New ITR Forms: Good News! Salaried and small investors can now easily file ITR returns
ITR Filing 2025: By making changes in ITR-1 and ITR-4 forms, the government has made it easier for small investors and salaried people to file returns. Now those with small LTCG will not need to file ITR-2. Know the full details.
ITR Filing 2025: The Central Board of Direct Taxes (CBDT) has notified Income Tax Return (ITR) Forms 1 (Sahaj) and 4 (Sugam) for the assessment year 2025-26. This step has been taken with the aim of simplifying return filing especially for salaried and small investors whose long term capital gain (LTCG) from listed securities and mutual funds is up to ₹ 1.25 lakh per annum.
ITR-2 is no longer mandatory
Till now, even if a person’s LTCG income is exempt, he still had to fill detailed forms like ITR-2 or ITR-3. According to the new notification, such taxpayers will now be able to file their returns through simple forms ITR-1 or ITR-4.
EY India Tax Partner Samir Kanabar told news agency PTI that it is a ‘positive step taken keeping in mind the convenience of taxpayers’. According to him, this change will reduce the stress associated with return filing and promote voluntary compliance.
Technical changes made in the form
CBDT has made some important changes in the form, which will facilitate salaried and small investors.
Dropdown options have been added for sections 80C, 80GG and other deductions. This will increase transparency and accuracy in selection.
TDS (Tax Deducted at Source) information will now have to be given section-wise. This will make the process of tax credit more clear.
According to PTI, the return utility will soon be available on the portal of the Income Tax Department. The last date for return filing has been kept as 31 July 2025 for those taxpayers who do not need audit.
Why was the notification delayed?
Usually ITR forms are notified before the end of the financial year. According to a PTI report, the reason for the delay this time is believed to be the new Income Tax Bill presented in Parliament in February 2025, on which the Revenue Department was more focused.
Tax experts react
Divya Baweja, partner, Deloitte India, says, “ITR-1 and ITR-4 are the same as last year. But the inclusion of LTCG up to ₹ 1.25 lakh under section 112A is an important reform, which will provide relief to lakhs of taxpayers.” At the same time, Sandeep Jhunjhunwala, tax partner, Nangia Andersen LLP, says that now salaried people do not need to fill the complex ITR-2 for minor capital gains. This is a practical and welcome change.
Who can fill Sahaj and Sugam?
ITR-1 (Sahaj): Indian citizens with a total annual income of up to ₹ 50 lakh. Those whose income is from salary, rent from one house, and other sources (such as interest). Agricultural income should not exceed ₹5,000.
ITR-4 (Sugam): Individuals, HUFs (Hindu Undivided Families), or firms (except LLPs) whose income is up to ₹50 lakh, and who earn income from business or profession under the presumptive taxation scheme.
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