I-T Dept notifies ITR-1, ITR-4 forms

After a delay of almost one month, the Income Tax Department on Wednesday notified return forms — ITR-1 (SAHAJ) and ITR-4 (SUGAM) — for the assessment year 2025-26 (financial year 2024-25).

The due date for filing returns by individuals and entities whose accounts are not subject to audit is July 31, 2025.

Incomes earned between April 1, 2024, and March 31, 2025, will be reported using these forms.

The latest ITR-1 and ITR-4 forms include sections for taxpayers to disclose capital gains income under Section 112A of up to ₹1.25 lakh, provided there are no brought-forward or carry-forward losses under the capital gains head.

ITR-1 needs to be filed by individuals with total income of up to ₹50 lakh. The income should include salary/pension, income from one house property (excluding cases where a loss is brought forward from previous years), or income from other sources (excluding winnings from lottery and income from racehorses).

Individuals filing this form should have long-term capital gains income of up to ₹1.25 lakh (with no brought-forward or carry-forward capital losses).

ITR-4 applies to individuals, Hindu Undivided Families (HUFs), and partnership firms (other than LLPs) who are residents and whose total income includes: total income of up to ₹50 lakh, business income under presumptive taxation, professional income under presumptive taxation, and income from salary or pension

According to Sandeep Jhunjhunwala, Tax Partner at Nangia Andersen LLP, Section 112A of the IT Act provides for the taxation of long-term capital gains arising from the transfer of equity shares in a company, units of an equity-oriented fund, or units of a business trust, where securities transaction tax has been paid on the acquisition, transfer, or both, as provided in the section. Hitherto, salaried individuals having income under the head “Capital Gains” were required to file Form ITR-2 even when the capital gains were exempt by virtue of the threshold limit prescribed under Section 112A, resulting in elaborate disclosure requirements, including information about the accrual or receipt of capital gains, details of securities, etc.

“This inconvenience is reduced with the new Form ITR-1 for AY 2025-26, which incorporates a small section for reporting long-term capital gains income on which tax is not payable by virtue of the exemption limit provided in Section 112A. However, in cases where the taxpayer earns long-term capital gains under Section 112A in excess of ₹1,25,000, or where the taxpayer earns any other long-term capital gains other than those taxable under Section 112A, or earns short-term capital gains, or has carried forward or brought forward capital losses, or derives income from any combination of the above, the salaried individual would have to resort to Form ITR-2 for filing the return of income,” he said.

A similar change has been made to Form ITR-4, which applies to taxpayers opting for presumptive taxation for their business income. The new ITR-4 Form for AY 2025-26 subsumes the reporting of long-term capital gains subject to tax under Section 112A of the IT Act, within the limit of ₹1.25 lakh.

Published on April 30, 2025