Income Tax Return Forms ITR-1 & ITR-4 Notified for AY 2025-26: What’s New?

The Income Tax Department of India has officially notified ITR Form 1 (Sahaj) and ITR Form 4 (Sugam) for the Assessment Year 2025-26 (FY 2024-25), simplifying return filing for salaried individuals, small businesses, and HUFs.

🔍 Key Highlights of the Notification

  • New LTCG Limit for ITR-1: Taxpayers earning Long-Term Capital Gains (LTCG) up to ₹1.25 lakh during the financial year can now file ITR-1, easing compliance for small investors.

  • Simplified Filing for Businesses: ITR-4 can now be used by individuals, HUFs, and firms (excluding LLPs) with business or professional income up to ₹50 lakh.


📄 Who Can Use the New ITR Forms?

✅ ITR-1 (Sahaj)

Applicable for resident individuals with:

  • Total income up to ₹50 lakh

  • Income from salary

  • Single house property

  • Other sources (interest, dividends)

  • Agricultural income up to ₹5,000

  • LTCG up to ₹1.25 lakh under Section 112A

✅ ITR-4 (Sugam)

Designed for:

  • Individuals, HUFs, and firms (excluding LLPs)

  • Total income up to ₹50 lakh

  • Income from business or profession under presumptive taxation

❌ ITR-2

Required for individuals:

  • Earning LTCG above ₹1.25 lakh

  • Having capital losses to carry forward

  • Holding multiple house properties

  • Not earning income from business/profession


💬 Expert Opinion

Sandeep Sehgal, Partner-Tax at AKM Global, highlighted:

“The revised ITR forms are a welcome move, especially for salaried individuals and small investors. The inclusion of LTCG up to ₹1.25 lakh in ITR-1 will significantly reduce the compliance burden.”

He added,

“These changes reflect the government’s commitment to simplify tax filing, encourage early compliance, and support digital governance.”


🧾 Conclusion

Whether you’re dealing with a cheque bounce under Section 138 of the NI Act or preparing to file your Income Tax Return for AY 2025-26, the recent legal and tax updates aim to make compliance more accessible, faster, and less complex for the average taxpayer.

For timely legal assistance or tax filing guidance, consult a professional CA or legal advisor to ensure error-free compliance.

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