ITR-1 (Sahaj) AY 2026-27: New Changes, Eligibility, Due Date, and How to File Online
- CA Pratik Bharda
- Apr 1
- 12 min read
ITR-1 (Sahaj) is the most commonly used income tax return form for salaried individuals and pensioners in India. For AY 2026-27, the Income Tax Department has introduced important updates that make the form more flexible for taxpayers with simple income structures. The inclusion of limited long-term capital gains under Section 112A and the ability to report income from up to two house properties have expanded the scope of ITR-1 significantly.
At the same time, compliance checks have become stricter. Taxpayers are now expected to properly match their income with AIS, Form 26AS, TIS, bank statements, and TDS records before filing. Incorrect reporting, missing income disclosures, or choosing the wrong ITR form can result in defective return notices, delayed refunds, or additional scrutiny.
For salaried taxpayers, pensioners, and small investors, understanding whether ITR-1 is applicable is extremely important before filing returns for FY 2025-26. A properly filed ITR not only ensures tax compliance but also helps in faster refund processing, easier loan approvals, visa applications, and maintaining a clean financial record.
Table of Content
What is ITR-1 (Sahaj)?
ITR-1, also known as Sahaj, is a simplified income tax return form designed for resident individuals having relatively straightforward income sources. It is mainly used by salaried employees, pensioners, and taxpayers earning limited additional income such as bank interest or dividend income.
The form allows reporting of:
Salary or pension income
Income from up to two house properties
Interest income
Dividend income
Agricultural income up to ₹5,000
Eligible long-term capital gains under Section 112A up to ₹1.25 Lakh
ITR-1 is not suitable for taxpayers having business income, foreign assets, speculative income, complex capital gains, or income exceeding ₹50 Lakh.
One of the biggest advantages of ITR-1 is that much of the information gets pre-filled from Form 16, TDS statements, AIS, and bank-linked reporting systems, making filing easier for small taxpayers.
Who Can File ITR-1 for AY 2026-27
ITR-1 can be filed only by resident individuals whose total income does not exceed ₹50 Lakh during FY 2025-26.
Eligible taxpayers generally include:
Salaried employees
Pensioners
Senior citizens
Small investors
Individuals earning savings or FD interest
Individuals earning eligible LTCG under Section 112A within the prescribed limit
The taxpayer can earn income from:
Salary or pension
Up to two house properties
Other sources, such as interest or dividends
Agricultural income up to ₹5,000
AY 2026-27 has expanded the usability of ITR-1 by allowing reporting of up to two house properties and limited equity-related long-term capital gains.
Who Cannot File ITR-1
Certain categories of taxpayers are not permitted to use ITR-1 even if their income is below ₹50 Lakh.
ITR-1 cannot be used by:
NRIs and RNORs
Individuals having business or professional income
Directors in companies
Taxpayers holding unlisted equity shares
Individuals owning foreign assets
Taxpayers having signing authority in foreign accounts
Individuals earning cryptocurrency income
Taxpayers having taxable capital gains beyond permitted Section 112A gains
HUFs and firms
For example, if a salaried employee also trades actively in shares as a business or earns freelance income, ITR-1 may not be applicable.
Similarly, taxpayers holding foreign stocks through ESOPs or overseas investment platforms must generally file ITR-2 instead because foreign asset disclosure becomes mandatory.
Structure of ITR-1 Form
The ITR-1 (Sahaj) form is divided into multiple sections to help taxpayers report income, deductions, taxes paid, and bank details in a structured manner. Each part of the form captures specific financial information required by the Income Tax Department for accurate tax computation and verification.
Understanding the structure of the form helps taxpayers review pre-filled information properly and avoid mistakes while filing.
Part A – General Information
Part A contains the taxpayer’s basic personal and filing-related details. Most of this information is pre-filled from PAN and Aadhaar records, but taxpayers should still verify everything carefully before submission.
This section generally includes:
Name of the taxpayer
PAN details
Aadhaar number
Date of birth
Address and contact details
Filing status
Nature of employment
Residential status
Filing section under which return is being filed
Taxpayers should ensure that details such as mobile number, email address, and bank-linked information are correct because all communication from the Income Tax Department is sent using these details.
Part B – Gross Total Income
Part B captures details of total income earned during the financial year before deductions are claimed.
This section includes:
Salary or pension income
Income from house property
Income from other sources such as interest or dividends
Eligible long-term capital gains under Section 112A
The portal generally auto-populates salary and TDS information from Form 16 and Form 26AS. However, taxpayers must still verify whether:
FD interest is fully reported
Savings account interest is included
Dividend income is correctly disclosed
Rental income is properly shown
Mismatch between reported income and AIS data may trigger notices later.
Part C – Deductions and Taxable Total Income
Part C is used to claim deductions under Chapter VI-A and calculate taxable income after eligible deductions are reduced from gross total income.
Common deductions reported here include:
Section 80C for PPF, EPF, ELSS, LIC, etc.
Section 80D for health insurance
Section 80CCD(1B) for NPS contribution
Section 80TTA for savings account interest
Section 80G for donations
The updated ITR-1 requires taxpayers to select specific deduction categories while entering deduction details. Taxpayers should keep investment proofs and supporting documents ready in case verification is required later.
Part D – Computation of Tax Payable
Part D calculates the final tax liability of the taxpayer after considering:
Total taxable income
Applicable tax regime
Rebate eligibility
Taxes already paid
TDS credits
Interest liability, if any
This section automatically computes:
Total tax payable
Refund amount
Self-assessment tax payable
Interest under Sections 234A, 234B, and 234C
Taxpayers should carefully verify whether all TDS entries are correctly reflected because missing TDS credits may reduce refunds or increase tax demand.
Part E – Other Information (Bank Account Details)
Part E contains details of all active bank accounts held during the financial year.
Taxpayers are generally required to disclose:
Bank name
Account number
IFSC code
Account type
One bank account must be selected for refund credit. This account should be pre-validated and linked with PAN to avoid refund failures.
Dormant bank accounts inactive for more than three years are usually exempt from reporting.
Schedule IT
Schedule IT contains details of taxes paid directly by the taxpayer apart from TDS deductions.
This includes:
Advance tax payments
Self-assessment tax payments
Taxpayers must enter:
BSR code
Challan serial number
Date of payment
Amount paid
This schedule becomes important when additional tax is paid before filing the return. Incorrect challan reporting may lead to tax credit mismatch.
Schedule-TDS
Schedule-TDS captures tax deducted at source by employers, banks, companies, or other deductors.
The section includes:
TAN of deductor
Name of deductor
Income received
TDS amount deducted
Section under which TDS was deducted
For AY 2026-27, the form additionally requires taxpayers to specify the TDS section, improving compliance tracking.
Taxpayers should match all TDS entries with:
Form 26AS
AIS
Form 16
Bank TDS certificates
before filing the return.
Verification
The verification section is the final declaration made by the taxpayer confirming that all information provided in the return is correct and complete.
The taxpayer confirms:
Income details are true
Deductions claimed are accurate
No material information has been concealed
After completing verification, the return must be e-verified using:
Aadhaar OTP
Net banking
Bank account EVC
Demat account EVC
If the return is not verified within the prescribed time limit, it is treated as invalid and considered as not filed.
Major Changes in ITR-1 for AY 2026-27
The Income Tax Department has introduced several important changes in ITR-1 for AY 2026-27 to improve reporting flexibility and compliance accuracy.
Long-Term Capital Gains Allowed in ITR-1
Taxpayers can now report LTCG under Section 112A arising from:
Listed equity shares
Equity mutual funds
Business trust units
However, this is allowed only if:
Total LTCG does not exceed ₹1.25 Lakh
No brought-forward capital losses exist
No carry-forward losses exist
This change reduces the need for many salaried investors to shift to ITR-2.
Reporting of Two House Properties
Earlier, ITR-1 allowed reporting of only one house property. AY 2026-27 now permits reporting of up to two house properties.
This benefits taxpayers who:
Own two self-occupied houses
Own one rented and one self-occupied property
Have relocated due to employment
Aadhaar Enrollment ID Removed
Only the 12-digit Aadhaar Number is now accepted while filing returns. The Aadhaar Enrollment ID is no longer valid for ITR filing purposes.
Detailed Deduction Disclosure
Taxpayers must now select the exact deduction category while claiming deductions under Sections 80C to 80U. This improves accuracy in deduction reporting and reduces incorrect claims.
Schedule TDS Enhancement
The updated form requires taxpayers to specify the section under which TDS was deducted, such as:
Section 192 for salary
Section 194A for interest income
Section 194 for dividend income
Income Covered Under ITR-1
ITR-1 allows reporting of relatively simple income sources. Salary income remains the primary category covered under the form.
Salary income includes:
Basic salary
HRA
Bonus
Perquisites
Leave encashment
Employer contributions
Pension income is also permitted. Regular pension is taxable under “Income from Salary,” while family pension is generally reported under “Income from Other Sources.”
Taxpayers can also report:
Savings account interest
FD interest
Dividend income
Agricultural income up to ₹5,000
AY 2026-27 additionally allows limited LTCG reporting under Section 112A, which is a major relief for small investors.
Documents Required for Filing ITR-1
Taxpayers should collect all relevant documents before starting the filing process to avoid mismatches or missed disclosures.
Important documents generally include:
PAN and Aadhaar
Form 16
Form 26AS
AIS and TIS
Bank statements
Home loan interest certificate
Investment proofs
Insurance premium receipts
Dividend statements
AIS and TIS are especially important because they capture information such as:
Interest income
Dividend income
Securities transactions
TDS details
High-value financial transactions
Taxpayers should compare these records with their own calculations before filing the return.
Important Due Dates for AY 2026-27
The due date to file ITR-1 (Sahaj) for FY 2025-26 (AY 2026-27) is 31st July 2026 for individuals not requiring tax audit. Missing the filing deadline may result in:
Interest liability
Late filing fees under Section 234F
Refund delays
Loss of certain tax benefits
Increased compliance scrutiny
Taxpayers expecting refunds should ideally file early to ensure faster processing.
Step-by-Step Process to File ITR-1 Online
Taxpayers can file ITR-1 online through the income tax portal.
Step 1: Login to the Portal
Login using:
PAN
Password
OTP authentication
Step 2: Select “File Income Tax Return”
Choose:
Assessment Year 2026-27
Individual category
Online filing mode
Step 3: Select ITR-1
The portal may automatically suggest the applicable ITR form based on available taxpayer information.
Step 4: Verify Pre-Filled Data
Carefully review:
Salary details
TDS entries
Interest income
Personal details
Bank accounts
Step 5: Add Additional Income
Report income not already reflected in pre-filled data, such as:
Savings interest
Dividend income
Additional FD interest
Eligible LTCG
Step 6: Claim Deductions
Enter eligible deductions under applicable sections like:
Section 80C
Section 80D
Section 80CCD(1B)
Section 80G
Step 7: Verify Tax Liability
The portal automatically computes:
Total taxable income
Tax payable
Rebate
Interest
Refund
Step 8: Pay Additional Tax if Required
If any tax remains payable, taxpayers should first pay self-assessment tax and update challan details before submission.
Step 9: Submit and E-Verify
The return can be verified through:
Aadhaar OTP
Net banking
Bank account EVC
Demat account EVC
Failure to verify the return within the prescribed timeline makes the return invalid.
How Tax is Calculated in ITR-1
Tax calculation under ITR-1 depends on:
Gross total income
Eligible deductions
Applicable tax regime
Rebate eligibility
TDS already deducted
Most salaried taxpayers choose between the old and new tax regime depending on their deductions and exemptions.
Taxpayers should verify whether:
Standard deduction has been properly considered
TDS matches Form 26AS
Interest income has been fully disclosed
Eligible deductions have been correctly claimed
Even small omissions in interest or dividend income may result in future notices because the department now receives extensive financial data directly from banks and institutions.
Practical Examples for ITR-1 Filing
Example 1: Salaried Employee with Deductions
Rahul earns:
Salary income of ₹12 Lakh
FD interest of ₹40,000
He invests ₹1.5 Lakh under Section 80C and pays health insurance premium of ₹25,000 under Section 80D.
Particulars | Amount |
Salary Income | ₹12,00,000 |
Interest Income | ₹40,000 |
Gross Total Income | ₹12,40,000 |
Less: Section 80C | ₹1,50,000 |
Less: Section 80D | ₹25,000 |
Taxable Income | ₹10,65,000 |
Since Rahul has simple income sources and income below ₹50 Lakh, he can file ITR-1.
Example 2: Pensioner with LTCG
Meena receives:
Pension income of ₹8 Lakh
Savings interest of ₹20,000
LTCG under Section 112A of ₹1 Lakh
As the LTCG is below ₹1.25 Lakh and no capital losses exist, she remains eligible to file ITR-1.
Example 3: Taxpayer with Two House Properties
Ankit owns:
One self-occupied house
One rented residential property
Since AY 2026-27 allows reporting of up to two house properties in ITR-1, he can continue using the same form provided his overall income and other conditions remain within prescribed limits.
Deductions Available Under ITR-1
Taxpayers filing ITR-1 can claim several commonly used deductions under Chapter VI-A.
Some of the most frequently claimed deductions include:
Section 80C for EPF, PPF, ELSS, LIC, and tax-saving investments
Section 80D for health insurance premium
Section 80CCD(1B) for NPS contribution
Section 80TTA for savings interest
Section 80G for donations
Section 80E for education loan interest
Taxpayers should maintain proper supporting documents because incorrect deduction claims may lead to notices or disallowances during assessment.
Common Mistakes While Filing ITR-1
One of the most common mistakes is selecting the wrong ITR form. Taxpayers often continue using ITR-1 even after becoming ineligible due to capital gains, crypto income, or foreign assets.
Other common mistakes include:
Ignoring AIS entries
Missing dividend income
Not reporting FD interest
Claiming incorrect deductions
Missing bank account disclosures
Forgetting e-verification
Taxpayers should carefully compare:
Form 16
Form 26AS
AIS
TIS
Bank statements
before submitting the return.
Benefits and Limitations of ITR-1
ITR-1 offers several advantages for salaried taxpayers because the form is comparatively simple and easy to file online. Processing is generally faster, and the compliance burden is lower compared to more complex ITR forms.
However, the form also has limitations. It cannot be used for:
Business income
Foreign asset reporting
Complex capital gains
Crypto income
Income above ₹50 Lakh
Taxpayers should therefore evaluate their complete financial profile before selecting ITR-1.
Recent Updates Relevant for AY 2026-27
The Income Tax Department has increasingly focused on data-driven compliance and automated reconciliation systems. AIS integration, TDS matching, and pre-filled returns have significantly improved over the past few years.
The major reliefs introduced in AY 2026-27 include:
Limited LTCG reporting under Section 112A
Reporting of up to two house properties
Improved pre-filled data systems
At the same time, deduction disclosures and TDS reporting have become more detailed, making accurate filing even more important.
The broader framework under the Income Tax Act, 2025 also indicates a gradual shift towards simplified compliance structures with stronger digital verification and reporting integration.
Conclusion
ITR-1 continues to remain the simplest and most widely used return form for salaried individuals and pensioners. The AY 2026-27 updates have expanded its scope by allowing reporting of limited long-term capital gains and income from up to two house properties, making the form more useful for small investors and homeowners.
Before filing, taxpayers should carefully verify eligibility, reconcile AIS and Form 26AS data, review deductions, and ensure all income sources are properly disclosed. Choosing the correct ITR form and filing accurately can help avoid notices, refund delays, and unnecessary compliance issues later.
FAQs
1. Who can file ITR-1 for AY 2026-27?
Resident individuals with total income up to ₹50 Lakh can file ITR-1 if they earn income from salary, pension, up to two house properties, interest income, and eligible LTCG under Section 112A up to ₹1.25 Lakh. It is mainly meant for salaried employees and pensioners with simple income sources.
2. Can NRIs file ITR-1?
No, NRIs and RNORs cannot file ITR-1. They generally need to use ITR-2 or another applicable return form depending on their income sources.
3. Can I report share market LTCG in ITR-1?
Yes, AY 2026-27 allows reporting of LTCG under Section 112A in ITR-1 if the total gain does not exceed ₹1.25 Lakh and there are no carried-forward capital losses. Gains from property, gold, or other capital assets are not allowed in ITR-1.
4. Is dividend income allowed in ITR-1?
Yes, dividend income from shares and mutual funds can be reported under “Income from Other Sources” in ITR-1. Taxpayers should match dividend income with AIS and bank statements before filing.
5. Can ITR-1 be used for two house properties?
Yes, taxpayers can now report income from up to two house properties in ITR-1 for AY 2026-27. This change benefits salaried individuals owning multiple residential properties.
6. What is the due date for filing ITR-1 for AY 2026-27?
The due date for filing ITR-1 for AY 2026-27 is 31 July 2026 for taxpayers not requiring audit.
7. Is Aadhaar mandatory for ITR-1 filing?
Yes, Aadhaar is mandatory for most taxpayers filing ITR-1. Only the 12-digit Aadhaar Number is accepted, and PAN should also be linked with Aadhaar.
8. What documents are needed for filing ITR-1?
Important documents include PAN, Aadhaar, Form 16, Form 26AS, AIS, TIS, bank statements, and investment proofs. Taxpayers should verify all income and TDS details before filing.
9. Can crypto income be reported in ITR-1?
No, cryptocurrency or Virtual Digital Asset income cannot be reported in ITR-1. Taxpayers with crypto transactions generally need to file ITR-2 or ITR-3.
10. Is it compulsory to disclose all bank accounts in ITR-1?
Yes, taxpayers must disclose all active bank accounts held during the financial year while filing ITR-1. Dormant accounts inactive for more than three years are usually exempt.
11. What happens if I do not e-verify my ITR?
If the ITR is not verified within the prescribed timeline, it becomes invalid and is treated as not filed. Taxpayers can e-verify using Aadhaar OTP, net banking, or bank account EVC.
12. How can I download the ITR-1 form in PDF format?
You can download the official ITR-1 (Sahaj) form in PDF format directly from the Income Tax Department website using this link: Download ITR-1 PDF Form (AY 2026-27).
In a strange way, the atmosphere here gave me the same analytical mindset I had during That's Not My Neighbor constantly questioning what’s genuine and what only appears convincing.