New Income Tax Return Forms

Starting this Assessment Year (AY 2025-26), salaried individuals can now file their Income Tax Return using ITR-1 (Sahaj) even if they have Long-Term Capital Gains (LTCG) up to ₹1.25 lakh from the sale of listed equity shares and equity-oriented mutual funds. 

Previously, any capital gains required filing ITR-2, but this update simplifies the process for many taxpayers. 

Eligibility for ITR-1:

• Resident individuals (other than not ordinarily resident) with total income up to ₹50 lakh.

• Income sources: Salaries, one house property, other sources (like interest), and LTCG under Section 112A up to ₹1.25 lakh.

• Agricultural income up to ₹5,000.

• No carried forward losses under the capital gains head.  

Note: If you have capital gains from selling house property or short-term capital gains from listed equity and equity mutual funds, ITR-1 cannot be used. 

This change aims to make tax filing more straightforward for individuals with modest capital gains.