The government has made filing income tax a bit easier for many people! They’ve released new versions of the income tax return 2025 forms called Form 1 and Form 4 for the tax year 2025-26. These new forms are simpler to fill out, especially for those who earn up to ₹50 lakh in a year. This change is meant to make the tax filing process less stressful for a large number of taxpayers.
Important updates for filing your Income Tax Return 2025
Great news for smaller investors! If you made a profit of up to ₹1.25 lakh from investments you held for a long time (like stocks or mutual funds) in a year, you can now use the really simple ITR-1 form (also called Sahaj) to file your taxes. Before, even with this smaller amount of profit, you had to use the more complicated ITR-2 form. This change makes things much easier!
So, now that these new rules are out, if you’re an individual, a Hindu Undivided Family (HUF), or a regular business (not a Limited Liability Partnership), and you earned up to ₹50 lakh between April 2024 and March 2025, you can now start filing your income tax returns for that money you made.
Basically, the ITR-1 (Sahaj) and ITR-4 (Sugam) forms are designed to be super simple. They’re made especially for most regular folks and smaller businesses to fill out easily.
Who qualifies for the simple ITR forms?
ITR Form 1 (Sahaj – the Easy One):
This form is for you if you’re an Indian resident who earns up to ₹50 lakh a year from things like:
- Your salary
- Owning just one house
- Other income like interest you earn
- A little bit of farming income (not more than ₹5,000 a year)
- And now, even if you made a profit of up to ₹1.25 lakh from long-term investments (like stocks) in a year, you can still use this simple form!
ITR Form 4 (Sugam – the Business-Friendly Easy One):
Individuals, Hindu Undivided Families (HUFs), and regular businesses (but not Limited Liability Partnerships) can use this if their total income is up to ₹50 lakh, and that income comes from running a business or a profession.
ITR-2 (The More Detailed One):
You’ll likely need to use this form if you’re an individual or a HUF and:
- You don’t have income from a business or profession.
- OR you made a profit of more than ₹1.25 lakh from long-term investments.
- OR you have investment losses that you need to carry forward to future tax years.
The people who know a lot about taxes think these new forms are a good thing. One of them, Sandeep Sehgal from AKM Global (which is a well-known tax advice company), said that the government has changed the income tax forms for the tax year 2025-26 in a way that will be especially helpful for people who earn a salary and also made money over time by selling stocks or mutual funds.
Sandeep Sehgal explained that because of these new changes, if you made a long-term profit of ₹1.25 lakh or less from things like stocks (and it falls under a specific tax rule called Section 112A), and you don’t have any investment losses to carry over to next year, you can now use the really simple ITR-1 (Sahaj) or ITR-4 (Sugam) forms.
He also pointed out that this makes filing taxes much easier and less of a headache for small investors and people with salaries. This will probably encourage more people to file their taxes correctly and on time.
This notification from the I-T department signals a clear move towards simplifying the tax filing process for a large segment of taxpayers, especially those with modest investment gains. The ability to use simpler forms will likely save time and reduce the complexity associated with tax compliance.