit. However, from this year, a taxpayer must mention the section under which the benefit of TDS credit is being taken." 5. New capital gains rules incorporated in ITR forms: Budget 2024 announced new capital gains rules, effective July 23, 2024. Hence, if you have made capital gains by selling listed or unlisted shares, equity mutual funds, houses, land, or any other capital asset, then the date of sale is important to calculate the correct capital gains amount and the appropriate tax on it. Wadhwa says, "Taxpayers should check the date of sale and transfer of the capital asset to know whether the tax will be calculated based on the old rules or new rules. If the transfer date is before July 23, 2024, the old tax provisions will continue to apply, including the 15% tax rate on STCG covered under Section 111A, the 20% tax rate on LTCG covered under Section 112 with indexation benefit, and the 10% tax rate on LTCG under Section 112A. However, if the transfer occurs on or after 23rd July 2024, new tax provisions will apply. The ITR form requires a disclosure of the date of transfer, separate reporting for transfers made before and on or after 23rd July 2024, and the proper application of revised tax rates and indexation rules."If you have capital gains, then income from them will be reported in ITR 2, ITR 3 and ITR 5, as applicable. 6. Separate reporting for capital gains from unlisted bonds and debentures: Budget 2024 changed the taxation rules for unlisted bonds and debentures. The new rules are effective July 23, 2024. Wadhwa says, "According to the new rules, if unlisted debentures or bonds were issued on or before July 22, 2024, but redeemed, matured, or transferred on or after 23rd July 2024, the entire gain will be taxed as short-term capital gains, regardless of the holding period. As per the new rules, the gains will be taxed at the income tax slab rates applicable to your income. However, if the maturity, redemption or transfer occurs before July 23, 2024, the resulting gain will be classified as long-term and taxable according to the old provision. Under the old rules, the capital gains will be taxed at 20% with indexation benefit."The reporting of capital gains from unlisted bonds and debentures has to be done in ITR-2, ITR-3 or ITR-5, as applicable. 7. Reporting of buy-back 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. The new rule was announced in Budget 2024. Wadhwa says, "ITR-2, 3 and 5 have been amended so that shareholders can report the buy-back proceeds as dividend income under the section 'Income from other sources'. Under the capital gains schedule, the taxpayers will be required to report zero as sale proceeds so that the cost of acquiring shares results in a capital loss. This capital loss can be brought forward and set off against other long-term capital gains for the next eight assessment years." 8. Providing disability certificates for deduction under Section 80DD and 80U: Under the old tax regime, a taxpayer could claim a deduction under Section 80DD or Section 80U for expenditure made for disabled individuals. This year, a taxpayer claiming any of the deduction is required to provide acknowledgement number of the disability certificate as well. Wadhwa says, "Till previous years, a taxpayer could claim a deduction under Section 80DD or Section 80U by quoting the Form 10-IA as per income tax rules. However, from this year, taxpayer is also required to provide acknowledgement number of disability certificates along with Form 10-IA to claim deduction."Section 80DD can be claimed by a resident individual or HUF who incurs medical expenditure or pays an insurance premium for the care of a dependent family member with a disability or severe deduction under Section 80U is available to a resident individual who is himself suffering from a disability or severe says, "This reporting requirement is applicable only if ITR-2 and ITR-3 is filed. There is no reporting requirement if the taxpayer files ITR-1." 9. Asset reporting applicable if total income exceeds Rs 1 crore: There is good news for taxpayers having income above Rs 50 lakh. From this year, a taxpayer is required to report their assets and liabilities only if the gross total income exceeds Rs 1 crore. Wadhwa says, "Earlier, a taxpayer was required to report their assets and liabilities if their gross total income exceeded Rs 50 lakh in a financial year. However, from this year, the reporting in Schedule AL will be mandatory only if gross total income exceeds Rs 1 crore."The reporting in Schedule AL can be done in the ITR 2 and ITR 3.
