BIG Relief For Taxpayers! File ITR-1, ITR-4 Even With LTCG As CBDT Eases Rules; Here's How

In a major relief for taxpayers who are liable to pay long-term capital gains tax (upto Rs 1.25 lakh), the Central Board of Direct Taxes has eased the norms for income tax return (ITR) filing and introduced simplified ITR forms for taxpayers for the assessment year 2024-25.

The changes made in ITR filing are likely to benefit the taxpayers who have paid long term capital gains tax (LTCG) due to investment in different instruments like equity shares, equity mutual funds, business trusts, etc. As per the latest CBDT notification they can file their returns using ITR-1 (Sahaj) or ITR-4 (Sugam).

Despite the changes made in ITR filing for taxpayers with LTCG, there are still limitations for some taxpayers for using ITR-1 Sahaj and ITR-4 Sugam. Here are all the details you need to know about ITR filing for LTCG with Sahaj and Sugam forms.

What is ITR-1?

ITR-1, which is also known as SAHAJ, is one of the categories of ITR filing forms that individuals with an income below Rs 50 lakh per year can use. The ITR filing form is suitable for individuals with an income from pension or salaries, single house property or other sources. Income from betting, gambling and lotteries is not included. Residential individuals who have an agricultural income of up to Rs 5,000 can also apply for the income tax return using SAHAJ form.

ITR-1: What Is Excluded From ITR-1, ie SAHAJ?

Income earned from business or other ventures is excluded from the ITR-1 form. Additionally, LTCG above Rs 1.25 lakh, income generated from more than two houses and properties, is also excluded from SAHAJ form.

Filing ITR-1 requires additional documents like Form 16, investment payment receipts, house rent receipts, etc.

What is ITR-4?

ITR 4 form is also known as Sugam. Individuals, and Hindu Undivided Families (HUF), and partnership firms earning from their business or profession can file ITR using this form. For filing ITR-4, taxpayers are required to provide additional documents like rental agreement, form 16, form 16A, Form 26As, housing loan interest certificate, bank statements, etc.

Under the revised norms of CBDT for ITR filing, eligible taxpayers with a capital gains tax of upto Rs 1.25 lakh (with no brought forward or carry forward loss) can also use ITR-4.

What Are The New Updates By CBDT For ITR Filing?

-As per CBDT ITR filing form, people can file ITR-1 and ITR-4 even with long-term capital gains tax under section 112A. However, the LTCG limit is up to Rs 1.25 lakh with no brought forward or carry forward loss.

-CBDT has also made changes to capture details of deductions claimed under various sections of the ITR forms.

-The revised ITR-1 form includes a new section: "Income on which no tax is payable: Long Term capital gains u/s 112A not chargeable to Income-tax."

Taxpayers can download and submit their income tax return forms both online and offline. It is important to choose the correct ITR form based on your income type and financial profile. The income tax department has issued different forms to avoid complexities of taxpayers' incomes. Hence, people must check their eligibility first for using ITR-1 and ITR-4.