The Central Board of Direct Taxes (CBDT) has introduced the Revised ITR-7 Form AY 2025-26 through Notification No. 46/2025 dated May 9, 2025. This form applies to a broad range of tax-exempt entities such as charitable and religious trusts, political parties, educational institutions, medical institutions, and research bodies.
These organizations, which benefit from exemptions under various sections of the Income-tax Act, 1961, are required to use ITR-7 for annual income tax compliance. The updated form reflects the amendments made in the Finance Act, 2024, aiming to improve transparency, accuracy, and regulatory alignment.
Highlights of the Revised ITR-7 Form AY 2025-26
One major update requires entities to report capital gains separately for transactions conducted before and after July 23, 2024, aligning with the revised computation rules under the Finance Act.
Entities can also now claim capital losses from share buybacks after October 1, 2024, provided related dividend income was previously reported under “Income from Other Sources.” This provides some flexibility in tax planning.
For tax-exempt organizations, the disclosure rules have become more detailed. Entities must now provide:
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A breakup of voluntary contributions
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Details of application of income
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Funds accumulated for future use
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A clear split between programme and non-programme (administrative) expenses
Updates to TDS reporting now require entities to mention specific section codes under Schedule-TDS. For those reporting house property income, interest claimed under Section 24(b) must also be disclosed to support the deduction.
Additionally, the form mandates the reporting of:
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FCRA registration (if foreign donations are received)
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Any registrations under SEBI or the Ministry of Corporate Affairs (MCA)
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The specific section of the Income-tax Act under which exemption is claimed
Failure to provide these details could result in loss of exemption under Section 13 of the Act.
Filing Deadlines for AY 2025–26
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📅 July 31, 2025 – For entities not subject to audit
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📅 October 31, 2025 – For entities subject to audit
To avoid penalties and ensure continued tax-exempt status, entities should prepare in advance, verify required documents, and file the Revised ITR-7 Form AY 2025-26 accurately and on time.
