Crores across the country There is big news for taxpayers who file income tax returns. The Income Tax Department has notified ITR Forms 1 and 4 for the Assessment Year 2025-26 (Assessment Year). It can be admitted by individuals and institutions with total income up to Rs 50 lakh. Now in a financial year, people receiving long-term capital gains (LTCG) up to Rs 1.25 lakh can also file ITR-1. Earlier such people had to file ITR-2. According to the notification, individuals with income up to Rs 50 lakh, HUF, companies and FY can start filing ITRs from business in 2024-25 (April-March) and other professional for earned income.
Form 1 (spontaneous) for individual taxpayer
ITR Form 1 (Spontaneous) and ITR Form 4 (Sugam) are simple forms that suit the needs of small and medium taxpayers in large numbers. ‘Sahaj’ can be admitted by a person whose annual income is up to Rs 50 lakh and earns an income of up to Rs 5,000 per year from salaries, other sources (interest) and agricultural income. ‘Sugam’ can be admitted by such individuals, Hindu undivided families (HUFs) and companies (in addition to limited liability partnership (LLP)), whose total annual income is up to Rs 50 lakh and has any professional income from business. ITR-2 is admitted by individuals and HUFs who do not have income, business or professional benefits or receipt.
What changes were made in the form?
Sandeep Sehgal, a partner of Tax and Consulting Company AKM Global, said that the Central Board of Direct Taxes (CBDT) has made significant changes in the Income Tax Return (ITR) form for the assessment year 2025-26, especially the salaried taxpayers who get long-term capital benefits (LTCG) will benefit. He said, with the latest amendments, individuals can now use simple ITR-1 (comfortable) or ITR-4 (Sugam) form. If their LTCG under Section 112A does not exceed Rs 1.25 lakh and has no capital deficit to take forward or ‘set off’.
Small taxpayers will get relief
Sehgal said, this change, streamlines the process of filing tax, which makes it more accessible and less cumbersome to small investors and salaried people. This promotes timely and accurate compliance. ”
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