The Income Tax Department has started the process of filing income tax returns (ITRs) for the financial year 2024–25 (assessment year 2025–26). For this year, all seven ITR forms have been notified. These forms are meant for different categories of taxpayers, depending on the source and nature of their income.
A key change this year has been introduced in ITR-1 and ITR-4, as notified on April 29. Salaried individuals and those under the presumptive taxation scheme with long-term capital gains (LTCG) of up to ₹1.25 lakh in a financial year will now be allowed to file ITR-1 or ITR-4. Earlier, such taxpayers had to file ITR-2, which is slightly more complex.
This change will make it easier for lakhs of small taxpayers who earn modest capital gains along with their regular income.
The seven forms notified by the Income Tax Department serve different purposes. Understanding which form to use is very important, as filing the wrong form can lead to rejection or even penalties. Here’s a simple breakdown of each form:
ITR-1 (Sahaj): This is a simplified return form. It is meant for salaried individuals and pensioners whose annual income is up to ₹50 lakh. It also applies to those earning income from one house property or interest. From this year, it can also be used if they have LTCG up to ₹1.25 lakh.
ITR-2: This form is for individuals and Hindu Undivided Families (HUFs) who do not have income from business or profession. It is commonly used by people earning from salary, pension, multiple house properties, capital gains, or other sources like dividends.
ITR-3: This form is for individuals and HUFs who have income from business or profession. For example, self-employed professionals, traders, or business owners with profits need to file ITR-3.
ITR-4 (Sugam): This form is for resident individuals, HUFs, and partnership firms (other than LLPs) with business or professional income under presumptive taxation (Sections 44AD, 44ADA, 44AE). From this year, it can also be used by taxpayers with LTCG up to ₹1.25 lakh, as long as they don’t own more than one house.
ITR-5: This form is for firms, LLPs (Limited Liability Partnerships), cooperative societies, and similar entities.
ITR-6: This form is for companies registered under the Companies Act. It applies to all companies except those claiming exemption under Section 11 (for charitable or religious purposes).
ITR-7: This form is for trusts, charitable institutions, political parties, and similar entities that claim exemption under the Income Tax Act.
By categorising taxpayers into these forms, the Income Tax Department ensures that the reporting requirements are clear and suitable for the type of income earned.
The Income Tax Department has extended the last date for filing ITRs for the financial year 2024–25 to September 15, 2025. This extension gives taxpayers some additional time to gather documents, check their income details, and file their returns accurately.
Filing income tax returns is not only a legal requirement but also beneficial in many ways. It helps individuals claim refunds in case of excess tax deductions, ensures transparency in income reporting, and serves as proof of income for various purposes like applying for loans or visas.
Tax experts advise that taxpayers should carefully check which ITR form applies to them before filing. Choosing the correct form ensures smooth processing and prevents unnecessary delays. For salaried individuals with small capital gains, the recent relaxation in ITR-1 and ITR-4 will save time and effort.
At the same time, those with more complex income patterns — such as business profits, multiple properties, or higher capital gains — must use the right forms like ITR-2 or ITR-3. Using simpler forms when not eligible could result in rejection of the return or penalties later.
The introduction of the new rule for ITR-1 and ITR-4 is seen as a step towards simplification of the tax filing system. Many salaried individuals invest in shares or mutual funds, which often results in small long-term capital gains. Earlier, they had to file ITR-2 just because of this, even if their main income was from salary. Allowing them to use ITR-1 or ITR-4 makes the system easier and less time-consuming.
The overall process of e-filing has also become faster and more user-friendly in recent years. Online portals, pre-filled forms, and improved tracking features help taxpayers file returns without needing professional help in many cases. However, those with complex finances may still benefit from consulting chartered accountants or tax consultants.
As the deadline approaches, taxpayers are advised not to delay filing. Early filing not only avoids last-minute rush but also reduces the chances of errors. In addition, those who are eligible for refunds get their money back faster if they file well before the deadline.
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The ITR filing season for 2025 has brought with it a small but significant relief for many taxpayers through changes in ITR-1 and ITR-4. With all seven forms now notified, individuals, firms, companies, and trusts must carefully select the correct one based on their income sources.
The extension of the deadline to September 15 offers extra time to comply, but taxpayers should not wait until the last day. Filing on time, using the right form, and providing accurate details will ensure smooth processing, avoid penalties, and keep financial records in order.
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