ITR Filing 2025: Salaried taxpayers can choose either ITR-1 or ITR-2, know the difference between the two

This year some changes have been made in the income tax return forms. In the Union Budget presented in July last year, the government had changed the rules of capital gains tax. Then in the budget presented in February this year, the government had made changes in the tax slabs in the new regime of income tax. Therefore, it became necessary to change the income tax forms.

The deadline for filing Income Tax Return (ITR) has been extended. Experts say that despite the extension of the deadline, taxpayers should complete their preparations. However, salaried taxpayers cannot file income tax returns until they receive Form 16. Employers issue Form 16 to their employees. This is necessary for filing income tax returns. It contains information about the employees’ salary income, TDS and deductions.

Many changes in ITR forms this year

This year some changes have been made in the Income Tax Return forms. In the Union Budget presented in July last year, the government changed the rules of capital gains tax. Then in the budget presented in February this year, the government changed the tax slabs in the new regime of income tax. Therefore, it became necessary to change the income tax forms. For example, till last year, ordinarily resident Indian taxpayers could use ITR-1 (Sahaj) if their sources of income were only salary/pension, one house property, interest from savings/fixed deposits, dividends and agricultural income less than Rs 5,000.

Now you can use ITR-1 on LTCG as well

This year, if a taxpayer makes long term capital gains on selling listed shares or units of equity scheme of a mutual fund, then he can still use ITR-1 form. The only condition is that the capital gains should not exceed Rs 1.25 lakh in FY25. In this way, the government has increased the scope of use of ITR-1 i.e. Sahaj form. This is good news for taxpayers, especially salaried taxpayers.

ITR-1 is the easiest to use

ITR-1 form is the easiest form. It is for such salaried or pension receiving taxpayers who do not have many sources of income. Many information is already filled in this form. For example, filing returns becomes very easy due to pre-filling of income details and financial transaction information. Taxpayers can check the data of ITR-1 form with the data of Form 16, AIS and Form 26AS.

Terms of use of ITR-1

Sahaja i.e. ITR-1 form can be used only by such individual taxpayers whose annual income is not more than Rs 50 lakh. Their sources of income should be only salary/pension, one house property, interest from savings/fixed deposit, dividend and agricultural income less than Rs 5,000. From this year, such taxpayers can also use this form, who have made long term capital gains of less than Rs 1.25 lakh on selling shares or units of equity mutual funds.

Use of ITR-2 in these situations

If the annual income of a taxpayer is more than Rs 50 lakh, then he cannot use ITR-1. If the long term capital gains of a taxpayer are more than Rs 1.25 lakh in a financial year, then he cannot use ITR-1. If a taxpayer is a director in a company, then he cannot use ITR-1. If a taxpayer has shares of a non-listed company, then he cannot use ITR-1. If there is income from abroad, then also ITR-1 cannot be used. In such situations, taxpayers will have to use ITR-2 form.

The post ITR Filing 2025: Salaried taxpayers can choose either ITR-1 or ITR-2, know the difference between the two first appeared on informalnewz.

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