Is owning multiple floors in the same residential building equivalent to owning more than one residential property? And if that is the case, will the concerned individual not be eligible to claim a long-term capital gains (LTCG) exemption from the sale of his/her capital assets under Section 54 of the Income Tax Act?

In a recent verdict, the Delhi High Court noted that ownership of multiple floors in the same building does not amount to owning more than one residential property, a prerequisite for claiming long-term capital gains exemption under Section 54F.

“We find it difficult to accept that, in the given facts, different floors of a house are required to be considered as multiple residential houses,” ruled the high court.

Read on to know the tax-related implications of this judgment and how this will impact homeowners across the country.

The Income Tax Appellate Tribunal (ITAT) Mumbai recently exempted an NRI step-brother from paying any income tax after the tax department added Rs 7.88 crore income in his Income Tax Return (ITR) on which they asked him to pay the appropriate income tax. In this case, the step-brother received a property completely free of cost in Mumbai from his step-sister as a gift in 2016. This Mumbai property originally belonged to their father and he gifted to her in 2003. Moreover, the property’s stamp duty of Rs 38.3 lakh was also paid by the stepsister herself when she gifted it to him. In 2021 he tried to sell this property and this is when the issue caught the income tax department's attention.

The Central Board of Direct Taxes (CBDT) has released the updated Income Tax Return Form 7 (ITR-7) for the assessment year 2025-26 (financial year 2024-25). The new form, notified in line with amendments introduced in the Finance Act, 2024, applies to entities such as charitable or religious trusts, political parties, research institutions, and universities, among others.

Who Should File ITR-7?
Entities required to furnish returns under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act must use ITR-7. These include:

Charitable and religious trusts claiming exemptions under Section 11
Political parties under Section 139(4B)
Scientific research bodies, news agencies, colleges, universities, and other notified institutions
Entities claiming exemptions under sections like 10(23C) and 10(21)
These organizations typically operate on a not-for-profit basis and avail of exemptions under specific provisions of the law.

Political parties, charitable trusts, universities and research bodies now require to disclose more information on income from foreign contributions, voluntary donations, accumulated income, and application of funds. The Central Board of Direct Taxes (CBDT) notified a revised Income-tax Return Form ITR-7, Monday, effective April 1, 2025, for assessment year 2025-26. The ITR 7 is filled by political parties, charitable trusts and educational, research institutions.

The updated form also introduced compliance checks for specified violations that could lead to denial of exemption.

The changes aim to improve transparency, given the abuse of tax exemption in the past by some political parties and charitable institutions.

The Income Tax Department has notified the income tax return forms for FY 2024-25 (AY 2025-26), incorporating the changes in tax laws announced in the July 2024 budget. However, taxpayers will have to wait for the release of the ITR filing e-utilities on the income tax portal to file their ITR.

ET Wealth Online explains the nine changes made in this year's ITR forms that will make your ITR filing process easier for FY 2024-25 (AY 2025-26).

Changes in ITR forms for FY 2024-25 (AY 2025-26)
1. Expansion of eligibility to file ITR 1 and ITR 4: This year, the Income Tax Department has expanded the eligibility by relaxing the eligibility criteria, making more taxpayers eligible to file their tax return using ITR 1 and ITR 4. The new rules allow even taxpayers with long-term capital gains from equity and equity mutual funds to file a tax return using ITR1 and ITR 4 (as applicable), provided the capital gains do not exceed Rs 1.25 lakh.

The Income Tax Department has recently updated the capital gains taxation table and this is important information since the rate of capital gains tax both long term (LTCG) and short term (STCG) is different for different asset classes. Do note this tax rate is applicable for individuals under both new and old tax regime, as these are all special rate incomes.

“Determination of Tax in certain special cases: Since all the incomes are not taxable at the same rate. The document provides a list of Capital Gains/Incomes arising out of certain securities eligible for special tax rates. It contains details with respect to the eligible assessee, security, or tax rates etc.,” said the Income Tax Department.

Capital gains (LTCG & STCG) income tax rate on equities, others
Here’s the table released by the Income Tax Department:

Mihir Tanna, associate director, S.K Patodia LLP says: “Indian Income Tax provisions specified a certain type of income which is not taxable at slab rate but taxable at special rate like sale of equity shares/units of equity mutual funds through recognised stock exchange.

A fresh ITR 5 form has been notified by the Central Board of Direct Taxes (CBDT), effective April 1, replacing the earlier version used for firms, LLPs, Association of persons (AOPs), Body of Individuals (BOIs), and similar entities.

“In exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. (1) These rules may be called the Income-tax (Fourteenth Amendment) Rules, 2025. (2) They shall come into force with effect from the 1st day of April, 2025. 2.

The Central Board of Direct Taxes (CBDT) notified the Income Tax Return form-2, or ITR-2, for FY2024-2025 on May 5, 2025. ITR 2 is relevant for the majority of taxpayers, especially salaried employees and pensioners. The form will be effective retrospectively from April 1, 2025, i.e., since the beginning of the current financial year.

Notably, individuals who have salary or pension income or earn income from more than one house property are eligible to file their income tax return using ITR-2. Importantly, any income from capital gains or losses on the sale of property or other investments, either long-term or short-term, is to be reported in this ITR.

The income-tax department has set an ambitious target to dispose of over 200,000 cases, involving an aggregate disputed amount of Rs 10 lakh crore, lying with the first forum of appeal, in the current financial year.

This compares with over 1,72,000 cases resolved at the Commissioner of Income Tax (Appeals) stage in FY25, where the locked amount was about Rs 6.3 lakh crore.

Going by the trend in recent years, the revenue department manages to lay its hands on roughly a third of the disputed amount, immediately after such mutual resolutions.

If the targetted number of cases are resolved by the CIT (Appeals) in FY26, it would result in not only a big jump in tax receipts, but could also improve the liquidity position of hundreds of businesses, enabling them not only to meet operational costs, but even scale up capital expenditure.

The CBDT has directed income-tax officials to "closely" monitor top advance tax payers and identify bogus claims of exemptions and deductions as part of the strategy to improve direct tax collections during the current financial year.

Official sources told PTI that the Central Board of Direct Taxes, the policy-making body for the department, had recently issued the central action plan (CAP) for 2025-26 that acts as the guiding light to steer 'key performance areas' for the department vis-a-vis revenue collection work.

The Union government has set a target of Rs 25.20 trillion for the I-T department under the direct taxes head for the current fiscal, as per the Budget estimates presented in February.

The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Form 3 (ITR-3) for Assessment Year 2025-26, applicable for income earned in the financial year 2024-25. Form ITR-3 applies to individuals and Hindu Undivided Family (HUF) earning income from profits and gains of business or professionals like doctors, lawyers, consultants or freelancers.

On April 29, the income tax department had notified ITR-1 and ITR-4 forms for AY 2025-26, and made it easier for individuals with long-term capital gains (LTCG) of up to Rs 1.25 lakh from listed equities to file returns.

The income-tax department has made significant changes in ITR3. The threshold for reporting assets and liabilities (under Schedule AL) has been raised from Rs 50 lakh to Rs 1 crore, reducing the disclosure burden on middle-income taxpayers.

If you're a partnership firm, LLP, or Association of Persons filing taxes this year, there’s a new Income Tax Return form you need to get familiar with. The Central Board of Direct Taxes (CBDT) has notified the new ITR-5 form for Assessment Year 2025–26 via Notification No. 42/2025, effective from April 1, 2025—and it comes packed with changes that could impact your reporting, deductions, and refund timelines.

1. Capital Gains Now Split by Key Date
One of the biggest updates lies in Schedule CG, where capital gains are now reported in two segments:

Before July 23, 2024: For transactions before key Finance Act changes took effect.

On or After July 23, 2024: For post-amendment gains or losses.
This bifurcation helps align gains with applicable tax treatments and gives tax officers clearer audit trails.

ITR-3 For Income Tax Return Filing 2025: The Central Board of Direct Taxes (CBDT) has notified Income Tax Return Form 3 (ITR-3) for Assessment Year 2025-26, applicable for income earned in the financial year 2024-25. While the form has been officially released, the utility for filing it electronically is still awaited.

It comes after the income tax department on April 29 notified ITR-1 and ITR-4 forms for AY 2025-26, and made it easier for individuals with long-term capital gains (LTCG) of up to Rs 1.25 lakh from listed equities to file returns.

The Income-Tax (I-T) Department has invoked the benami law to fish out information from a few payment gateway (PG) companies.

At least two firms have been told to disclose the identities of persons linked to a string of United Payment Interface (UPI) IDs, the entities who received money, and details like transaction date, amounts, and bank account numbers.

Gateways offer a network for customers to send money to businesses and merchants. Shell companies posing as merchants sometimes register themselves with PGs to move money.

The tax office, probably based on feedback it has received, would verify whether some merchants are holding money on behalf of others; or, if sham merchants are helping fund remitters book bogus expenses to evade tax. Here, the receiver later returns the funds in cash to the sender.

The Central Board of Direct Taxes (CBDT) has notified the income tax return forms 1 and 4. The notification of the ITR forms have come after a long wait. The notified ITR forms are applicable for the financial year 2024-25 and the assessment year 2025-26. This means that incomes earned between April 1, 2024, and March 31, 2025, must be reported to the government using the forms now notified.

It is important to note that not all taxpayers can file their income tax returns using the notified forms. Depending upon the source and nature of income, the income tax department comes up with different forms. There are eligibility conditions associated with each form that a taxpayer must satisfy to be eligible to file their income tax returns using the currently notified ITR forms.

The CBDT instructed every jurisdiction within the I-T Dept to carry out at least 1 major search and seizure operation by July 31, and 2 more between August and March 2026, the report said.

In a major move to combat black money and tax evasion, the Central Board of Direct Taxes (CBDT) has reportedly instructed the Income Tax Department's field formations to implement an aggressive, time-bound strategy aimed at expanding the tax net.

According to a media report, the CBDT anticipates uncovering undisclosed income worth an estimated Rs 2.4 lakh crore during the current financial year, stated IANS.

Under the new directive, every jurisdiction within the Income Tax Department must carry out at least one major search and seizure operation by July 31. Additionally, between August and March 2026, each jurisdiction is expected to conduct two more significant operations, reported NDTV Profit.

The income tax department on Thursday said taxpayers will not be allowed to claim deduction for expenditures incurred to settle proceedings initiated under four laws, including the Sebi and the Competition Act.

In a notification issued on April 23, the Central Board of Direct Taxes (CBDT) notified that any expenditure incurred to settle proceedings initiated in relation to contravention or defaults under the four specified laws shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.

The four laws are the Securities and Exchange Board of India Act, 1992; the Securities Contracts (Regulation) Act, 1956; the Depositories Act, 1996; And the Competition Act, 2002.

The Central government has introduced changes to the Income Tax Act, 1961, expanding the scope of the Tax Collected at Source (TCS) on luxury goods. Starting April 22, 2025, TCS will be applicable to 'specified range' of luxury goods valued over ten lakh rupees, including items like wristwatches, art pieces, yachts, and more.

Below are comprehensive FAQs on the new provisions, along with the list of luxury goods that will be subject to TCS:
What changes were brought in section 206C(1F) of the Income Tax Act, 1961 through Finance (No. 2) Act, 2024?
Earlier, Section 206C(1F) provided for collection of TCS on the sale of motor vehicles of value exceeding Rs 10 lakh.
Through the Finance (No. 2) Act, 2024, Section 206C(1F) was amended to include a wider range of luxury goods.

India is spawning a new rich class, especially in its small towns, which splurges on personal luxury goods with abandon but often escapes the income tax net. But not anymore. The July 2024 Budget had proposed to bring the expenses made on luxury goods by the rich under the ambit of TCS (Tax collected at source) if cost of luxury goods is more than Rs 10 lakh. This tax is now taking effect from April 22, 2025. From wrist watches to art pieces to yachts to handbags, purses and shoes to golf kits, a number of luxury goods will now attract TCS.

However, with this new TCS, the government is not intending to bulk up its direct tax revenues. Once the TCS is collected from the buyer, it is the seller's duty to deposit the same against the buyer’s PAN.

Many salaried individuals claim tax exemption on house rent allowance (HRA) by paying rent to family members, such as parents. While this is legally permissible, the Income Tax Department has intensified scrutiny of such claims.

Increased scrutiny

Tax authorities say they have observed instances where individuals claimed HRA exemption without fulfilling rules to do so.

Common issues include:

Lack of a formal rental agreement.

Rent payments made in cash, or lacking bank transaction proof.

Absence of rent receipts.

Landlords not declaring rental income in their tax returns.

Such discrepancies raise flags, prompting the department to issue notices seeking clarification to many individuals recently.