The Income Tax Department has released an updated ITR-7 form for Assessment Year 2025-26, affecting tax-exempt entities like charitable trusts, political parties, and research institutions.
The latest modifications, influenced by the Finance Act 2024, introduce new reporting guidelines for capital gains, buyback loss adjustments, and deductions for housing loan interest.
Who Needs to File the ITR-7 Form?
This form applies to organizations covered under sections 139(4A), 139(4B), 139(4C), or 139(4D) of the Income Tax Act. These entities are not profit-driven but must disclose their income for tax compliance. The list includes universities, colleges, religious trusts, and scientific research groups.
Key Changes Introduced
- Capital Gains Reporting: Gains must now be reported based on transaction dates to align with new rules effective July 23, 2024.
- Buyback Loss Adjustments: Organizations can now offset losses from share buybacks against dividend income to prevent double taxation.
- Housing Loan Interest Disclosure: New fields have been added to facilitate reporting of interest paid on house property loans.
- TDS Section Code Specification: Entities must now explicitly mention the relevant TDS section code for deductions.
How to File?
The filing window for AY 2025-26 is yet to open, but organizations will need to submit their returns electronically. Entities requiring audits or political parties must file using a digital signature.
With these updates, tax compliance for non-profit institutions is expected to be smoother and more transparent.
