Good news for salaried tax payers! The government has made tax filing easier for those earning up to Rs 1.25 lakh through long-term capital gains from equities or equity mutual funds. Earlier, salaried individuals with income from capital gains were required to file Form ITR-2 even where the capital gains were non-taxable.
From this year, the new Form ITR-1 has a small section for reporting long-term capital gains on which tax is not payable. Currently, ITR 1 is filed by individuals with income up to Rs 50 lakh from salary, one house property, interest and agriculture income. However, if they made capital gains in a particular year, they had to file ITR-2.
To ease the compliance burden, the tax department has exempted salaried individuals with long-term capital gains up to Rs 1.25 lakh annually from filing ITR 2 form.
It must be noted that the government enhanced the threshold for tax-free long-term capital gains from Rs 1 lakh to Rs 1.25 lakh in the Budget this year.
However, the tax rate on long-term capital gains has been increased from 10% to 12.5%.
“This change streamlines the tax filing process, making it more accessible and less burdensome for small investors and salaried individuals, encouraging timely compliance,” An tax expert says.
However, if a taxpayer earns long-term capital gains in excess of Rs 1,25,000 or any other long term capital gains other than equities or units of business trust or earns short-term capital gains or has carried forward or brought forward capital losses or derived income, the salaried individual would have to fill Form ITR-2 for filing return of income.
There is a similar change in the ITR-4, which applies to tax payers resorting to presumptive taxation for their business income.
Source from: https://www.newindianexpress.com/nation/2025/May/01/tax-filing-made-easier-for-the-salaried-class
