ITR Forms 2025: Salaried, Business Owners, or Investors—Which ITR Form Is Right for You?

With July approaching, the income tax return (ITR) filing season for 2025 is officially underway. The government has made several changes this year to make the process simpler, especially for salaried taxpayers, small investors, and those who have earned money from property sales. These new rules will help save both time and effort, making tax filing more convenient than before.

Key Updates: Big Relief for Small Investors and Property Sellers

Until now, even if you earned a small capital gain from stocks or mutual funds, you were required to file complex forms like ITR-2 or ITR-3. But from this year, if your long-term capital gain (LTCG) is below ₹1.25 lakh, you can file your return using the much simpler ITR-1 (Sahaj) or ITR-4 (Sugam) forms.

This change is especially beneficial for small investors and salaried individuals who previously had to navigate through detailed disclosures for minimal earnings.

Sold a Property? You Now Have Two Taxation Options

If you bought a property before July 23, 2024, and are selling it now, you can choose between two capital gains taxation methods:

• Pay 12.5% tax without indexation benefits

• Pay 20% tax with indexation benefits

To make reporting easier, the ITR-2 form now includes separate sections for transactions made before and after July 23, 2024, helping taxpayers accurately report gains based on updated rules.

Asset Reporting Threshold Increased for Middle-Class Taxpayers

Earlier, if your total net assets exceeded ₹50 lakh, you were required to disclose detailed information about your house, car, loans, and other assets. Now, this threshold has been increased to ₹1 crore—a welcome change for middle-class taxpayers.

Which ITR Form Should You File in 2025?

Here’s a quick guide to help you choose the right ITR form based on your income source:

• ITR-1 (Sahaj): For salaried individuals with income from salary, interest, and one residential property.

• ITR-4 (Sugam): For small business owners, freelancers, or professionals filing under the presumptive taxation scheme.

• ITR-2: For those with income from stocks, mutual funds, or more than one house property.

• ITR-3: For individuals earning from business or profession, including those with partnership income.

• ITR-5, ITR-6, ITR-7: For partnership firms, companies, and trusts respectively.

Whether you’re a salaried employee, a small trader, or someone who sold shares or property, the new ITR filing rules for FY 2024-25 are designed to make your tax process smoother. Choosing the right form based on your income type is the first step toward hassle-free compliance.