The Excel Utility for ITR-1 and ITR-4 AY 2025-26 has been officially released by the Income Tax Department, incorporating all recent amendments introduced under the Finance Act, 2024. This updated utility is designed to make income tax return filing easier and more accurate for salaried individuals, freelancers, and small business owners who use presumptive taxation.
Who Should Use the Excel Utility for ITR-1 and ITR-4 AY 2025-26?
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ITR-1 (Sahaj) is for resident individuals with total income up to ₹50 lakh from sources like salary or pension, one house property, and other income such as interest.
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ITR-4 (Sugam) applies to resident individuals, HUFs, and firms (excluding LLPs) opting for presumptive taxation under Sections 44AD, 44ADA, or 44AE.
Key Features of the Excel Utility for ITR-1 and ITR-4 AY 2025-26
1. Exempt LTCG Reporting Under Section 112A
One of the significant updates in the Excel Utility for ITR-1 and ITR-4 AY 2025-26 is the inclusion of dedicated fields to report exempt Long-Term Capital Gains (LTCG) under Section 112A. Taxpayers can now report exempt LTCG up to ₹1.25 lakh from sales of listed equity shares or mutual funds within these simpler forms, avoiding the need to file complex forms like ITR-2 or ITR-3.
Note: Capital losses cannot be carried forward in ITR-1 or ITR-4.
2. Mandatory Form 10BA for Section 80GG
From AY 2025-26 onwards, taxpayers claiming rent deduction under Section 80GG (for those not receiving HRA) must file Form 10BA along with their income tax return. This change enforces stricter compliance for both salaried and self-employed individuals.
3. Tax Regime Continuity in ITR-4
The Excel utility for ITR-4 now contains a new field asking if the taxpayer filed Form 10-IEA last year and whether they intend to continue with or opt out of the new tax regime. This helps maintain consistency in tax regime selection and reduces filing errors.
Why Using the Excel Utility for ITR-1 and ITR-4 AY 2025-26 Matters
These updates streamline the filing process, increase reporting accuracy, and help taxpayers stay compliant with the latest tax laws. Understanding these changes is crucial to avoid return rejections, processing delays, or notices from the Income Tax Department.
