After a long wait, the Central Board of Direct Taxes (CBDT) has released Form 1 and Form 4 of ITR for the income of the financial year 2025. It is expected that the rest of the forms will also be notified soon. However, the special thing in the forms that have been released is that some such changes have been made, that now the way has been opened for some taxpayers to file returns through ITR-1 form
After a long wait, the Central Board of Direct Taxes (CBDT) has finally released Form 1 and Form 4 of ITR. These notified ITRs are for the financial year 2024-25 i.e. assessment year 2025-26. After the notification of ITR-1 and ITR-4, it is now expected that the rest of the forms will also be notified soon. There have been major changes in the new ITR form. Earlier there was no provision to show capital gains tax in ITR-1. Now after the new changes, if there is long term capital gain from the sale of listed equity shares and equity mutual funds, then ITR-1 can be used to file tax returns. Earlier, in case of capital gain, taxpayers had to file ITR-2 form. Apart from the inclusion of long-term capital gains from equity in the ITR-1 form, there has been no significant change.
Who can use ITR-1 for FY25 (AY26)?
According to the notification, ITR-1 form can be used in these situations-
- Resident individuals with income up to Rs 50 lakh
- Income from other sources such as salary, one house property, interest
- Long term capital gains up to Rs 1.25 lakh from the sale of listed equity and mutual funds
- Agricultural income up to Rs 5 thousand
ITR-1 will not be able to be used in these situations
Despite the provision to show long term capital gains in case of short term capital gains from the sale of house property or listed equity and equity mutual funds, in some situations ITR-1 form will not be able to be used for returns. Apart from this, if you are a director in a company or have invested in equity shares of an unlisted company or TDS has been deducted under section 194N or tax on ESOP is deferred or there is any property outside the country, then ITR-1 form will not be able to be used.
Who can use ITR-4 for FY25 (AY26)?
ITR-4 can be used by people who have income from business and profession which is calculated under section 44AD, 44ADA or 44AE, resident individuals, HUFs and firms (except LLPs) with income up to Rs 50 lakh, long term capital gains up to Rs 1.25 lakh under section 112A.
Who cannot use ITR-4 form?
If you are a director in a company or have invested in equity shares of an unlisted company or have deferred tax on ESOP or have agricultural income of more than Rs 5,000 or have any property outside the country, then you will not be able to use ITR-4 form.
