ITR Filing AY 2025–26: 7 Major Changes in ITR-1 and ITR-4 Excel Utilities  

The Income Tax Department has officially released the Excel utilities for ITR-1 and ITR-4 for Assessment Year (AY) 2025–26, covering income earned in Financial Year (FY) 2024–25. This year brings several critical changes aimed at increasing transparency, preventing errors, and enhancing taxpayer compliance, especially for salaried individuals and small business owners filing under the old tax regime.

With the filing deadline extended to September 15, 2025, from the usual July 31, taxpayers now have more time to adapt to the new validation rules and disclosures introduced in the ITR Excel utilities.

Quick Summary

• Who can use ITR-1 and ITR-4: Individuals and HUFs with income up to ₹50 lakh.
• New deadline: September 15, 2025, for FY 2024–25 income.
• Excel utilities launched: ITR-1 and ITR-4 are now available with enhanced validation and disclosure features.

ITR-1 and ITR-4 Excel Utilities Released  

The Income Tax Department released the Excel utilities for ITR-1 and ITR-4 on May 30, 2025, enabling taxpayers to file their returns for the Assessment Year 2025–26 (Financial Year 2024–25). This is significant because these are among the most commonly used forms by: 

• Salaried individuals (ITR-1)
• Professionals and small businesses under presumptive income schemes (ITR-4)

Who Can File ITR-1 and ITR-4 for AY 2025–26?

ITR-1 (Sahaj)

• Eligible for resident individuals (excluding “not ordinarily resident”) with:
• Total income up to ₹50 lakh
• Income from salary/pension 
• One house property
• Other sources (like interest)
• Long-term capital gains under Section 112A up to ₹1.25 lakh
• Agricultural income up to ₹5,000

Not eligible: Company directors, holders of unlisted equity shares, foreign asset holders, or those with TDS under Section 194N.

ITR-4 (Sugam)

• Applicable to Individuals, HUFs, and Firms (excluding LLPs) with:
• Income up to ₹50 lakh
• Presumptive income under Sections 44AD, 44ADA, 44AE
• LTCG under Section 112A (up to ₹1.25 lakh)

Link to download ITR-1 and ITR-4 excel based utility    

7 Key Changes in the ITR 1 & ITR 4  Excel Utility for AY 2025–26

The enhanced Excel utilities bring in multiple validation checks, compliance improvements, and user-friendly features to simplify return filing and prevent false claims. Here are the 7 most prominent changes that taxpayers should be aware of before filing their ITR this year.

1. Mandatory Detailed Disclosures for Deductions

For taxpayers opting for the old tax regime, claiming deductions under Sections like 80C, 80D, 80E, and 80DDB now requires detailed reporting:

• Section 80C: Must disclose the nature of investment (e.g., PPF, ELSS, NSC), amount, and payee details.
• Section 80D: Requires information like insurer name, policy number, and premium breakdown for self/family and parents.
• HRA Claims: Rent amount, landlord name, and PAN (if annual rent exceeds ₹1 lakh) are now mandatory.
• Section 80E/80EEA: Details of education or home loans must be furnished, including interest and lender particulars.

Why it matters: These validation checks reduce the chances of errors and false deduction claims, making ITRs more accurate and compliant.

2. Long-Term Capital Gains (LTCG) Reporting Allowed in ITR-1 and ITR-4

Previously, taxpayers with LTCG exceeding ₹1 lakh had to file ITR-2 or ITR-3. Now, LTCG up to ₹1.25 lakh under Section 112A (from listed equity shares or mutual funds) can be disclosed directly in ITR-1 and ITR-4.

Who benefits: Salaried individuals and small investors with modest equity gains can now use simpler forms.

3. Mandatory Mention of TDS Sections

Taxpayers now need to specify the exact section under which TDS was deducted for different income sources. For instance:

• Section 192 for salary
• Section 194A for interest income
• Section 194H for commission, etc.

Why it's important: Ensures accurate matching of TDS credits with Form 26AS and reduces chances of processing delays or tax credit mismatches.

4. Revised Asset Reporting Thresholds

In line with streamlining compliance for smaller taxpayers, the threshold for asset and liability reporting in ITR-3 and ITR-4 has been revised upward.

Who benefits: Small business owners and professionals with limited asset base may now be exempt from furnishing full asset-liability details.

5. Improved Reporting of Self-Occupied House Property

Taxpayers can now report interest on loans for self-occupied property more clearly under both regimes, including:

• Interest paid
• Lender’s name and PAN
• Address of the property

Why it matters: Helps claim home loan interest deduction (up to ₹2 lakh) under the old regime without ambiguity.

6. Integration of Updated Capital Gains Rules

The Excel utilities now reflect updated capital gains rules, including:

• Grandfathering provisions for equity bought before Feb 1, 2018
• Indexation details for non-equity assets
• Segregated reporting for short-term and long-term gains

Taxpayer tip: Ensure proper documentation and acquisition dates are readily available when filling these sections.

7. Smarter Excel Utility with Error Detection

The revamped Excel utilities now come with real-time validation, smarter error detection, and section-wise instructions. This includes:

• Alerts for missing mandatory fields
• Automated calculations for tax and surcharge
• Pop-up tooltips for section-wise help

Advantage: Reduces manual errors and makes the filing experience smoother, especially for first-time filers.

Another Important Change: TDS Code Validation in ITR-1

One of the most impactful updates in the ITR-1 utility for AY 2025–26 is the automatic disqualification of returns based on certain TDS section codes. If your Form 26AS reflects TDS under the codes listed below, the utility will not allow filing through ITR-1 — helping prevent incorrect or defective filings.

Disqualifying TDS Sections Include:

• 194B – Winnings from lotteries
• 194BB – Winnings from horse races
• 194S – Income from crypto assets
• 194LA – Compensation on land or building acquisition
• 195 – Payments to non-residents
• 196A, 194Q, 194R – Cross-border/business payments

ITR Excel Utility – Smart Features for 2025–26

This year's Excel utility has added automation and intelligence: 

• Real-time field validations
• Auto-tax calculation
• Dropdown menus for sections and deductions
• Mandatory field alerts
• Error summary sheet for quick fixes

Benefit: Prevents incorrect filings and speeds up the return processing by catching errors at the filing stage itself.

Whether you are a salaried employee claiming HRA or a freelancer under presumptive tax, these changes mean you’ll need to be more precise and accurate in your disclosures this year.

Key Takeaway for Taxpayers

For Assessment Year 2025–26, the Income Tax Department has introduced significant changes in ITR-1 and ITR-4 utilities, especially affecting salaried individuals and those claiming deductions under the old tax regime. With stricter validation rules, detailed disclosure requirements, and disqualification from ITR-1 in cases involving crypto, gaming, or cross-border income, taxpayers must exercise greater care while filing. To avoid delays, rejections, or defective return notices, it’s crucial to file accurately, with all required information and documentation. Early preparation and expert assistance can ensure a smooth, error-free filing experience — and help you maximize your eligible tax benefits.

Need Help with Your ITR Filing for AY 2025–26?

Filing your Income Tax Return (ITR) can be confusing, especially with new validation rules, schema updates, and detailed disclosure requirements introduced this year. Whether you're a salaried individual, freelancer, or small business owner, getting expert assistance can save you time, prevent costly mistakes, and help you claim all eligible deductions.

IndiaFilings is here to simplify the process. From document collection and deduction checks to expert validation and e-filing, our team ensures your return is:

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Frequently Asked Questions

1. When were ITR-1 and ITR-4 Excel utilities for AY 2025–26 released?

The Income Tax Department released the Excel utilities for ITR-1 and ITR-4 on May 30, 2025, allowing taxpayers to file returns for income earned in FY 2024–25.

2. What is the due date to file ITR-1 and ITR-4 for AY 2025–26?

Taxpayers must file ITR for FY 2024-25 by September 15, 2025 . The deadline has been extended to September 15, 2025, from the usual deadline of July 31.

3. Who is eligible to file ITR-1 for AY 2025–26?

ITR-1 is applicable to resident individuals (other than "not ordinarily resident") with total income up to ₹50 lakh from salary, one house property, interest income, and certain capital gains. Individuals with foreign income, crypto, or certain TDS deductions are not eligible.

4. What are the key changes in the ITR-1 Excel utility for FY 2024–25?

Key changes include:

• Enhanced disclosures for HRA, Section 80C, 80D, 80E, 80EE, 80EEA, and 80DDB
• Mandatory policy/document numbers for deduction claims
• Auto-disqualification based on certain TDS sections like 194B, 194S (crypto), 194R, etc.

5. Can I use ITR-1 if I have crypto or online gaming income?

No, if your Form 26AS shows TDS under sections like 194S (crypto) or 194B (lottery/gaming), you cannot file using ITR-1. You must choose ITR-2 or another appropriate form.

6. What additional details are required to claim House Rent Allowance (HRA) in ITR-1?

To claim HRA in ITR-1 for AY 2025–26, you must now provide:

• Place of work
• Actual rent paid
• Basic salary and DA
• HRA received
• 40% or 50% of basic salary (metro/non-metro rule)

7. What is the new validation rule for claiming Section 80C deductions?

You must now enter the policy number or document ID when claiming deductions under Section 80C (like PPF, ELSS, LIC, etc.).

8. Are home loan or electric vehicle loan deductions affected in the new ITR utilities?

Yes, for deductions under Sections 80EE, 80EEA (home loan) and 80EEB (EV loan), detailed disclosures are now mandatory — including loan account number, sanction date, lender name, and outstanding amount.

9. Why has the Income Tax Department introduced stricter validation rules?

The stricter validation rules aim to reduce false claims, prevent misfiling, and ensure faster, more accurate ITR processing by automating checks at the filing stage.

10. How can IndiaFilings help with ITR filing for AY 2025–26?

IndiaFilings offers expert-assisted ITR filing services, ensuring:

• Full compliance with updated schema
• Zero validation errors
• Maximized eligible deductions
• On-time filing for salaried individuals, freelancers, and small businesses

RENU SURESH Expert

Updated on: June 6th, 2025