Simplified Tax Filing: New ITR Forms Benefit Small Taxpayers

The income tax department has introduced ITR forms 1 and 4 for the 2025-26 assessment year, benefiting taxpayers earning up to Rs 50 lakh. These simplified forms, Sahaj and Sugam, are designed for small and medium taxpayers, including those with long-term capital gains of up to Rs 1.25 lakh.

In a noteworthy development, the income tax department has unveiled simplified ITR forms, particularly ITR-1 (Sahaj) and ITR-4 (Sugam), aimed at taxpayers with total income of up to Rs 50 lakh for the assessment year 2025-26. Individuals and entities can now file these forms if they have long-term capital gains not exceeding Rs 1.25 lakh.

Experts have hailed these changes as a significant win for small and medium taxpayers. Sandeep Sehgal, a partner at AKM Global, emphasized that the new forms streamline tax filing, making it less cumbersome for salaried individuals and small investors. The change is expected to promote greater compliance.

The Central Board of Direct Taxes (CBDT) has made filing more accessible for taxpayers by focusing on simplification. The decision to allow individuals with specific long-term capital gains to file under Sahaj or Sugam forms demonstrates the government's commitment to reducing administrative burdens on taxpayers.

(With inputs from agencies.)