ITR-1 & ITR-4 Online Filing Activated for AY 2025–26: Key Changes & Extended Deadline
Great news for taxpayers! The Income Tax Department has officially enabled online filing for ITR-1 (Sahaj) and ITR-4 (Sugam) for Assessment Year 2025–26 (Financial Year 2024–25). This means you can now file your income tax returns through the e-filing portal, which includes helpful pre-filled data to simplify the process.
To give you more time to adjust to the updated forms and portal enhancements, the deadline for filing ITR for AY 2025–26 has been extended from July 31st to September 15, 2025. This extension aims to ease the compliance burden during the peak filing season.
What’s New in ITR-1 (Sahaj)?
ITR-1 is the go-to form for resident individuals with a total annual income up to ₹50 lakh from straightforward sources like salary, one house property, and other income (excluding lottery winnings or horse racing).
Here are the key updates for AY 2025–26:
- LTCG Now Allowed: You can now report long-term capital gains (LTCG) up to ₹1.25 lakh from listed equities or equity mutual funds directly in ITR-1, as long as there are no capital losses to carry forward. This is a significant change, as previously such gains required filing ITR-2.
- Deductions via Drop-Down: When claiming deductions under Sections 80C to 80U, you’ll now select them from drop-down options on the e-filing portal, ensuring accuracy by specifying the correct clause or sub-section.
- Relief for Foreign Retirement Accounts: New fields have been added to assist taxpayers claiming relief under Section 89A for income from foreign retirement accounts.
- Aadhaar Only: The option to use your 28-digit Aadhaar Enrolment ID has been removed. Only your 12-digit Aadhaar number will be accepted.
- TDS Section Field: A new column in the TDS schedule allows you to specify the exact section under which tax was deducted at source.
- Detailed Old Regime Disclosures: If you opt for the old tax regime, expect more detailed fields for deductions like HRA, Section 80C, 80D, and loan-related interest, requiring information like policy numbers, lender details, and loan account numbers.
- Form 10BA for 80GG: If you’re claiming rent deduction under Section 80GG (for those not receiving HRA), you’ll now need to file Form 10BA along with your return.
What’s New in ITR-4 (Sugam)?
ITR-4 is designed for resident individuals, HUFs, and firms (excluding LLPs) who declare income under the presumptive taxation scheme (Sections 44AD, 44ADA, or 44AE) and whose total income does not exceed ₹50 lakh. This applies to many small business owners, freelancers, and professionals.
Here are the major changes for AY 2025–26:
- LTCG Declaration: Similar to ITR-1, you can now report capital gains from listed shares or equity mutual funds (up to ₹1.25 lakh and without losses) directly in ITR-4.
- New Tax Regime is Default: The new tax regime (Section 115BAC) is now the default. You’ll need to confirm or change your regime selection each year within the form. If you’re opting out for the first time this AY, you must provide Form 10-IEA acknowledgment details, which needs to be submitted before the return due date.
- Drop-Down Deductions Menu: Like ITR-1, deductions under Sections 80C to 80U must now be selected via drop-down menus, with accurate reference to the clause/sub-section.
- Relief for Foreign Retirement Accounts: New disclosure fields have been introduced for relief claims related to overseas retirement income under Section 89A.
- Aadhaar Only: The form now only accepts a valid 12-digit Aadhaar number. Enrolment IDs are no longer permitted.
- TDS Section Field: A dedicated field has been added under the TDS schedule to specify the relevant section for each tax deduction entry.
- Higher Presumptive Tax Limits: Good news for small businesses and professionals:
- The turnover limit for businesses under Section 44AD has increased to ₹3 crore (from ₹2 crore) if 95% of receipts are digital.
- For professionals under Section 44ADA, the limit has been raised to ₹75 lakh (from ₹50 lakh) if at least 95% of their income is digital.
Remember, it’s crucial to link your PAN with Aadhaar on the official Income Tax portal before filing returns to avoid penalties.
Ready to file your taxes? The pre-filled data and updated forms are designed to make your filing experience smoother this year.