Small investors and salaried taxpayers have reason to cheer this filing season. The government has permitted long-term capital gains (LTCG) of up to ₹1.25 lakh earned from listed shares and equity mutual funds to be reported directly in the ITR-1 form, the simpler of the two primary return formats.
Until now, even modest LTCG from the stock market forced taxpayers to shift to ITR-2, a considerably more complex form. That requirement has now been eased, removing a significant compliance burden for millions of retail investors.
Who Stands to Gain
The change is most consequential for salaried individuals and small-scale investors — particularly those putting money into shares or systematic investment plans (SIPs). For this group, tax filing can now be completed without navigating the additional schedules and disclosures that ITR-2 demands.
Eligibility Conditions for ITR-1
Not every taxpayer qualifies for the simplified route. To file using ITR-1, an individual must meet the following criteria:
Total annual income must remain below ₹50 lakh. Income should be drawn from salary, one house property, and basic sources such as interest. LTCG must not exceed ₹1.25 lakh.
Also Read:Nandita Sinha To Exit Myntra Ahead Of Flipkart IPO Plans
Taxpayers with LTCG beyond this threshold, business income, or more complex capital gains structures must continue filing ITR-2 or ITR-3, as applicable.
Other Changes in This Filing Cycle
Several additional updates have been introduced alongside the LTCG relaxation. Taxpayers can now register two mobile numbers, two email IDs, and two addresses in their return — up from one each previously.
Disclosure norms around political donations under Section 80GGC have also been tightened. Taxpayers claiming this deduction must now furnish the name and PAN of the political party, a step aimed at improving transparency.
What to Verify Before You File
Tax experts advise taxpayers to cross-check their Annual Information Statement (AIS) and Form 26AS before submitting returns. Other critical checks include selecting the correct tax regime — the new regime is now the default — accurately declaring savings account interest, ensuring Aadhaar is linked to an active mobile number, and properly disclosing any foreign assets held during the year.
Deadline: July 31, 2026
The last date to file income tax returns for the current financial year is July 31, 2026. With the easing of LTCG reporting norms, the government has taken a concrete step toward simplifying compliance for the country’s growing base of retail market participants.
