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 form requires the assessee to report capital gains separately for transactions before and after July 23, 2024, due to changes in capital gains rules.
The notification says that capital loss on share buybacks can be claimed if dividend income is shown as ‘income from other sources’, applicable from October 1, 2024. The form also captures deductions claimed under Section 24(b) for interest paid on borrowed capital for house property and must report specific TDS section codes for compliance and verification. Digital signature is mandatory for political parties and entities requiring account audits.
Source #ET
