Income Tax Return Filing 2025: What Taxpayers Need To Know About Key Changes And Deadlines

The Income Tax Department has announced the ITR-1 and ITR-4 forms for the assessment year (AY) 2025-26, which corresponds to the financial year 2024-25. According to experts, income tax return (ITR) filing is expected to begin next week, with the last date for filing without an audit being July 31.

Typically, ITR filing starts in April, with forms being notified in the February-March period before the assessment year begins. However, this year the process has been delayed due to changes made by the government, causing the forms to be notified later than usual. Income tax practitioners suggest that filing should begin soon to avoid an extension of the July 31 deadline.

Changes To ITR Forms

As per Network 18 report, on April 29, the Income Tax Department notified ITR-1 and ITR-4 forms, bringing some changes to make it easier for certain taxpayers, especially those with long-term capital gains (LTCG) from listed equities. The ITR-1 form can now be used by individuals with LTCG up to Rs 1.25 lakh from listed securities. However, this exemption does not apply to short-term capital gains or LTCG beyond the Rs 1.25 lakh limit, or on immovable properties.

Key Eligibility Criteria

ITR-1: This form can be filed by resident individuals whose total income does not exceed Rs 50 lakh during the financial year. It covers income from salary, one house property, family pension, agricultural income (up to Rs 5,000), long-term capital gains under Section 112A (up to Rs 1.25 lakh), and other sources like interest income.

ITR-4: This form is meant for resident individuals, Hindu Undivided Families (HUFs), or firms (excluding LLPs) with income up to Rs 50 lakh. It applies to individuals who have business income reported on a presumptive basis under sections 44AD, 44ADA, or 44AE, as well as those with income from salary, pension, one house property, agricultural income (up to Rs 5,000), and long-term capital gains from listed securities.

Important Taxpayer Documents

While ITR filing is expected to begin next week, salaried individuals may start filing a little later, usually after they receive Form 16. This document, issued by employers, summarises the salary paid and tax deducted at source (TDS) during the financial year. As per tax rules, employers must issue Form 16 by June 15.

Changes To Form ITR-4

The newly notified ITR-4 form now includes the reporting of long-term capital gains under Section 112A, similar to the changes made in the ITR-1 form. This is a significant step in simplifying the filing process for individuals with business income and long-term capital gains, especially those falling within the exemption limit of Rs 1.25 lakh.

Long-Term Capital Gains Tax Under Section 112A

The government has continued the provision of exempting LTCG of up to Rs 1.25 lakh from the sale of listed equity shares, equity-oriented mutual funds, and business trusts. Any LTCG beyond this limit will be taxed at a rate of 12.5 per cent.

With ITR filing expected to begin soon, taxpayers, especially those with long-term capital gains, are advised to prepare early. By understanding the key forms and eligibility criteria, individuals can ensure that they meet the July 31 deadline for filing their returns.