The season for tax filing for Assessment Year 2025-26 has started, and some significant updates have been released that every taxpayer must be aware of. The Central Board of Direct Taxes (CBDT) has stated that for the financial year 2024-2025, several changes to the ITR forms and filing process have been introduced that will significantly impact the manner of filing tax returns by individuals.
Extended Filing Deadline: A Welcome Relief
The ITR filing deadline extension is the most significant update for this year as it has been extended from July 31, 2025, to September 15, 2025. The extension applies to all non-audit cases and is provided to ensure that the taxpayers are able to adapt to the new form changes and requirements. Hence, CBDT, recognizing the extensive modifications made in ITR forms, extended the deadline to ensure accurate and compliant filing.
Schedule AL Threshold Increased: Less Compliance Burden
The increase in the threshold for reporting assets and liabilities has been considered as the most taxpayer-friendly change for F.Y. 2024-2025.
Old Provision: Taxpayers are required to file Schedule AL (Assets & Liabilities) if their total income exceeds Rs 50 lakhs in that particular financial year.
New Update: The limit has been revised as taxpayers need to file schedule AL mandatorily only if their gross total income exceeds Rs 1 crore. This change has reduced the compliance burden for middle and upper-middle-class taxpayers significantly as it makes the filing process simpler and less time-consuming.
Capital Gains Tax Rate Changes
A major change in the capital gain taxation has been brought by “The Finance Act 2024”, that are:
- Long-Term Capital Gains (LTCG): Rate increased from 10% to 12.5%
- Short-Term Capital Gains (STCG): Rate increased from 15% to 20%
These changes are effective from July 23, 2024, and will be reflected in the individuals’ ITR filing for AY 2025-26.
ITR Form Updates and Rationalization
Several improvements have been made in the new ITR forms:
ITR-1 (SAHAJ) and ITR-4 (SUGAM)
- E-filing is now enabled for these forms
- Streamlined interface for easier filing
- Better integration with pre-filled data
ITR-3 for Business Income
- Rationalized holding periods for better classification between long-term and short-term capital assets
- Enhanced compliance features
- Improved sections for business income reporting
New Provisions for Share Buybacks
A significant change affects how share buybacks are taxed. Previously, taxes on share buyback were paid by the companies under Section 115QA. The new update states that this taxation has been shifted to individual shareholders, requiring them to report buyback income in their ITR.
Who Should File Which ITR Form?
Choosing the right ITR form is crucial for accurate and compliant filing. Let’s understand which ITR form shall be selected by you:
- ITR-1 (SAHAJ): For salaried individuals with income up to Rs 50 lakhs
- ITR-2: For individuals with capital gains, foreign income, or multiple house properties
- ITR-3: For individuals with business or professional income
- ITR-4 (SUGAM): For presumptive taxation under sections 44AD, 44ADA, or 44AE
Key Compliance Points to Remember
- Late Filing Penalties: If taxpayers missed the deadline of September 15, it will result in interest charges under Section 234A and late filing fees under Section 234F
- Accurate Reporting: With new capital gains rates, ensure all transactions are correctly reported
- Document Preparation: Gather all necessary documents well in advance
- Professional Help: Consider professional assistance for hassle-free filing and avoiding complexities
How TaxSurely Can Help
At TaxSurely, we understand that these changes can seem overwhelming. Our team of experienced tax consultants stays updated with all the latest amendments and ensures your ITR filing is accurate, compliant, and optimized for maximum deductions.
We offer:
- Expert ITR Filing Services across all ITR forms
- Tax Optimization Strategies to minimize your liabilities
- Compliance Assurance with a 100% accuracy guarantee
- Penalty Protection through timely and accurate filing
Conclusion
The ITR filing process for AY 2025-26 brings both challenges and opportunities. While the new changes require careful attention, the extended deadline and reduced compliance burden (like the Schedule AL threshold increase) provide welcome relief.
Start preparing your documents early, understand the new requirements, and consider professional assistance to ensure smooth and accurate filing. Remember, proper tax planning and timely filing not only ensure compliance but can also help you save significantly on your tax liabilities.
Need help with your ITR filing? Contact TaxSurely today for expert assistance and a stress-free tax filing experience.
