Finance

New ITR-1 & ITR-4 Forms Out: What Every Taxpayer Must Know for Income tax return 2024-25

The wait is over for income taxpayers! The Income Tax Department has officially released ITR-1 (SAHAJ) and ITR-4 (SUGAM) forms for Assessment Year 2025-26, covering financial year Income tax return 2024-25.

These forms bring much-needed clarity — and for many, a touch of relief — especially those dealing with capital gains under Section 112A.

Let’s break down what’s new, who should file what, and how these updates affect you.

🗓️ What’s the Deadline?

The due date for filing ITR for individuals and businesses not subject to audit is July 31, 2025. So mark your calendars — it’s best not to wait till the last minute to file the Income tax return 2024-25.

What’s New in ITR-1 & ITR-4 for Income tax return 2024-25?

Capital Gains Reporting Simplified

One of the biggest updates is the addition of a dedicated section for capital gains under Section 112A — up to ₹1.25 lakh — in both ITR-1 and ITR-4. This means:

If you earned long-term capital gains (LTCG) on equity shares or mutual funds within ₹1.25 lakh and have no carried-forward losses, you can now report this within ITR-1 or ITR-4 itself.
Previously, even small LTCG income meant filing ITR-2, which involved unnecessary complexity.

🧾 Who Should File ITR-1 (SAHAJ)?

ITR-1 is for resident individuals with:

Total income up to ₹50 lakh
Income sources:
- Salary or pension
- One house property (no losses carried forward)
- Income from other sources (excluding winnings, racehorses)
Long-term capital gains under Section 112A up to ₹1.25 lakh (no carry-forward or brought-forward capital losses)

Who should NOT file ITR-1:
Anyone with business income, more than one house property, or LTCG above ₹1.25 lakh must use a different form, likely ITR-2.

👨‍💼 Who Should File ITR-4 (SUGAM)?

ITR-4 is meant for:

Resident Individuals, HUFs, or partnership firms (except LLPs)
Total income up to ₹50 lakh
Sources of income:
- Business or professional income under presumptive taxation
- Salary, pension, and one house property
- LTCG under Section 112A up to ₹1.25 lakh (again, no carry-forward losses)

This is ideal for freelancers, shop owners, and small businesses opting for the presumptive taxation scheme.

📘 A Quick Note on Section 112A

Section 112A deals with long-term capital gains on:

Equity shares
Equity-oriented mutual fund units
Business trusts

These are taxed only if the gain exceeds ₹1 lakh, and only when STT (Securities Transaction Tax) has been paid. With this update, taxpayers don’t need to upgrade to more complex ITR forms unless their capital gains exceed limits or involve special cases.

⚠️ When You Still Need ITR-2 or Others

If you have:

Capital gains above ₹1.25 lakh
Brought forward or carry-forward capital losses
Short-term capital gains
Income from multiple sources or foreign income

…then you’ll still need to file ITR-2 or higher.

📊 Final Thoughts: Simplified, But Stay Alert for Income tax return 2024-25

This change is a welcome simplification for lakhs of taxpayers who deal with modest capital gains. Filing your ITR just got easier if your income is straightforward — but always double-check based on your income heads.

Early planning and understanding the right form will save you time and stress down the line.

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