For tax assessees, AY 2025-26 is likely to be one of the years with the most significant changes in the way income tax returns (ITRs) are filed. Since the last ITR filing season, the Income Tax Department has introduced several changes, including updates to ITR forms, tax slabs, and other regulations.

The Income Tax Department has now issued new guidelines related to mandatory scrutiny of Income Tax Returns for the financial year 2025-26 (assessment year 2026-27). These guidelines were issued by the Central Board of Direct Taxes (CBDT) on June 14, 2025.

The ITR filing process is in full swing, with nearly 25 lakh income tax returns already filed and about 23 lakh verified. The most important development is that the Income Tax Department has started processing returns, as reflected on the tax portal, which shows that some ITRs have already been processed for the current assessment year. This means taxpayers with refunds due will start receiving them soon.

This year, the return filing started relatively late. The main reasons for this were the late release of ITR forms, technical changes in the e-filing utility, and time taken to update tax deduction (TDS) data.

“The jurisdiction of the Directorate of Public Grievances is hereby extended to Department of Revenue (Income Tax) and Central Board of Indirect Taxes and Customs (Customs related issues),” a notification issued by the Cabinet Secretariat said.

DPG helps to obtain responses to unresolved grievances on matters relating to some Central Government Departments and Organisations. It can help to obtain a response and resolution on these grievances from the department or organisation.

The Income Tax Department has sent a communication to thousands of individuals who have undertaken cryptocurrency transactions but failed to reflect this income in their returns, official sources said Friday.

These transactions pertain to assessment years 2023-24 and 2024-25, they said.

The department and its policy-making body, the Central Board of Direct Taxes (CBDT), suspect tax evasion and money laundering by certain "high-risk" people who are potentially using "unaccounted" income to invest in virtual digital assets (VDAs), commonly known as cryptocurrency.

Sources told PTI that the I-T Department has sent e-mails to thousands of defaulting people nudging them to file an updated Income Tax Return (ITR) if any income on account of crypto transactions has not been declared or mis-declared by them.

This communication is part of the NUDGE (Non-intrusive Usage of Data to Guide and Enable) campaign undertaken by the department with a philosophy of "trust taxpayers first" philosophy.

The Central Board of Direct Taxes (CBDT) is investigating instances of tax evasion and laundering of unaccounted income through cryptocurrency investments by high-risk individuals, income tax department sources stated.

Entities and individuals engaged in Virtual Digital Asset (VDA) transactions, who have failed to comply with the provisions of the Income-tax Act, 1961, have been identified for verification, the sources said. It is understood that the CBDT has recently issued emails to thousands of such defaulting taxpayers, urging them to review their income tax returns (ITRs) if any income from VDA transactions has not been properly disclosed.

Section 115BBH of the Income-tax Act, 1961—introduced through the Finance Act, 2022—imposes a flat 30% tax (plus applicable surcharge and cess) on income arising from the transfer of VDAs. The provision does not permit any deduction of expenses, other than the cost of acquisition. Further, the set-off of loss from VDA investment or trading is not allowed to be set off against any other income or for carry forward to subsequent years.

An non-resident Indian (NRI) residing in the United States of America had to go through a very challenging time when he sold a property in Pune for Rs 2 crore and followed the laid down procedure. The problem started when the buyer deducted 20% TDS on this property transaction and deposited it with the income tax department using a wrong TDS form. As a result of this, the TDS amount simply failed to show up in the NRI’s AIS. Without the TDS amount showing up in the AIS, the NRI could not claim it while filing Income Tax Return (ITR), resulting in a financial loss of Rs 18.68 lakh (20% TDS).

Moreover, the income tax department, unaware about this problem, issued a tax demand notice of Rs 46 lakh to this NRI as they deemed he sold the property and did not pay capital gains tax on it. The property buyer, however, claimed that he deposited the 20% TDS money with the income tax department and also showed a bank challan receipt for the same.

To give you a background context of this problem the property buyer deposited the 20% TDS in Form 26QB which relates to Indian residents. Since the property seller was NRI, the property buyer should have used Form 27Q to deposit the deducted 20% TDS.

Parliament’s select committee examining the Income Tax Bill, 2025, may not recommend any significant changes to the new provisions but only suggest "simplification of language" in some clauses to remove ambiguity, a source privy to the matter told Moneycontrol.

"The select committee has almost finalised its report (on the new bill)… There are no major recommendations," the person said. The committee, led by BJP MP Baijayant Panda, would submit its report to the government on the first day of the monsoon session, likely to begin in July’s third week.

The Income Tax Bill, 2025, was tabled by Finance Minister Nirmala Sitharaman in Parliament on February 13, as announced in the budget. The legislation seeks to repeal the Income Tax Act of 1961 and replace it with a simplified version. If passed, the new law will come into effect from April 1, 2026. Sources say the government is aiming to pass the bill in the upcoming winter session.

The Central Board of Direct Taxes, in the FAQs issued in February, had said that in the new bill, redundant provisions under the existing act have been removed; sub-sections and clauses have been used, instead of relying on provisos and explanations for exceptions and carve-outs; and a simplified system for cross-referencing of sections, sub-sections, clauses, etc., has been used.

Good news for those taxpayers who have any pending income tax refund due even after filing their income tax returns (ITR) on or before the deadline in 2024. The Income Tax Department has said such unprocessed ITRs for AY 2023-24 (FY 2022-23) will now be processed by them by November 30, 2025.

This announcement of AY 2023-24 pending ITR processing deadline extension by the tax department can mean either of these three things:

Tax refund: Once the said ITRs are processed, eligible taxpayers can get their due tax refunds with interest if any.
Tax demand notice: Some taxpayers may get a tax demand notice depending on what information the tax department finds out after processing the said ITR.
No refund no tax demand: The ITR is simply processed as it is i.e. without any tax refund or tax demand.

Every salaried employee who has an HRA component in salary and who wants to claim house rent allowance (HRA) income tax benefits need to submit the PAN number of the landlord if the annual rent is above Rs 1 lakh. Failing to submit the landlord's PAN to your employer for claiming rent HRA tax exemption, will result in losing the tax exemption.

Also submitting a false PAN number of landlords will result in you getting a tax notice and also losing the HRA tax exemption altogether. Earlier, the online ITR form or its utility did not have field to give details regarding the HRA. However, it has changed now, the income tax department has revised the utility, and it now requires taxpayers to give more details of the HRA claim by salaried employees. So does this mean that you have to give the landlord’s PAN card details while filing ITR?

Read below to know more about the importance of landlord’s PAN for your rent HRA tax exemption claim and what are the new compliance requirements for rent HRA tax exemption introduced in ITR filing of this year.

The Delhi High Court will soon to decide whether the tax department can retrospectively reopen old tax notices involving foreign assets—even if those notices were time-barred under earlier rules.

A division bench led by Justices Vibhu Bakhru and Tejas Karia was hearing a batch of petitions on 30 May – filed by companies such as UK Paints (Overseas) Ltd, BJN Holdings (India) Ltd, and KS Dhingra – challenging these reassessment notices under Section 148 of the Income Tax Act. It referred the matter to a larger bench for a final decision. The notices were issued between 2014 and 2021, covering assessment years that stretch back decades.

2012 amendment extended reassessment period
At the centre of the case is a 2012 amendment to the Income Tax Act that extended the reassessment period from six years to 16 years for cases involving foreign assets. After the amendment, which was aimed at tackling black money and undisclosed foreign assets, the department started issuing reassessment notices for older cases, some dating back to 1997.

The Central Board of Direct Taxes (CBDT) will undertake a detailed review of charitable entities and non-profit organisations to see if they are not being misused for terror financing or money laundering.

The review will be done in collaboration with agencies such as the Intelligence Bureau (IB), the Enforcement Directorate (ED) and the National Investigation Agency (NIA).

The CBDT will prepare a database of charitable institutions with foreign links, those receiving heavy foreign funds, or institutions that are registered but not filing returns or don't have much of a digital footprint, people aware of the details told ET.

The move comes after the department received information about the questionable role of some charitable institutions. Some of them received large amounts from across the border.

The board has asked officials to send notices by the end of June in cases that have been selected based on risk assessment or where it has received information from the IB, ED or NIA of links with any money laundering or terror financing cases, they said.

ITR Filing FY 2024-25: The Income Tax Department has activated its website incometax.gov.in for filing income tax returns using ITR-1 and ITR-4 forms. Eligible individuals can now submit their ITR via the e-filing portal for FY 2024-25 (AY 2025-26). Currently, only ITR-1 and ITR-4 submissions are available online, whilst those needing to submit ITR-2 or ITR-3 must wait for further updates.

Last month, the Income Tax Department had extended the deadline to file ITR for FY 2024-25 to September 15 from July 31.
Who can e-file ITR using ITR-1 for FY 2024-25?
The ITR-1 filing is allowed for Indian resident individuals who:
* Have a total annual income below Rs 50 lakh
* Earn from salary, one house property, family pension income, agricultural income (up to Rs 5000), and additional sources including:
* Savings Account interest
* Deposit interest (Bank / Post Office / Cooperative Society)
* Income Tax Refund interest
* Enhanced Compensation interest
* Other interest earnings
* Family Pension

The Income Tax Department has launched Excel-based offline utilities for ITR-1 and ITR-4 for the Assessment Year 2025-26, following a delay of nearly two months. These tools are designed to assist individual taxpayers with annual incomes under Rs 50 lakh, allowing them to prepare their income tax returns offline by entering income details, validating the data, and generating a JSON file for submission.

However, as noted by CA (Dr.) Suresh Surana, the e-filing portal required for online submission of these returns, is still not operational, hindering taxpayers who prefer or need an online interface for filing their returns. This delay has caused significant inconvenience to many taxpayers who rely on the online system for its ease of use and accessibility.

The Income-Tax (I-T) Department has on May 30 made available for taxpayers the facility of Excel Utility for ITR-1 and ITR-4 for AY2025-26.

In a post on social media platform X, the I-T Dept said, “Attention taxpayers! The Excel Utility for ITR-1 and ITR-4 for AY 2025-26 has been enabled and is now available for taxpayers.”

As on date, the I-T Dept notified income tax return (ITR) forms 1, 2, 3, 4 and 5. These forms are meant to be used for filing income tax returns (ITR) for FY 2024-25 / AY 2025-26.

On April 29, the department notified ITR-1 (sahaj) and ITR-4 (sugam). This was followed by notifying the ITR form 3 on April 30. Later, ITR forms 5 and 2 were notified on May 1 and May 3, respectively.

ITR-1: This form is meant for resident individuals with a total income of up to Rs 50 lakh.
ITR-2: ITR-2 can be filed by individuals or Hindu Undivided Families (HUFs) who are not eligible to file ITR-1 (Sahaj).
ITR-3: The ITR-3 form is meant for individuals and HUFs engaged in business or profession requiring the maintenance of elaborate books of accounts.

The New Income Tax Bill, 2025 has a provision with which non-residents Indians (excluding FIIs) can effectively pay a lower capital gains tax than allowed under the Income Tax Act, 1961. This provision is called ‘forex fluctuation benefit’ and using it NRIs can pay a lower long term capital gains tax (LTCG) on sale of unlisted equity shares of an Indian company.

As per calculations, if this beneficial provision in the new tax bill, 2025 is incorporated by the Indian government in the final act, then NRIs can pay as much as 72% lower long term capital gains tax when compared to before. The reason for this high percentage of savings in capital gains tax payment for NRIs is earlier under the old tax act of 1961, NRIs had to pay income tax on artificially high income due to depreciation of Indian Rupee (INR). This disadvantage is now removed and NRIs are only required to pay income tax on their actual gains in USD terms.

Read below to understand what the forex fluctuation benefit about which Income Tax Bill 2025 talks is about and how NRIs stand to gain from this benefit if the government implements it in the final income tax act.

The Income Tax Department has extended the due date for Income Tax Return (ITR) filing from July 31, 2025, to September 15, 2025. However, there is an unintended consequence of ITR filing deadline extension by income tax department for FY 2024-25 (AY 2025-26). This deadline extension may result in higher interest payout for many people claiming income tax refund this year including both Indian and NRI taxpayers.

Taxpayers can claim an income tax refund in their ITR, when their income tax liability is lower than the tax amount already deposited by them through TDS deduction, advance tax, etc. Under Section 244A, the income tax department has to pay simple interest of 0.5% interest on the whole or the excess amount of tax refund so refunded, for every month or part of a month. However, one has to remember that this interest on tax refund is taxable as income from other sources in the relevant year of earning.

Many taxpayers won’t mind this increased income as this income may still remain tax-free for them.

The Income Tax Department has extended the deadline to file Income Tax Returns (ITRs) for the assessment year 2025–26 from July 31 to September 15, 2025.

This extension in the deadline to file tax returns will provide more time to taxpayers for collecting documents and aligning with changes in guidelines and compliance norms.

“There have been many significant revisions in ITR forms, system development needs, and TDS credit reflections. This ensures a smoother and more accurate filing experience for everyone. Formal notification will follow,” the Central Board of Direct Taxes (CBDT) said in a social media post on ‘X’.

The notified ITRs for AY 2025-26 have undergone structural and content revisions aimed at simplifying compliance, enhancing transparency, and enabling accurate reporting, the tax department said in a release.

In a relief for crores of income tax assessees, the Central Board of Direct Taxes (CBDT) has extended the ITR (Income Tax Return) filing due date by 45 more days, until September 15, 2025. The earlier deadline for filing returns in non-audit cases is not required was July 31, 2025.

This has come as a big relief, especially for salaried taxpayers who usually start filing their returns after June 15, after receiving Form 16 from their employers. These taxpayers typically have less than 45 days to comply with their tax return filing obligations, as most companies begin releasing Form 16 for their employees in the third and fourth weeks of June.

It should be noted here that the deadline for filing income tax returns in cases where accounts need to be audited has not been changed. These taxpayers have to file their ITRs by October 31, 2025.

Let’s talk about something most Indian families experience: gifts during weddings. You’ve probably attended a wedding where the parents of the bride or groom receive ‘shagun’ or money from friends and relatives. Sometimes it’s a token, other times, it’s quite a lot.

Now here’s the big question: Is that money tax-free?

Well, according to a ruling by the Punjab & Haryana High Court in 2013, not always. In fact, if you’re the parent and the money was given to you during your child’s marriage, you could end up paying income tax on it.

Meet Rajinder Mohan Lal, a Chandigarh resident who received over Rs 21 lakh as gifts from friends and family during his daughter’s wedding.

Sounds normal, right? He even provided proof that this was just shagun from well-wishers.

But when he filed his income tax return in 2007-08, he didn’t include that Rs 21 lakh. The Income Tax Department wasn’t happy — and added the amount to his taxable income.

The income tax department recently notified the income tax return (ITR) forms to be used for filing tax returns for FY 2024-25 (AY 2025-26). However, unlike previous years, when the ITR forms were notified well in advance, this year they were notified by the end of April 2025. Further, the income tax department has yet to release the utilities, i.e. the online software/forms necessary for filing ITRs. Tax experts advise postponing the filing of ITRs until June 15, 2025, even though the ITR forms are available now.

ET Wealth online explains why it is advisable to defer filing your ITR till after June 15 and the problems you can face if you file it before.

TDS Certificates such as Form 16, Form 16A are issued latest by June 15
As per income tax rules, taxpayers should get their TDS certificates, such as Form 16 or Form 16A, latest by June 15.

Chartered Accountant Prakash Hegde says, "When the taxpayer has earned any income in the last quarter of FY 2024-25 (January 1-March 31, 2025) that is subject to TDS, the payer of that income has time until May 31, 2025, to file the eTDS return with the income tax authorities. The eTDS return captures the details of the income paid to the taxpayer and tax deducted on it."