1. Expanded Simplicity for ITR‑1 & ITR‑4
- LTCG limit increased: Taxpayers with long-term capital gains (from equities) up to ₹1.25 lakh can now file ITR‑1 or ITR‑4, provided no carry-forward losses exist—raised from earlier ₹1 lakh limit.
- Excel utility support: Updated offline utilities for ITR‑1 (Sahaj) and ITR‑4 (Sugam) include these provisions and launched via the IT portal on April 29 and May 9, 2025.
2. Aadhaar Enrollment ID Removed
- The forms for ITR‑1, ITR‑2, ITR‑3, and ITR‑5 no longer accept Aadhaar enrolment IDs; only the actual Aadhaar number is valid. Without an Aadhaar, you cannot file ITR.
3. New Tax Regime Is Default; Opt-Out More Detailed
- Default shift: New tax regime now default for individuals, HUFs, etc., under section 115BAC.
- Opting out requires Form 10‑IEA: Business & professional taxpayers can opt for the old regime once per lifetime—and must provide form‑10 IEA acknowledgment on new ITR‑4.
4. Mandatory TDS Section Code Disclosure
- For all ITRs except ITR-4, taxpayers must specify the section of deduction (e.g., 194C, 194J) when reporting TDS to claim the credit.
5. Capital Gains Reporting Refined
- Date-based split: ITR‑2, ITR‑3, ITR‑5, and ITR‑6 require separate reporting of capital gains before vs. after July 23, 2024 (the critical date when new rules began)
- Buyback proceeds: Gains from share buybacks post‑Oct 1, 2024 must be declared as nil consideration in capital gains and under “Income from Other Sources” due to tax paid at the corporate level
6. Other Updates in Specific Forms
- ITR‑2: Must disclose RNOR days, section 80CCH deductions, pass-through incomes (REITs, InvITs, AIFs), and interest on tax refunds.
- ITR‑3 & ITR‑4: Added fields for cash receipts, virtual digital asset (VDA) incomes (ITR‑3 only), restrictions on Section 44ADA usage, RNOR disclosures, and for ITR‑4, foreign associations elimination.
- ITR‑5 & ITR‑6: Require TDS section codes, pass‑through income disclosures, detailed Schedule-CG, Section 24(b) details, RNOR, and sector-specific disclosures (e.g., raw diamonds).
7. ITR‑U: New Updated Return Form Introduced
- ITR‑U launched: Effective April 1, 2025, ITR‑U allows post-filing corrections for up to four years with penalties for past omissions.
8. ITR Filing Deadline Extended
- For non‑audit cases (individuals, salaried), deadline extended from July 31 2025 to September 15 2025.
9. Excel Utility Validation Enhancements
- ITR‑1 & ITR‑4 excel utilities include seven new validation checks and require pre‑validation of bank account and deduction eligibility to minimize errors and ensure data integrity.
📝 What Taxpayers Must Know
| Action | Why It Matters |
|---|---|
| Check LTCG in ITR‑1/4 | Saves time and effort by using simplified forms. |
| Use Aadhaar, not enrolment ID | Dejure requirement—lack of Aadhaar means no filing. |
| Decide tax regime early | Opting out is permanent for the year and requires forms. |
| Enter correct TDS codes | Avoid denial of TDS credits or triggering notices. |
| Accurate capital gains reporting | Date-specific treatment prevents misreporting. |
| Consider ITR‑U for corrections | Use within 4 years if you missed something. |
| Mark calendar: Sep 15, 2025 | Last date to file for most is now extended. |
| Validate bank details first | Mandatory for refunds and error-free filing. |
✅ Final Takeaway
These ITR updates streamline filing for small taxpayers, improve data transparency, and support fiscal compliance. To avoid mistakes or penalties, review your form type, validate all mandatory disclosures, and file well ahead of September 15, 2025.