​The Central Board of Direct Taxes (CBDT) has officially notified the revised Income Tax Return (ITR) Forms 1 (Sahaj) and 4 (Sugam) for the Assessment Year (AY) 2025–26, covering income earned during the Financial Year (FY) 2024–25. These updates aim to simplify the tax filing process for small taxpayers, especially those with straightforward income profiles.

1. Inclusion of Long-Term Capital Gains (LTCG) up to ₹1.25 Lakh

Previously, any LTCG under Section 112A required filing ITR-2. Now, taxpayers with LTCG up to ₹1.25 lakh from listed equity shares and equity mutual funds can use the simpler ITR-1 or ITR-4 forms, provided there are no capital losses to carry forward or set off.

2. Enhanced Disclosure for Deductions

Taxpayers must now select deductions under Sections 80C to 80U from a dropdown menu in the e-filing utility, specifying relevant clauses and subsections.

3. Mandatory Reporting of Bank Accounts

All bank accounts held during the financial year, except dormant ones, must be reported. At least one account must be selected for refund credit.

4. Detailed TDS Information Required

Taxpayers are required to furnish section-wise details of Tax Deducted at Source (TDS) in the ITR forms.

ITR-1 (Sahaj)

• Resident individuals (excluding not ordinarily resident) with total income up to ₹50 lakh.
• Income sources: salary, one house property, other sources (e.g., interest), agricultural income up to ₹5,000, and LTCG under Section 112A up to ₹1.25 lakh.
• Not applicable for individuals who are directors in a company, have invested in unlisted equity shares, or have assets outside India.

ITR-4 (Sugam)

• Resident individuals, Hindu Undivided Families (HUFs), and firms (excluding LLPs) with total income up to ₹50 lakh.
• Income from business or profession computed under Sections 44AD, 44ADA, or 44AE.
• LTCG under Section 112A up to ₹1.25 lakh.
• Not applicable for individuals with agricultural income exceeding ₹5,000, directors in a company, or those with assets outside India.

Important Dates

• Filing Start Date: The e-filing utility for these forms will be operational soon.
• Due Date: July 31, 2025, for individuals not requiring audit.

Sources