Income Tax Department Notifies ITR-1 and ITR-4 Forms for AY 2025-26

New Delhi, April 30 — The Income Tax Department has notified ITR-1 (Sahaj) and ITR-4 (Sugam) forms for the Assessment Year 2025-26. These simplified forms cater to individual taxpayers and Hindu Undivided Families (HUFs) with total income up to Rs 50 lakh.

As per agency report, a significant update in this year’s filing process is that individuals earning up to Rs 1.25 lakh in long-term capital gains (LTCG) in a financial year can now file their returns using ITR-1. Previously, such taxpayers were required to file ITR-2. This change especially benefits salaried individuals earning small amounts of LTCG from shares or mutual funds.

The ITR-1 form can be filed by resident individuals with income up to Rs 50 lakh, derived from salary, one house property, other sources such as interest, and agricultural income up to Rs 5,000. Meanwhile, ITR-4 is meant for individuals, HUFs, and firms (excluding LLPs) whose income includes business or professional earnings under the presumptive income scheme.

Individuals and entities eligible under these conditions can now begin filing their income tax returns for the financial year 2024–25 (April–March cycle).

Tax advisory firm AKM Global's Partner (Tax) Sandeep Sehgal stated that the Central Board of Direct Taxes (CBDT) has introduced changes aimed at streamlining compliance for small investors and salaried taxpayers. Under the new provision, individuals with LTCG not exceeding Rs 1.25 lakh under Section 112A, and who have no capital losses to carry forward or set off, can now file their returns using the simpler ITR-1 or ITR-4 forms.

Sehgal added that this revision simplifies the tax filing process, making it more accessible and less cumbersome for a broader group of taxpayers. The goal is to promote timely and accurate tax compliance through user-friendly return mechanisms.