By Kuldip KumarThe Government recently notified the income tax return (ITR) forms for the financial year 2024–25. While there aren’t many changes, most of them are aimed to facilitate the changes announced in Budget 2025 or improving the format to support automated return processing. Being aware of these updates can help you prepare your return accurately and avoid any last-minute hassles.
ITR Filing FY 2024-25: What’s New This Year?
1. ITR-1 and Capital Gains ScheduleIf you have long-term capital gains from listed securities up to the exempted threshold of Rs 125,000, you can now use ITR-1, provided you meet the other eligibility criteria for this form.However, if you have any short-term capital gains or capital losses to carry forward, you’ll still need to use one of the other applicable ITR forms.Due to changes in capital gains tax rates announced in Budget 2024, the Capital Gains Schedule has been modified to report gains separately for periods before and on or after July 23, 2024, so that appropriate tax rates can be applied. No need to worry—your broker or mutual fund should be able to provide these details in the required format.2. Tax on Buyback of SharesStarting October 1, 2024, the responsibility to pay tax on buyback of shares has shifted from companies to the individual taxpayers. Remember, the entire buyback amount is taxable as deemed dividend and you cannot deduct the cost of acquisition. However, you can carry forward the cost of such shares as a deemed capital loss to be set off against future gains.3. Reporting Payments to MSMEsIf you’re reporting income from business or profession, you must now disclose the number of days within which payments were made to Micro, Small, and Medium Enterprises (MSMEs). Any payment made beyond 45 days will not be allowed as a deductible business expense.4. Asset and Liability ReportingThe threshold for reporting assets and liabilities under the AL Schedule has been increased from INR 5 million to INR 10 million. While this is a welcome relaxation, it’s still advisable to maintain proper records of your assets, liabilities, and any movements throughout the year to stay financially organized.Not New, But Still ImportantEven if you don’t have taxable income, you may still be required to file a return under certain conditions. For example, if you:
- Spent more than Rs 200,000 on foreign travel;
- Paid over Rs 100,000 in electricity bills during the year;
- Had TDS or TCS of Rs 25,000 or more (Rs 50,000 for senior citizens);
- Hold a signing authority in a foreign account.
it’s worth checking these criteria for your spouse or parents particularly where they may have joint ownership with you in your financial assets.Final Tip: Avoid Unwanted NoticesIf you want to avoid notices from the tax department, make sure to:
- File your return accurately;
- Complete all reporting schedules carefully;
- Reconcile your financial transactions, TDS, and TCS with the AIS/TIS and the Significant Financial Transactions (SFT) report available on the portal.
With advanced data-matching and automation, discrepancies are easily flagged, and you may be required to respond to queries.As part of good housekeeping, it is important to collect both Form 16 and Form 16A etc, rather than relying solely on the income and tax details from Form 26AS. These forms are typically made available by June 15. It is advisable to wait until then before filing your return. However, if you choose to file before June 15, make sure to review your Form 26AS again after that date to confirm that there have been no changes in the income or tax figures reported by the payer. Any discrepancies in these numbers could lead to an inquiry from the tax authorities and may require a revision of your tax return.(The author, Kuldip Kumar, is Partner at Mainstay Tax Advisors)
