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Let’s be honest: income tax forms rarely make headlines. But every so often, the devil hides in the dropdowns.
The CBDT has quietly released the updated ITR-1 (Sahaj) and ITR-4 (Sugam) forms for the upcoming tax season; they may look familiar, but they’ve got a few tricky questions.
Want to stay on the simple forms even if you’ve made some capital gains?
Unsure whether the new tax regime switch will haunt you later?
Still using your Aadhaar enrolment ID instead of the real thing?
It’s all here — in the fine print. But don’t worry, we’ve translated that fine print into a simple script..
Let’s decode everything that’s changed, what it signals for individual taxpayers and consultants, and why this year’s ITR forms are less about data entry — and more about choices.
Consider ITR-1 as the form for “salary + savings interest + one house”. If you’re a salaried employee with total income under ₹50L and no messy foreign income, capital gains, or business revenue, you’ve likely filed ITR-1 before.
ITR-4, on the other hand, is the freelancer/consultant/side-hustler’s go-to. It’s built for those opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE. No books of accounts, no long-winded ledgers — just declare a fixed % of income as profit and move on.
This year, both forms got some well-meaning upgrades. But while they promise simplicity, they also ask more from you — especially if you’re toggling regimes, earning capital gains, or managing multiple bank accounts. Let’s dive in.
Here’s the big one: If your LTCG from listed shares or mutual funds is under ₹1.25 lakh, you don’t need to switch to ITR-2 anymore. Previously, any capital gains meant a forced form upgrade — even if it was just ₹10K from an index fund. That’s now fixed.
This aligns with Budget 2024’s move to raise the LTCG exemption limit to ₹1.25L under Section 112A. So if you’ve sold a few stocks, booked a tidy gain, and don’t have any capital losses to carry forward — breathe easy.
You can now stay on Sahaj or Sugam, and avoid the rabbit hole that is ITR-2.
What this signals:
The government’s nudging more people into simplified compliance, especially those with basic investing activity. It’s a quiet win for salaried employees and consultants who also dabble in equities.
This one’s subtle, but important.
The updated forms have completely removed the Aadhaar Enrolment ID field. You now must provide your actual 12-digit Aadhaar number — nothing else will do.
Still waiting on your Aadhaar card? That enrolment slip won’t get you past the filing gate.
What this signals:
The Aadhaar-PAN linkage drive is entering its final lap. From now on, only a full-fledged Aadhaar counts — and yes, it must be properly linked to your PAN before you even open the ITR utility.
This one’s big if you’re switching tax regimes. You now need to clearly state your choice between the old and new tax regimes right in the ITR. And if you're a business owner or professional opting out of the default new regime for the first time, you’ll need to:
Already opted out last year? The ITR-4 form will still ask you to confirm whether you want to continue with that decision.
What this signals:
This is about locking in your choice. You can’t switch regimes every year like changing mutual funds. The form is now your digital handshake with the tax department, and it wants receipts — in the form of 10-IEA.
No more vague “80C - ₹1,50,000” entries. The updated forms now give you dropdown menus to select the specific clause under each deduction section.
So under section 80C, you pick whether it’s LIC premium, PPF, ELSS, or tuition fees. Same goes for 80D, 80E, etc.
This is good and bad:
What this signals:
More structured data = cleaner processing = faster refunds. But you’ll need to be more organised this time.
This year, you're expected to report every bank account you actively used during FY 2024–25. "Active" means any account with any transaction — salary credits, ATM withdrawals, UPI spends, interest deposits, anything.
The good news: dormant accounts (inactive for 2+ years) are exempt.
The catch: joint accounts and secondary savings accounts count as active too.
You’ll need to:
What this signals:
Stronger reconciliation, tighter compliance, better audit trails. For taxpayers, it’s a nudge toward financial hygiene. For CAs, it’s a logistical upgrade (read: spreadsheet time).
The new ITR-1 and ITR-4 forms are more than just cosmetic updates. They reflect the Income Tax Department’s shift toward more structure, more clarity, and more accountability — from your side.
Yes, they make life easier in some ways:
You don’t need to jump to ITR-2 just because you sold a few mutual fund units.
You don’t need to type deduction codes like it’s 2005.
But they also ask more from you — disclosure, diligence, documentation.
If you’re organised, the forms will feel like a gentle nudge.
If not, April might sting a bit.
Either way, now’s the time to prep:
| Change | What it means for taxpayers |
|---|---|
| LTCG under ₹1.25L allowed in ITR-1/4 | More people stay on simple forms |
| Aadhaar enrolment ID removed | Only full Aadhaar is accepted |
| Tax regime must be declared | Form 10-IEA required for business opt-outs |
| Deduction sections now have dropdowns | Specificity required (no freeform entries) |
| Must report all active bank accounts | Dormants exempt, refunds linked to one |
Yeah! You can continue using ITR-1 or ITR-4 if your equity LTCG is under ₹1.25 lakh. No need to switch to ITR-2.
No. The new forms mandate your full 12-digit Aadhaar number. The Aadhaar enrolment ID option has been removed entirely.
Form 10-IEA is used to opt out of the default new tax regime. It’s mandatory for business/professional taxpayers doing this for the first time in AY 2025–26.
Only active bank accounts used during the year must be reported — dormant accounts (inactive for 2+ years) can be skipped.
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