Introduction:
The ITR forms for AY 2025–26 have been officially notified by CBDT via Notifications No. 40 to 42/2025 dated 29.04.2025. These forms introduce important changes aligned with the updated tax regime, income disclosures, and compliance requirements for individuals and businesses.
This blog breaks down the changes in a simple format—whether you’re filing ITR-1 or ITR-5, here’s what you need to know.
Key Changes in ITR Forms for AY 2025–26
CBDT has notified the following ITR forms via Income-tax (Fourth Amendment) Rules, 2025:
| Form | Applicable To | Major Change Highlights |
|---|---|---|
| ITR-1 | Individuals (Resident, Income < ₹50L, 1 house property) | New disclosure for old/new regime selection pre-filled based on Form 10-IEA |
| ITR-2 | Individuals/HUFs (more than one house property, capital gains, etc.) | No major change, aligned with new regime defaults |
| ITR-3 | Individuals/HUFs with business/profession income | New Schedule ‘VDA’ for crypto/NFT disclosures; enhanced reporting under presumptive income |
| ITR-4 | Individuals, HUFs, and Firms (opted for Section 44AD/ADA/AE) | Default tax regime selection shown; reduced clutter for ease of MSMEs |
| ITR-5 | LLPs, AOPs, BOIs, etc. | Updated disclosures for pass-through income from investment funds |
New Defaults Under Section 115BAC
From AY 2024–25 onwards, the new tax regime under Section 115BAC(1A) is the default option.
- Taxpayers can still opt for the old regime by submitting Form 10-IEA before filing.
- ITR forms will now automatically show the default regime, unless Form 10-IEA is filed.
- The selection is pre-filled, but editable where permitted.
Introduction of Schedule VDA (Virtual Digital Assets)
Applicable for ITR-3:
- Introduced to report crypto, NFTs, and other digital asset transactions
- Requires:
- Date of acquisition & transfer
- Cost of acquisition
- Sale consideration
- Gain/loss details
This move is in line with Section 115BBH, which taxes VDAs at 30%.
Simplified Reporting for Small Businesses
Under ITR-4 and ITR-3:
- Presumptive income fields (44AD/ADA/AE) simplified
- Fewer mandatory balance sheet disclosures for those not maintaining books
- Useful for MSMEs and freelancers under ₹2 crore/₹50 lakh turnover
Expert View:
“Taxpayers must double-check if they’ve opted out of the new regime in time,” says CA Rajeev Nair.
“Once Form 10-IEA deadline lapses, you can’t shift to the old regime. Many miss this and pay more tax.”
Official References:
- CBDT Notification No. 40/2025 – Rule 12 Amendment
- CBDT Notification No. 41/2025 – ITR-1 & ITR-4 Forms
- CBDT Notification No. 42/2025 – ITR-2, ITR-3, ITR-5 Forms
Summary
CBDT has notified new ITR forms for AY 2025–26 with major updates on tax regime defaults, VDA disclosures, and MSME reporting. Taxpayers must check Form 10-IEA deadlines and ensure correct regime selection before filing to avoid errors or higher tax liability.
FAQs
Q1. Can I switch from the new regime to the old one while filing ITR?
Only if you file Form 10-IEA within the due date.
Q2. Which ITR form to use for freelance income under ₹50L?
Use ITR-4 under Section 44ADA if you’re opting for presumptive taxation.
Q3. Is reporting crypto gains mandatory now?
Yes. From AY 2025–26, ITR-3 includes Schedule VDA to report such gains.
Closing CTA:
Confused about which ITR form to use or whether to opt for the old regime?