New Delhi: Taxpayers have received a major relief regarding Long Term Capital Gains (LTCG) from the stock market. The government has now allowed LTCG of up to Rs 1.25 lakh to be reported in the simpler ITR-1 form. This applies to gains from listed shares and equity mutual funds.
Earlier, even a small LTCG required taxpayers to file ITR-2, which is more complex. With this change, small investors can now avoid complicated tax forms and file returns more easily.
Who Benefits the Most?
This move mainly benefits salaried individuals and retail investors. People who invest small amounts in shares or through SIPs will find tax filing simpler.
Since they no longer need to switch to ITR-2 for small gains, compliance becomes easier, faster, and less stressful.
Conditions for Filing ITR-1
To use ITR-1, certain conditions must be met. The total income should be below Rs 50 lakh. Income sources should include salary, one house property, and interest or other basic sources.
Additionally, LTCG should not exceed Rs 1.25 lakh. If gains go beyond this limit, or if the taxpayer has business income or complex capital gains, they must file ITR-2 or ITR-3 instead.
Other Key Changes Introduced
The government has also made several other updates to improve the filing process. Taxpayers can now provide two mobile numbers, two email IDs, and two addresses, instead of just one earlier.
For political donations under Section 80GGC, more details are now required. Taxpayers must disclose the name and PAN of the political party, which increases transparency.
Important Things to Check Before Filing
Before filing returns, taxpayers should carefully check AIS and Form 26AS. Choosing the correct tax regime is also important, as the new regime is now the default option.
Interest from savings accounts must be declared properly. It is also necessary to ensure that Aadhaar is linked with the mobile number. Foreign assets, if any, must be disclosed correctly.
Deadline to Remember
The deadline to file Income Tax Returns for the financial year is July 31, 2026. With these changes, tax filing has become simpler and more convenient, especially for small investors who earlier faced unnecessary complexity.
