/ INCOME TAX

Highlights of Key changes in new ITR Forms 3, 4, 5, 6 & 7

Income Tax Return (ITR) Forms for AY 2025–26

Highlights of Key changes in new ITR Forms 1,2 3, 4, 5, 6 and 7

Summary of ITR Form Applicability – AY 2025–26

Salary Income

Nature ITR-1 ITR-2 ITR-3 ITR-4
Salary/Pension (Ord. Resident) ✅ ✅ ✅ ✅
Salary/Pension (Not Ord. Resident/Non-Resident) ❌ ✅ ✅ ❌
Director in a company ❌ ✅ ✅ ❌
ESOP deferred tax (eligible startups) ❌ ✅ ✅ ❌

Income from House Property

Nature ITR-1 ITR-2 ITR-3 ITR-4
One house (no carry forward loss) ✅ ✅ ✅ ✅
Carry forward loss from HP ❌ ✅ ✅ ❌
More than one house property ❌ ✅ ✅ ❌

Applicability of ITR 1 to 7 for FY 2024-25 (AY 2025-26)

Business/Profession Income

Nature ITR-1 ITR-2 ITR-3 ITR-4
Professional income (not presumptive) ❌ ❌ ✅ ❌
Presumptive: Sec 44ADA (Resident professional) ❌ ❌ ✅ ✅
Presumptive: Sec 44AD, 44AE (Ord. Resident only) ❌ ❌ ✅ ✅
Commission, brokerage, etc. ❌ ❌ ✅ ❌
Speculative income, F&O, betting, race horses ❌ ❌ ✅ ❌

Capital Gains

Nature ITR-1 ITR-2 ITR-3 ITR-4
LTCG u/s 112A (above ₹1.25L) ❌ ✅ ✅ ❌
LTCG (Other provisions) ❌ ✅ ✅ ❌
STCG under 111A ❌ ✅ ✅ ❌
STCG not under 111A ❌ ✅ ✅ ❌
Capital gains from sale of property ❌ ✅ ✅ ❌

Income from Other Sources

Nature ITR-1 ITR-2 ITR-3 ITR-4
Family Pension (Ord. Resident) ✅ ✅ ✅ ✅
Family Pension (Non-Resident/Not Ord. Res.) ❌ ✅ ✅ ❌
Lottery, gambling, etc. ❌ ✅ ✅ ❌
Other special rate income ❌ ✅ ✅ ❌
Dividend > ₹10L under 115BBDA ❌ ✅ ✅ ❌

Unexplained Income / Deductions

Nature ITR-1 ITR-2 ITR-3 ITR-4
Unexplained credit, taxed @60% (115BBE) ❌ ✅ ✅ ❌
Deduction under 57 (other than family pension) ❌ ✅ ✅ ❌
80QQB, 80RRB royalty deduction ❌ ✅ ✅ ❌
10AA (SEZ Unit) deduction ❌ ✅ ✅ ❌

Agriculture / Tax Limit

Nature ITR-1 ITR-2 ITR-3 ITR-4
Agri. income > ₹5,000 ❌ ✅ ✅ ❌
Income > ₹1 crore (non-business) ❌ ✅ ✅ ❌

Tax Filings and Compliance

Nature ITR-1 ITR-2 ITR-3 ITR-4
Disclose > ₹1L electricity bill ✅ ✅ ✅ ✅
Deposit > ₹1Cr in current account ✅ ✅ ✅ ✅
Expenditure > ₹2L foreign travel ✅ ✅ ✅ ✅
Professional income > ₹50L ❌ ❌ ✅ ❌

Foreign Income / Assets

Nature ITR-1 ITR-2 ITR-3 ITR-4
Foreign income/assets/signing authority ❌ ✅ ✅ ❌
Section 5A apportionment (Goa/Portuguese civil code) ❌ ✅ ✅ ❌

Other Assessments

  • Firms (other than LLPs) under presumptive scheme → ✅ in ITR-4

  • LLPs, AOPs, BOIs, Trusts, Local Authorities, Artificial Juridical Persons → ❌ in ITR-1 to ITR-4

  • Institutions under Sec 11, 139(4A–4F) → File ITR-7

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@caindelhiindia.com

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