ITR 2025: Income Tax Portal Opens for Filing ITR-1 and ITR-4 - 5 Common Mistakes Taxpayers Must Avoid

The Income Tax Department has enabled the online filing of ITR-1 and ITR-4 forms for Financial Year 2024-25 (Assessment Year 2025-26) on its official e-filing portal. This early availability of the utility brings welcome relief to lakhs of small taxpayers who prefer simple return forms and can now begin their return-filing process without waiting for the deadline crunch. However, with the convenience comes the responsibility to avoid common mistakes that could lead to processing delays, missed refunds, or even notices.

To decode the key eligibility criteria, new changes, and essential do’s and don’ts, we spoke to leading tax experts. Here’s everything you need to know before you file your ITR this season.

Who Can File ITR-1 and ITR-4? Know the Eligibility
ITR-1 (Sahaj) is meant for resident individuals whose total income is up to Rs 50 lakh, earned from:
Salary or pension
One house property
Other sources like interest income (excluding winnings from lotteries, gambling, etc.)
Agricultural income up to Rs 5,000

But there are several exclusions, warns CA Gaurav Makhijani, Associate Partner and Head of Tax (North India & Gujarat) at Rödl & Partner India. “ITR-1 cannot be used if you have business income, capital gains exceeding a threshold, are a director in a company, hold foreign assets or income, or are a non-resident/not ordinarily resident,” he says.

“ITR-1 can be used to report long-term capital gains under Section 112A if the gain is up to Rs 1.25 lakh,” Makhijani adds. “Beyond this, you’ll need to switch to ITR-2 or ITR-3.”
ITR-4 (Sugam) is for resident individuals, HUFs, or firms (excluding LLPs) opting for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE. Your income should again be below ₹50 lakh, and not from more than one house property, foreign assets, or company directorships.

“ITR-1 and ITR-4 are designed for small taxpayers with simpler compliance needs,” says Makhijani. “It reduces the burden of excessive disclosure.”

Why Early Utility Access Matters for Taxpayers
While the forms were delayed this year, their early June availability still offers significant benefits.

“This allows sufficient time for taxpayers to familiarise themselves with the utility, gather relevant documents, and rectify any discrepancies in Form 26AS or AIS,” says Makhijani. “It’s also a good opportunity to seek help from the CPC call centre, if required.”

Deepak Kumar Jain, Founder and CEO of TaxManager.in, agrees. “Early filing helps ensure timely refunds. If your Form 26AS and AIS are updated with correct TDS details, you can file right away using ITR-1 or ITR-4,” he advises. “Why delay when it can be done now?”

However, Vivek Jalan, Partner at Tax Connect Advisory Services LLP, raises a cautionary flag. “It’s best to wait till after June 15, 2025 if TDS/TCS has been deducted, since credits may not reflect before then,” says Jalan. “Filing too early could result in a loss of credit unless the return is revised later.”

He also underscores the importance of matching ITR disclosures with GST records, especially for those filing ITR-4. “Ensure all income sources, including exempt ones like agricultural income, are disclosed fully.”

What if You’re Waiting to File ITR-2 or ITR-3?
Currently, only ITR-1 and ITR-4 are available for online filing. Taxpayers who need to file ITR-2 or ITR-3—typically those with capital gains, multiple properties, foreign income, or business/professional income—will have to wait.

But don’t just sit idle. “Use this time to prepare your tax computation, gather documents, and reconcile income details with Form 26AS and AIS,” suggests Makhijani. “If you have tax due, pay it early to avoid interest under Section 234B.”

Deepak Jain adds that capital gains data from mutual funds or asset sales should be computed accurately to avoid misreporting.

Vivek Jalan highlights another crucial update: “Long-Term Capital Gains (LTCG) on equities and mutual funds will be taxed at 10% until July 22, 2025, and at 12.5% thereafter. Short-Term Capital Gains (STCG) under Section 111A will be taxed at 20% post July 22, up from 15%. Mismatches here will trigger notices.”

So, keeping accurate statements from brokers and intermediaries, and updating them in your return correctly, is key.

Major Changes in ITR-1 and ITR-4 This Year
While most of the form structure remains unchanged from last year, one significant update in ITR-1 is worth noting.

“For the first time, long-term capital gains under Section 112A up to Rs 1.25 lakh can be reported in ITR-1,” says Makhijani. “Earlier, ITR-1 couldn’t be used for any capital gains.”
This allows some salaried individuals or retirees who have sold equity shares or mutual funds within this limit to continue using ITR-1, making compliance smoother.

5 Common Mistakes to Avoid While Filing ITR-1 or ITR-4

With expert inputs, here’s a checklist of the top 5 mistakes taxpayers should steer clear of this season:

1. Filing Before TDS/TCS Details Reflect
“TDS/TCS credits may take time to show up in Form 26AS. Filing too early could mean loss of credit or the need for revision later,” warns Jalan.

2. Using the Wrong ITR Form
Many salaried individuals with capital gains or foreign assets wrongly use ITR-1, while business owners with incomes over Rs 50 lakh may file ITR-4 incorrectly.

3. Not Reconciling with AIS/26AS
Mismatch between reported income and income in AIS or Form 26AS is a common red flag.

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4. Failing to Report Exempt Income
“Even exempt incomes like agricultural income, interest from PPF, etc. must be declared,” says Jalan.

5. Ignoring GST Linkages
If you’re filing ITR-4 and are GST-registered, your income disclosures should align with GST returns.
Mismatch in income figures between GST and ITR can be a red flag.

Prepare Early, File Smart
While the final due date for non-audit taxpayers is July 31, 2025, and has been extended to September 15 in certain cases, experts caution against procrastination.
 

“Start now—even if the form isn’t yet enabled,” says Makhijani. “Paying advance tax, gathering documents, and ensuring reconciliation can save stress and money later.”

With tax rules getting sharper and data scrutiny increasing, early preparation and accurate disclosure are your best allies this filing season.