Summary
Unlock Your Tax Filing Potential with Free Excel Tools for ITR-1 and ITR-4 AY 2025-26 is an overview of the Income Tax Department of India’s newly released Excel utilities designed to assist taxpayers in filing their Income Tax Returns (ITRs) for Assessment Year (AY) 2025-26, corresponding to the Financial Year 2024-25. These tools specifically support the ITR-1 (Sahaj) and ITR-4 (Sugam) forms, which cater to salaried individuals and small taxpayers opting for the presumptive taxation scheme, respectively. The Excel utilities enable offline preparation, validation, and generation of JSON files for online submission, providing a user-friendly and accessible alternative to direct e-filing.
The 2025-26 filing season introduces important updates, including new compliance requirements such as the acknowledgment via Form 10-IEA for first-time opt-outs, additional schedules related to deductions under sections 80DD and 80U, and stricter validation rules that disallow filing under ITR-1 if income sources include certain TDS codes or activities like online gaming and cryptocurrency transactions. To accommodate these changes and ensure system readiness, the Central Board of Direct Taxes (CBDT) has extended the filing deadline to September 15, 2025, providing taxpayers with more time to comply amid tighter timelines for reflecting Tax Deducted at Source (TDS) credits.
The release of these Excel utilities has been positively received by tax professionals and taxpayers, who view them as a helpful tool to reduce errors, simplify filing, and encourage voluntary compliance among small taxpayers. However, the tools require a genuine licensed version of Microsoft Excel 2016 or later with macros enabled to function correctly, which may pose a challenge for some users. Additionally, some users have highlighted limitations related to manual data handling and the need for supplementary automation solutions to enhance usability.
Overall, the free Excel tools for ITR-1 and ITR-4 AY 2025-26 represent a significant step towards simplifying tax compliance in India by blending offline convenience with official e-filing requirements. Despite their benefits, taxpayers are advised to carefully verify their eligibility for these forms and file returns within the extended deadlines to avoid penalties and rejections.
Background
For the Assessment Year (AY) 2025-26, significant updates have been introduced in the Income Tax Return (ITR) filing process, particularly concerning the ITR-4 form. One of the notable changes includes the requirement for first-time opt-outs to provide acknowledgment details through Form 10-IEA, which is a new compliance measure starting from AY 2025-26. Additionally, credits arising from Tax Deducted at Source (TDS) statements, which are due to be filed by 31st May 2025, are expected to be reflected only from early June, thereby reducing the effective window available for filing returns if no extension is granted.
Due to these extensive changes and the need for adequate system readiness, integration, and testing of the updated ITR utilities, the Central Board of Direct Taxes (CBDT) has decided to extend the due date for filing returns for AY 2025-26. The release of the Excel Utilities for ITR-1 and ITR-4 forms has been positively received by tax professionals, as it is expected to facilitate smoother filing and improve user experience.
These changes aim to encourage greater voluntary compliance and reduce filing-related stress among taxpayers, especially small taxpayers. The updated system is designed to be more inclusive and user-friendly, promoting better compliance and simplification of the tax filing process. Notably, the structure and content of Forms ITR-1 and ITR-4 for AY 2025-26 remain largely consistent with the previous year, ensuring continuity while incorporating necessary improvements.
Overview of Income Tax Return Forms
For the Assessment Year (AY) 2025-26, the Income Tax Department has released Excel utility versions of Income Tax Return (ITR) Forms 1 and 4 to facilitate taxpayers in filing their returns for the Financial Year (FY) 2024-25. These tools are available for download on the official income tax e-filing portal, aiming to simplify the return preparation process.
The ITR-1, also known as Sahaj, is designed for Indian residents (excluding those who are not ordinarily residents) with an annual income up to ₹50 lakh. This form is suitable for individuals earning income from salary, owning a single house property, and receiving other income such as bank interest or agricultural income up to ₹5,000. It is primarily intended for salaried taxpayers with a straightforward financial profile.
On the other hand, the ITR-4, or Sugam, caters to taxpayers who have opted for the presumptive taxation scheme under Sections 44AD, 44ADA, or 44AE, with income up to ₹50 lakh. This form is applicable for those engaged in eligible business or professional activities and who choose the presumptive taxation route to declare income.
Additionally, ITR-1 can be used in cases where the assessee needs to club the income of another person, such as a spouse or child, provided that the income falls within the categories applicable to this form. Taxpayers are advised to carefully verify their eligibility before selecting the appropriate form, as filing with an incorrect form may lead to complications or rejection of the return by the Income Tax Department.
Recent updates from AY 2024-25 have introduced new schedules relating to deductions under sections 80DD and 80U, which are also reflected in these forms to ensure compliance with the latest tax provisions. Overall, the ITR-1 and ITR-4 forms for AY 2025-26 maintain consistency with the previous year, aiming to enhance voluntary compliance and ease the filing process for small taxpayers.
Free Excel-Based Tools for Tax Filing AY 2025-26
The Income Tax Department has released the Excel utilities for Income Tax Return (ITR) Forms 1 and 4 for the Assessment Year (AY) 2025-26, facilitating taxpayers in preparing and filing their returns for the financial year 2024-25. These Excel-based tools are available for download on the official income tax e-filing portal and enable offline data entry, validation, and generation of JSON files for uploading online, providing a convenient alternative to direct online filing.
The ITR-1 (Sahaj) utility caters primarily to salaried individuals and pensioners with income up to ₹50 lakh, whereas the ITR-4 (Sugam) utility is designed for taxpayers opting for the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE, provided their income does not exceed the prescribed limits. The updated utilities incorporate new validation rules, such as invalidating ITR-1 filings when certain TDS section codes—like 194B, 194BB, 194S, 194LA, 195, 196A, 194Q, and 194R—are reported in Schedule TDS2 or TDS3, directing taxpayers with such income sources to file using more appropriate forms.
In addition to functionality enhancements, the new Excel utilities feature user-friendly improvements such as drop-down menus for deductions under sections 80C, 80GG, and others, aimed at simplifying the filing process and encouraging greater compliance among small taxpayers. Taxpayers are advised to verify their eligibility carefully before selecting the form, as incorrect filings may lead to rejections or complications during processing.
The release of these Excel utilities has been welcomed by tax professionals and practitioners, as it provides relief by enabling early preparation ahead of the ITR filing start date on April 1, 2025. However, to use these tools effectively, taxpayers must have a genuine licensed version of Microsoft Excel 2016 or later with macros enabled, since the utilities rely on Visual Basic for Applications (VBA) to perform validations and automate workflows.
Using the Excel Tools
The Income Tax Department provides official Excel utilities for ITR-1 and ITR-4 (version 1.0) as offline tools to facilitate the filing of Income Tax Returns for Assessment Year 2025–26. Taxpayers can download these utilities from the department’s website, fill in their income and other relevant details offline, validate the information using built-in checks, and then generate a JSON file for uploading during the online filing process.
To use these Excel utilities effectively, it is essential to have a genuine, licensed Microsoft Excel version 2016 or later installed, with macros enabled. The macro functionality plays a critical role in automating validations and calculations within the utility, ensuring accuracy and compliance with the filing requirements. Users are advised to carefully enable macros as per the instructions provided in the help files accompanying the utilities.
The tools come with integrated validation rules to prevent submission errors. For instance, if certain TDS section codes such as 194B, 194BB, 194S, 194LA, 195, 196A, 194Q, or 194R appear in Schedule TDS2 or TDS3, the utility will flag the ITR as invalid for filing under ITR-1. This enforces strict adherence to eligibility criteria, helping taxpayers select the correct form and avoid rejection of their returns.
Filing Process and Deadlines
The filing process for Income Tax Returns (ITRs) for Assessment Year (AY) 2025-26 has seen important updates aimed at easing compliance for taxpayers. The Central Board of Direct Taxes (CBDT) has introduced extensive changes in the notified ITR forms and has released updated utilities to facilitate e-filing for the financial year (FY) 2024-25.
Taxpayers can begin filing their returns using the new ITR utilities, which were officially notified on April 29, 2025. The ITR-1 and ITR-4 forms are key for individuals and certain types of taxpayers, with the ITR-4 (SUGAM) form traditionally having a due date of July 31, 2025. However, due to the systemic updates and to accommodate the additional schedules introduced from AY 2024-25, the CBDT has extended the filing deadline to September 15, 2025, providing taxpayers with an extended window beyond the usual July 31 cutoff.
The revised ITR-4 form includes new schedules related to deductions under sections 80DD and 80U, reflecting updated tax provisions for the current assessment year. Early filing remains encouraged to avoid last-minute delays, especially since credits arising from Tax Deducted at Source (TDS) statements, which are due by May 31, 2025, will only begin reflecting in early June, narrowing the effective time for filing without an extension.
Penalties and Consequences of Late or Non-Filing
The deadline for filing ITR-1 and ITR-4 for the Assessment Year 2025–26 has been extended to September 15, 2025, from the usual July 31, providing taxpayers with additional time to comply and avoid penalties. Despite this extension, failure to file income tax returns within the prescribed time can attract penalties and consequences under the Income Tax Act.
Late filing of returns may lead to a penalty under section 234F, which imposes a fee for returns filed after the due date. Additionally, non-filing or concealment of income can trigger penalties under sections relating to concealment and prosecution, which can include fines and legal action. The tax authorities may also initiate income tax prosecution proceedings in severe cases of non-compliance or deliberate evasion.
Moreover, the income tax return filed using the newly released Excel utilities must adhere to updated validation rules. For instance, if certain TDS section codes such as 194B, 194BB, 194LA, 195, 196A, and others appear in Schedule TDS2 or TDS3, the return will be deemed invalid for filing under ITR-1, potentially leading to the need for refiling or additional scrutiny.
The introduction of these tools and the extended deadline aims to encourage voluntary compliance, reduce filing-related stress, and make the filing process more user-friendly for small taxpayers, thereby minimizing the risk of penalties due to errors or delays. However, taxpayers are advised to file their returns within the stipulated time to avoid the financial and legal consequences of late or non-filing.
Comparison with Other Tax Filing Options
The Income Tax Department offers multiple options for filing income tax returns, including online submission through its portal, offline Excel utilities, and various software tools. For Assessment Year (AY) 2025-26, the department has released updated Excel utilities for ITR-1 (Sahaj) and ITR-4 (Sugam), allowing taxpayers to fill income details offline, validate data, and generate JSON files for upload. This offline method caters to users who prefer working with spreadsheets or face internet connectivity issues.
In contrast, the online filing option provides a more streamlined experience with prefilled data fields, drop-down menus, and direct submission on the portal, simplifying the process especially for small taxpayers with simpler income profiles. Additionally, the department supports e-filing through various software programs, such as ITR-1, ITR-2, and ITR-4S, which can be used for online filing with enhanced user interface and error checks. This method is compulsory for individuals or Hindu Undivided Families with total income exceeding Rs 10 lakh, emphasizing the government’s push towards digital compliance.
While Excel utilities offer flexibility and offline convenience, they require manual operations, which can be cumbersome for some users. Taxpayers relying on offline tools may need supplementary assistance or automation solutions to handle complex data processing. Conversely, the online portal and associated software reduce manual input errors and expedite filing but require a stable internet connection and familiarity with the portal interface.
User Experience and Feedback
The release of the Excel Utilities for ITR-1 and ITR-4 for Assessment Year 2025–26 was welcomed by users and professionals alike, as it provided significant relief in tax filing processes. Himank Singla, Partner at SBHS & Associates, expressed positive feedback regarding the timing and availability of these tools, highlighting the department’s decision to allow additional time for system development, integration, and testing as a beneficial move.
Users have noted that the updated tools maintain consistency with the previous year’s forms, which helps reduce the learning curve and eases transition for taxpayers familiar with earlier versions. The changes introduced are expected to encourage greater voluntary compliance and reduce filing-related stress, making the system more inclusive and user-friendly, especially for small taxpayers. This simplification is viewed as a step toward improving compliance and overall taxpayer experience.
Despite these advancements, some users still face challenges due to the reliance on manual operations or the necessity of using complex external tools for certain data processing tasks. Solutions like SheetFlash have been introduced as no-code automation alternatives that replicate macro functionalities online and provide advanced processing capabilities without requiring knowledge of programming languages such as Python or VBA.
Updates and Changes for AY 2025-26
For the Assessment Year (AY) 2025-26, corresponding to the financial year (FY) 2024-25, the Income Tax Department has introduced new versions of the ITR-1 and ITR-4 forms, incorporating several significant updates aimed at simplifying the tax filing process for individual taxpayers. The updated ITR-4 form now includes additional schedules relating to deductions under sections 80DD and 80U, expanding the scope for claiming benefits for disability and related allowances.
A key modification in the ITR-1 form for AY 2025-26 invalidates its use for taxpayers earning income from certain sources such as online gaming and cryptocurrencies. Taxpayers with these income streams are advised to use alternative, appropriate ITR forms to avoid rejection during filing. This change emphasizes the importance of carefully reviewing eligibility criteria before selecting the applicable form for filing the Income Tax Return to prevent complications or rejections by the Income Tax Department.
The new forms have also been designed to accommodate changes in the tax structure, including modifications to deductions under sections 80C, 80GG, and others. The Excel utility version
The content is provided by Avery Redwood, Fact-Nest
