Synopsis
The CBDT has released new ITR-1 and ITR-4 forms for AY 2025-26, introducing key changes including capital gains reporting and new thresholds for digital transactions. Stay updated and compliant with the latest tax regulations.Key Takeaways
- ITR-1 and ITR-4 forms are now available for AY 2025-26.
- LTCG reporting is now included in ITR-1.
- Turnover threshold for digital transactions in ITR-4 is Rs 3 crore.
- All bank accounts except dormant ones must be reported.
- Changes to deductions in e-filing will help streamline the process.
New Delhi, April 30 (NationPress) The Central Board of Direct Taxes (CBDT) has officially announced the income tax return forms ITR-1 and ITR-4 for the financial year 2024-25 and the assessment year 2025-26.
Taxpayers must utilize these new forms to file their returns for earnings accrued from April 1, 2024, to March 31, 2025.
A significant update this year is that ITR-1 (SAHAJ) can now be used to report long-term capital gains (LTCG) under section 112A, provided that the LTCG does not exceed Rs 1.25 lakh, and the taxpayer has no capital loss to carry forward or offset.
Previously, ITR-1 lacked a facility for declaring capital gains tax. This year, individuals with long-term capital gains from the sale of listed equity shares and equity-oriented mutual funds can file their returns using ITR-1.
However, it’s important to note that ITR-1 cannot be used by taxpayers with capital gains from the sale of property or short-term capital gains from listed equities and mutual funds.
The notification specifies that taxpayers who have elected to opt out of the new tax regime in AY 2024-25 must declare their choice to either continue or revert.
First-time opt-outs for AY 2025-26 should provide details from Form 10-IEA acknowledgement.
Additionally, a clarification is needed regarding the late submission of Form 10-IEA.
Both ITR-1 and ITR-4 forms will require taxpayers to select all deductions from section 80C to 80U from a drop-down menu in the e-filing platform, ensuring that the precise clauses and sub-sections are disclosed.
Income sourced from retirement accounts held abroad, as per section 89A, will now feature enhanced fields and a relief tracking mechanism.
In ITR-4, under section 44AD (business), if digital transactions constitute 95 percent of business operations, the turnover threshold has been revised to Rs 3 crore. For Section 44ADA (professionals), this limit has increased to Rs 75 lakh under similar digital transaction conditions.
All bank accounts maintained in India during the previous year, except for dormant accounts, must now be reported in both ITR-1 and ITR-4 forms.
