The Central Board of Direct Taxes (CBDT) has released Income Tax Return Forms (ITR Forms) for the Financial Year 2024-25 (Assessment Year 2025-26).

ITR-1 (SAHAJ): This form can be filed by individuals being a resident (other than not ordinarily resident) having total income upto Rs. 50 lakh and having Income from Salaries, one house property, other sources (Interest etc.), long-term capital gains under section 112A up to Rs. 1.25 lakh, and agricultural income up to Rs. 5 thousand.

ITR-4 (SUGAM): This form can be filed by Individuals, HUFs and Firms (other than LLP) being a resident having total income upto Rs.50 lakh and having income from business and profession which is computed under sections 44AD, 44ADA or 44AE, and having long-term capital gains under section 112A upto Rs. 1.25 lakh.

Changes Introduced:

ITR-1 and ITR-4 can now be used even if there is long-term capital gain (LTCG) under section 112A, provided:

• The LTCG does not exceed Rs. 1.25 lakh, and
• There is no loss to be carried forward or set off under the capital gains head.

Until AY 2024-25, ITR-1 or ITR-4 couldn’t be used at all if any capital gains existed. 

ITR-4 Form has expanded disclosure on opting out of new tax regime using Form 10-IEA under section 115BAC(6):

• If opting out in AY 2024–25, the user must declare and optionally continue or reverse that decision.
• If opting out for the first time in AY 2025–26, they must provide Form 10-IEA acknowledgment details.
• Now, there is an option for additional clarification regarding the late filing of Form 10-IEA.

In both ITR-1 and ITR-4 Forms

• All deductions (e.g., 80C to 80U) must now be selected from a drop-down in the e-filing utility. Specific clauses and subsections must be disclosed.
• Income under section 89A (retirement accounts maintained abroad) has enhanced fields and relief tracking
• All bank accounts held in India during the previous year must be reported (excluding dormant accounts).
• At least one account must be selected for refund credit.

In Form ITR-4 Section 44AD (business), the turnover threshold is now Rs. 3 crore if digital transactions make up up to 95%. Section 44ADA (professionals) limit enhanced to Rs. 75 lakh under the same digital receipts condition.