New ITR Rules: Relief For Small Investors | Simpler Returns For LTCG Of Up To ₹1.25 Lakh

Small investors just got a reason to smile! In a move that simplifies tax filing and reduces paperwork, the Finance Ministry has notified new income tax return forms for the financial year 2024-25 — and they come with major relief for equity investors. The revamped ITR-1 (Sahaj) now includes long-term capital gains (LTCG) up to ₹1.25 lakh, exempt under Section 112A. This benefits taxpayers earning up to ₹50 lakh annually from sources like salary, one house property, and bank interest. The idea? Simplify returns for the average investor and make the system more user-friendly. But there’s a catch — short-term capital gains or property sales still push you into ITR-2 territory. Any LTCG above ₹1.25 lakh also moves you out of Sahaj and will attract a 12.5% tax.