Taxpayers note: Government releases updated ITR Forms 1 and 4 for AY 2025-26.

income tax return 2025

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?

income tax file1

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.

income tax return 2025

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.

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