New rules about ITR disclosures, capital gains, foreign income: Explained

In an exclusive interview with The Federal, chartered accountant Ankit Rahangdale from fintech firm Pice explains the sweeping tax reforms impacting Indian taxpayers. Speaking to Rachel Chithra, Rahangdale details how the 2025 assessment year brings stricter capital gains reporting, foreign income scrutiny, and AI-powered compliance - changes that demand immediate attention from retail investors and salaried professionals alike.

What's changed in ITR forms for capital gains reporting?

This year, all ITR forms demand more detailed disclosures. For ITR-2 filers, every equity transaction now requires script-wise details – ISIN codes, purchase dates, number of shares, and values. Earlier, buybacks were considered tax-efficient, but now even these need exhaustive documentation. The department wants to cross-verify all data with brokers and registrars directly.

Also Read: Income-tax | Direct Tax Code should bring overhaul, not cosmetic changes

How does this affect basic ITR-1 filers?

Even simple deductions under Section 80C now require policy-level details. Earlier, you could just declare the ₹1.5 lakh investment limit. Now, you must provide LIC policy numbers or health insurance premium details. The department wants granular data for every claim.

Will NRIs and freelancers with foreign income face more scrutiny?

Since the AIS (Annual Information Statement) implementation, all income linked to PAN gets automatically flagged. If any foreign income or freelance earnings are missing from your ITR, the system detects mismatches instantly. Hiding income has become virtually impossible.

Also Read: Direct tax mop-up rises 21 pc to Rs 4.62 lakh cr on higher advance tax revenues

How does the revised cost inflation index (376) impact property sales?

Properties bought before July 23, 2024 still get indexation benefits. For example, if you purchased in 2005, we recalculate the acquisition cost using current year's index (376). This reduces your taxable profit significantly. But post-July 2024 purchases won't qualify for indexation at all.

What does shifting to a single tax year mean?

It's primarily terminology simplification. Instead of separate financial (FY) and assessment years (AY), we'll just have one unified year. This reduces confusion for new taxpayers but doesn't change compliance requirements materially.

Also Read: FM responds to LinkedIn user’s viral post saying he’ll ‘commit crime’ for GST no

Is India's tax regime becoming stricter with ₹20,000 crore recoveries?

That figure signals a new phase of tech-driven enforcement. With AI surveillance, the department now tracks even minor discrepancies. Their 1.9 lakh crore target shows how seriously they're pursuing leakages.

Are the proposed device access powers concerning?

Section 132 already allows device seizures during raids. While expanded digital access needs clearer boundaries, taxpayers should know – the department has longstanding rights to examine financial data on personal devices during investigations.

(The content above has been generated using a fine-tuned AI model. To ensure accuracy, quality, and editorial integrity, we employ a Human-In-The-Loop (HITL) process. While AI assists in creating the initial draft, our experienced editorial team carefully reviews, edits, and refines the content before publication. At The Federal, we combine the efficiency of AI with the expertise of human editors to deliver reliable and insightful journalism.)