The Income Tax Department has officially released the Excel Utilities for filing Income Tax Returns (ITR) Forms 1 (Sahaj) and 4 (Sugam) for Assessment Year (AY) 2025-26, which pertains to income earned during the Financial Year (FY) 2024-25. This marks the beginning of the ITR filing season for many taxpayers. Crucially, the Central Board of Direct Taxes (CBDT) has also announced an extension to the filing deadline for non-audit cases, moving it from the usual July 31, 2025, to September 15, 2025. This extension comes in response to the delays in issuing the updated ITR forms and utilities, allowing taxpayers more time for compliance.
What are ITR-1 and ITR-4 Forms?
The Income Tax Department has a range of ITR forms, each designed for different categories of taxpayers based on their income sources and total income. ITR-1 and ITR-4 are two of the most commonly used forms, particularly for individual taxpayers and small businesses.
ITR-1 (Sahaj):
ITR-1, also known as ‘Sahaj’ (meaning easy), is the simplest of all ITR forms. It is designed for resident individuals with relatively straightforward income sources.
Who can file ITR-1?
- Resident Individuals: This form is specifically for individuals who are ‘ordinarily resident’ in India.
- Total Income up to ₹50 Lakh: The total income of the individual must not exceed ₹50 lakh during the financial year.
Income from Specific Sources: Income must be derived from:
Salary or Pension
- One House Property (excluding cases where loss from house property is carried forward)
- Other Sources (such as interest from savings accounts, fixed deposits, family pension, etc., excluding income from horse racing, gambling, lottery, etc.)
- Agricultural Income up to ₹5,000
- Long-Term Capital Gains (LTCG) under Section 112A up to ₹1.25 lakh from listed equity shares and mutual funds, provided there are no capital losses to carry forward or set off.
Who cannot file ITR-1?
- Individuals with total income exceeding ₹50 lakh.
- Individuals who are Directors in a company or have invested in unlisted equity shares.
- Individuals who are Resident Not Ordinarily Resident (RNOR) or Non-Resident.
- Individuals with income from more than one house property.
- Individuals with income from business or profession.
- Individuals with capital gains (other than LTCG under Section 112A up to ₹1.25 lakh, with no carry-forward/set-off losses).
- Individuals with agricultural income exceeding ₹5,000.
- Individuals with income from foreign sources or holding assets outside India.
ITR-4 (Sugam):
ITR-4, known as ‘Sugam’ (meaning easy), is designed for individuals, Hindu Undivided Families (HUFs), and Firms (other than Limited Liability Partnerships – LLPs) who opt for the presumptive taxation scheme under Sections 44AD, 44ADA, and 44AE of the Income Tax Act.
Who can file ITR-4?
- Resident Individuals, HUFs, and Firms (other than LLPs): This form is for these entities.
- Total Income up to ₹50 Lakh: The total income should not exceed ₹50 lakh.
- Income from Business/Profession under Presumptive Taxation:
- Section 44AD: For small businesses with turnover up to ₹2 crore (or ₹3 crore if 95% of receipts are digital). Income is presumed at 6% (for digital transactions) or 8% of the total turnover/gross receipts.
- Section 44ADA: For specified professionals (e.g., doctors, lawyers, architects, engineers, accountants, interior decorators, technical consultants) with gross receipts up to ₹50 lakh (or ₹75 lakh if 95% of receipts are digital). Income is presumed at 50% of the total gross receipts.
- Section 44AE: For businesses engaged in plying, hiring, or leasing goods carriages, and who own not more than 10 goods carriages. Income is presumed on a per-vehicle basis.
- Income from Other Sources: Can also include income from salary/pension, one house property, and other sources (like interest).
- Long-Term Capital Gains (LTCG) up to ₹1.25 lakh under Section 112A, provided no carry-forward/set-off losses.
Who cannot file ITR-4?
- Individuals whose total income exceeds ₹50 lakh.
- Individuals who are Directors in a company or have invested in unlisted equity shares.
- Individuals who are Resident Not Ordinarily Resident (RNOR) or Non-Resident.
- Individuals with income from more than one house property.
- Individuals having income from business or profession which is not computed under the presumptive taxation scheme.
- Individuals earning income in the form of commission or brokerage, or from an agency business.
- Individuals with capital gains (other than LTCG under Section 112A up to ₹1.25 lakh, with no carry-forward/set-off losses).
Why the Extension to September 15, 2025?
The CBDT extended the deadline from July 31, 2025, to September 15, 2025, for non-audit cases (which includes most individual taxpayers and small businesses filing ITR-1 and ITR-4). The primary reasons cited are:
- Extensive Changes in Notified ITRs: The ITR forms for AY 2025-26 have undergone structural and content revisions, incorporating amendments introduced by the Finance Act 2024. These changes aim to simplify compliance and enhance reporting accuracy.
- Time for System Readiness and Utility Rollout: The revisions necessitate additional time for the Income Tax Department’s e-filing system to be fully ready and for the corresponding utilities to be rolled out seamlessly.
- Reflection of TDS Certificates: Form 16 (TDS certificate from employers) is typically issued by June 15, 2025, and TDS statements are filed by May 31, 2025. The credits from these statements start reflecting in Form 26AS and Annual Information Statement (AIS) in early June. The extension ensures that taxpayers have ample time to verify their TDS details before filing.
Key Documents Required for Filing ITR-1 and ITR-4
While you don’t need to attach these documents when e-filing, it’s crucial to have them handy for accurate information entry and for future reference in case of any scrutiny by the Income Tax Department.
Common Documents for ITR-1 and ITR-4:
- PAN Card: Your Permanent Account Number is essential.
- Aadhaar Card: Linking PAN with Aadhaar is mandatory. You will need your Aadhaar number for filing.
- Bank Account Details: Savings account number, IFSC code, and account type for refund processing. Ensure your bank account is pre-validated on the e-filing portal.
- Form 16: Issued by your employer (if salaried), this document provides details of your salary and TDS deducted. It’s usually issued by June 15.
- Form 16A/16B/16C: TDS certificates for income other than salary (e.g., TDS on professional fees, interest, rent).
- Form 26AS: This Annual Consolidated Tax Statement provides a summary of all tax deducted at source (TDS), tax collected at source (TCS), advance tax paid, and self-assessment tax paid. It is crucial for verifying tax credits.
- Annual Information Statement (AIS) and Taxpayer Information Summary (TIS): These provide a comprehensive view of all financial transactions reported to the Income Tax Department, including interest, dividends, securities transactions, mutual fund transactions, foreign remittances, etc. Reviewing AIS/TIS is vital to ensure all income sources are captured.
- Bank Statements/Passbook: For interest income from savings accounts, fixed deposits, etc.
- Investment Proofs: For claiming deductions under Chapter VI-A (e.g., Section 80C, 80D, 80G, 80E). This includes:
- LIC premium payment receipts
- PPF contributions
- ELSS investments
- Home loan principal repayment certificate
- Tuition fee receipts for children
- Health insurance premium payment receipts
- Donation receipts
- Housing Loan Interest Certificate: From your bank/financial institution if you have a home loan, for claiming deduction under Section 24 for interest paid on borrowed capital for house property.
- Other Income Proofs: Any other income details not covered above, such as dividend income, rental income (if applicable for single house property in ITR-1/4), interest on tax refunds, etc.
Additional Documents for ITR-4 (Presumptive Income):
- Records of Turnover/Gross Receipts: For businesses and professionals opting for presumptive taxation, though detailed books of accounts are not mandatory, records of turnover/gross receipts should be maintained to declare income as per Section 44AD/44ADA/44AE.
- Bank statements reflecting business transactions: To verify turnover.
- Details of owned goods carriages: For taxpayers opting for Section 44AE.
New Changes in ITR Forms for AY 2025-26
While the ITR-1 and ITR-4 are generally simplified, some important changes have been introduced for AY 2025-26:
- Relaxed Eligibility for LTCG in ITR-1 & ITR-4: Taxpayers can now file ITR-1 or ITR-4 even if they have Long-Term Capital Gains (LTCG) from listed equity shares and mutual funds under Section 112A, provided the LTCG is up to ₹1.25 lakh, and they do not have any capital loss to carry forward or set off. This simplifies filing for small investors who previously had to use more complex forms.
- Aadhaar Enrolment ID No Longer Accepted: From AY 2025-26, PAN applications and ITR filings require the actual Aadhaar number. The field for Aadhaar Enrolment ID has been removed from all ITR forms.
- Detailed Disclosure for Opting Out of New Tax Regime (ITR-4): Business owners who switch from the new tax regime to the old tax regime (or vice-versa) now need to provide detailed disclosures, including past filings of Form 10-IEA and a confirmation of their choice to continue opting out or into the new regime.
- Mandatory Mention of TDS Section: If your income (other than salary) has Tax Deducted at Source (TDS), you are now required to mention the specific TDS section (e.g., 194J, 194C, 194I, etc.) in your ITR form to claim the tax credit. This enhances transparency and accuracy of TDS claims.
- Director/Unlisted Shares Restriction in ITR-1/4: The validation rules for ITR-1 and ITR-4 have been tightened. If certain TDS section codes (like 194B, 194BB, 194S, 194LA, 195, 196A, 194Q, or 194R) appear in your tax credit statement, the utility may disqualify the return from being filed under ITR-1/4. This is an indirect way of ensuring that taxpayers with complex income structures or specific types of capital gains are directed to more appropriate ITR forms (like ITR-2 or ITR-3).
Steps to File ITR-1 and ITR-4 Online (Using Excel Utility)
The Income Tax Department provides an Excel-based offline utility for ITR-1 and ITR-4, which allows taxpayers to fill the form offline and then upload the generated XML file to the e-filing portal. The direct online filing facility (without downloading utility) will also be available soon.
Steps to file using Excel Utility:
- Download the Utility: Visit the official income tax e-filing portal (www.incometax.gov.in). Go to ‘Downloads’ > ‘Offline Utilities’ and select the ‘ITR Utilities’ for AY 2025-26. Download the Excel utility for ITR-1 or ITR-4, as applicable.
- Extract and Open: Extract the downloaded ZIP file and open the Excel utility. Ensure macros are enabled in Excel.
- Enter Personal Information: Fill in your PAN, Aadhaar number, name, address, date of birth, and contact details. This information is often pre-filled based on your PAN. Verify all pre-filled data.
Income Details:
- Salary/Pension: Enter details from your Form 16.
- House Property: If applicable, enter income from one house property.
- Other Sources: Enter details of interest income (from savings, FDs), family pension, etc.
- Presumptive Income (for ITR-4): Declare your business or professional income under Sections 44AD, 44ADA, or 44AE as applicable.
Deductions (Chapter VI-A): Enter details of deductions you wish to claim under various sections like 80C, 80D, 80G, 80E, etc., based on your investment proofs.
Tax Details:
- TDS (Tax Deducted at Source): Verify and enter details from Form 16, Form 16A, Form 26AS, and AIS. Ensure the correct TDS sections are mentioned.
- Advance Tax/Self-Assessment Tax: Enter any advance tax or self-assessment tax paid.
- Tax Computation: The utility will automatically calculate your total income, deductions, total tax payable, and any refund due or tax demand.
- Validate: Use the ‘Validate’ button within the utility to check for errors. Rectify any errors identified.
- Generate XML: Once validated, click on the ‘Generate XML’ button. Save this XML file to your computer.
Upload XML: Go back to the Income Tax e-filing portal (www.incometax.gov.in). Log in to your account.
- Go to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’.
- Select Assessment Year as ‘2025-26’.
- Select ‘Online’ or ‘Offline’ mode (if using the utility, select ‘Offline’).
- Choose the relevant ITR Form (ITR-1 or ITR-4).
- Upload the generated XML file.
E-Verify: After successful upload, you must e-verify your return. This can be done through:
- Aadhaar OTP
- Net Banking
- Bank Account EVC (Electronic Verification Code)
- Demat Account EVC
- Sending a signed ITR-V (acknowledgment) printout to the CPC, Bengaluru (though e-verification is highly recommended for faster processing).
Important Considerations for Taxpayers
- Accuracy is Key: Always ensure that the information entered in your ITR matches your financial documents (Form 16, bank statements, AIS, etc.). Discrepancies can lead to notices from the Income Tax Department.
- Verify Form 26AS and AIS: Before filing, thoroughly check your Form 26AS and Annual Information Statement (AIS) for all income and TDS details. These are pre-filled in the online portal and are crucial for claiming correct tax credits.
- Choose the Correct ITR Form: Filing the wrong ITR form can lead to your return being treated as defective. If you are unsure which form applies to you, consider consulting a tax professional.
- Don’t Wait for the Last Date: While the deadline is extended to September 15, it’s always advisable to file your ITR well in advance to avoid last-minute rush, technical glitches, or missing out on any deadlines for revised returns.
- Keep Records: Maintain all your financial documents and proofs of investments/deductions for at least 7 years from the end of the relevant assessment year, as they may be required for future reference or scrutiny.
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