Introduction
The Income Tax Department has released all seven Income Tax Return (ITR) forms for the Assessment Year (AY) 2025–26, corresponding to the Financial Year (FY) 2024–25. Filing your ITR correctly and on time is crucial to staying compliant, avoiding penalties, and claiming rightful tax benefits.
Every year brings updates—new forms, revised rules, and process improvements—aimed at making tax filing more straightforward, transparent, and taxpayer-friendly. This year, the government has introduced several key changes that especially benefit salaried individuals, small business owners, and investors with capital gains.
As a comprehensive compliance and billing platform, CaptainBiz understands how taxing managing multiple forms and deadlines can be.
Read More: Top Income Tax Return Filing Tips for Individuals and Businesses
Understanding ITR Forms for AY 2025–26
Choosing the right ITR form is the first and most important step in filing your tax return. The government offers seven different forms to cover the diverse income scenarios of Indian taxpayers. Here’s a detailed overview of all forms, their eligibility, and income types.
| ITR Form | Who Should File | Income Sources Covered | Income Limits / Notes |
|---|---|---|---|
| ITR-1 (Sahaj) | Resident individuals (not NRIs) with straightforward incomes | Salary/pension, one house property, interest income, agricultural income ≤ ₹5,000 | Total income ≤ ₹50 lakh; No business income allowed |
| ITR-2 | Individuals/HUFs with capital gains, multiple properties, foreign assets | Capital gains, salary, multiple house properties, foreign income/assets | Cannot have business/profession income |
| ITR-3 | Individuals/HUFs with income from business/profession | Income from business or profession, salary, capital gains | No income limit; includes professionals and proprietors |
| ITR-4 (Sugam) | Resident individuals/HUFs/firms with presumptive income | Presumptive income under Sections 44AD, 44ADA, or 44AE | Total income ≤ ₹50 lakh; No capital gains or losses |
| ITR-5 | Firms, LLPs, cooperative societies, AOPs, BOIs | Business or professional income, capital gains | All types except companies |
| ITR-6 | Companies (except those exempt under Section 11) | Business income | Not for trusts/charitable entities |
| ITR-7 | Trusts, political parties, charitable institutions | Income exempt under Sections 11, 12, 10(23C), etc. | No income limit |
This table helps taxpayers self-assess and identify the correct form based on their income profile.
Read More: Top 5 mistakes to avoid while filing your income tax return in 2025-26
Major Changes for AY 2025–26
1. Simplified Capital Gains Reporting for Salaried & Small Taxpayers
One of the biggest highlights this year is that salaried taxpayers and small business owners earning long-term capital gains (LTCG) from listed shares or mutual funds up to ₹1.25 lakh can now file using ITR-1 or ITR-4. This is a relief as previously, any LTCG income required filing ITR-2, which is more complex.
This change aligns with the LTCG exemption threshold on listed equities and mutual funds, allowing smaller investors to avoid complicated forms and simplify their return filing experience.
2. New Capital Gains Reporting Format
Taxpayers filing ITR-2, ITR-3, ITR-5, ITR-6, and ITR-7 must now report capital gains separately based on whether the assets were sold before or after July 23, 2024. This is linked to the government’s budget update, where LTCG tax on real estate was reduced from 20% (with indexation) to 12.5% (without indexation) if the property was purchased before July 23, 2024.
This requires taxpayers to maintain meticulous records of purchase and sale dates, so they can accurately choose the tax method that offers the best benefit.
3. Increased Asset Declaration Threshold for Business Owners
For taxpayers filing ITR-3 (business owners and professionals), the threshold for declaring a detailed list of assets and liabilities under Schedule AL has been raised from ₹50 lakh to ₹1 crore. This reduces the compliance burden for many small and medium business owners who otherwise had to disclose exhaustive asset details.
Important Deadlines to Remember
Timely filing is crucial to avoid late fees and scrutiny. Here is a summary of key dates for AY 2025–26:
| Taxpayer Category | Due Date | Notes |
|---|---|---|
| Individuals and HUFs (non-audit cases) | July 31, 2025 | Standard deadline |
| Taxpayers requiring audit (business/profession) | October 31, 2025 | Audit report mandatory |
| Transfer Pricing cases | November 30, 2025 | International transactions |
Filing early helps avoid last-minute rush and ensures you can rectify any errors with sufficient time.
Additional Tips for Taxpayers Using CaptainBiz
While CaptainBiz is primarily a billing and GST compliance platform, maintaining your financial records in real-time is vital to a hassle-free ITR filing process. Our platform helps you:
Generate GST-compliant invoices automatically
Track expenses and incomes efficiently
Manage digital records for easier audit and tax filing
Generate financial reports that simplify tax calculations
By using CaptainBiz, you can save precious time during tax season and ensure that your books are always audit-ready.
How Capital Gains Taxation Works (For Clarity)
Capital gains tax is levied on profits from the sale of assets like property, shares, or mutual funds. Gains can be short-term or long-term, depending on the holding period.
| Asset Type | Holding Period | Tax Rate |
|---|---|---|
| Listed Equity Shares / Mutual Funds | >12 months | LTCG: Exempt up to ₹1.25 lakh; 12.5% beyond |
| Real Estate | >24 months | LTCG: 12.5% (no indexation if property bought before July 23, 2024) |
| Other Assets | Varies | Taxed as per slab or 20% with indexation |
Understanding these rules helps taxpayers plan investments and tax liabilities better.
Read More: ITR Filing: Importance, Different Forms, Avoid Errors & Oversights
Summary
ITR Filing 2025 brings welcome simplifications for small taxpayers and business owners while tightening reporting for capital gains. The introduction of form flexibility, increased asset disclosure limits, and clearer capital gains classification benefits a wide range of taxpayers.
CaptainBiz encourages taxpayers to stay informed, maintain accurate financial data throughout the year, and file returns well ahead of deadlines. With the right knowledge and digital tools, tax filing can be a smooth, stress-free experience.
For more updates on tax compliance, GST filing, and business management, visit CaptainBiz — your trusted partner in navigating the complexities of Indian taxation.
Frequently Asked Questions (FAQs) – ITR Filing 2025
1. Which ITR form should I use for FY 2024-25?
The correct ITR form depends on your income source. For salaried individuals earning below ₹50 lakh with no capital gains, ITR-1 is suitable. If you have capital gains or own multiple properties, use ITR-2. Business owners and professionals should use ITR-3 or ITR-4 based on income type.
2. Can I file ITR-1 if I have capital gains from mutual funds?
Yes, if your long-term capital gains (LTCG) from listed shares or mutual funds are up to ₹1.25 lakh, you can file using ITR-1. If it exceeds this limit, you must file ITR-2.
3. What is the deadline for filing ITR for AY 2025-26?
For individuals and HUFs (non-audit cases): July 31, 2025
For taxpayers requiring audit: October 31, 2025
For transfer pricing cases: November 30, 2025
4. What has changed in the ITR forms this year?
The key changes include simplified reporting of capital gains for salaried taxpayers, updated asset declaration limits for business owners (now ₹1 crore), and mandatory classification of capital gains based on sale date (before or after July 23, 2024).
5. What is the new rule on real estate capital gains?
If you sell a real estate property bought before July 23, 2024, you can opt for a 12.5% tax rate without indexation, instead of the earlier 20% with indexation. This change must be reflected in your ITR form based on the new reporting format.
6. Do I have to declare all my assets while filing ITR-3?
Only if your total income exceeds ₹1 crore, you must disclose detailed assets and liabilities under Schedule AL in ITR-3. Below this limit, you are exempt from this disclosure.
7. How can CaptainBiz help with my ITR filing?
CaptainBiz simplifies your billing, expense tracking, and GST compliance—making it easy to maintain accurate financial records throughout the year. These records support smooth, error-free ITR filing and reduce the burden during tax season.
8. What happens if I miss the ITR filing deadline?
Missing the deadline can lead to a late fee up to ₹5,000, interest on tax due, and loss of certain deductions or carry-forward benefits. It’s best to file early and avoid last-minute rush.
