What is ITR 1 Form

The Income Tax Return (ITR) forms are essential tools for every taxpayer to report their income and taxes to the government. For the Assessment Year (AY) 2025-26, the Income Tax Department has introduced several updates to streamline the filing process. Among these, the ITR-1 Form, also known as "Sahaj," has undergone significant changes. This article highlights the purpose of the ITR-1 form, its eligibility criteria, and the 9 key changes taxpayers must know for AY 2025-26.

Filing income tax returns is a critical step for every taxpayer to stay compliant with Indian tax laws. For AY 2025-26, the government has introduced updates to ITR forms, with ITR-1 being a key focus. These changes aim to simplify the process, ensure transparency, and align with new tax regulations. If you are a salaried individual or a pensioner, understanding these updates is crucial to avoid errors and penalties during filing.

ITR-1, commonly referred to as "Sahaj," is a simplified income tax return form designed for individuals with straightforward income sources. It is primarily used by salaried individuals, pensioners, and those earning income from one house property or interest. This form is ideal for taxpayers who do not have complex financial portfolios, making it an easy and efficient option for filing returns.

The ITR-1 form is designed for individuals with simple income structures. You are eligible to file ITR-1 if:

• Your total income is up to Rs. 50 lakh.
• Your income sources include salary, pension, one house property, or interest.
• You do not have income from business, capital gains, or foreign assets.

This form is tailored for taxpayers with minimal financial complexities, ensuring a hassle-free filing experience.

While the ITR-1 form is convenient, it is not suitable for everyone. You cannot file ITR-1 if:

• You earn income from business or profession.
• You have income from capital gains or foreign assets.
• Your total income exceeds Rs. 50 lakh in a financial year.
• You own more than one house property or have agricultural income exceeding Rs. 5,000.

If any of these conditions apply, you must explore other ITR forms, such as ITR-2 or ITR-3.

The government has introduced 9 significant changes to the ITR-1 form for AY 2025-26. These updates aim to enhance accuracy, compliance, and ease of filing. Let us explore these changes in detail:

1. Expansion of eligibility to file ITR-1 and ITR-4

Taxpayers with specific income sources can now file ITR-1 or ITR-4 based on revised eligibility criteria. This change ensures that more individuals can benefit from these simplified forms.

2. Aadhaar enrolment ID not acceptable

Previously, individuals could use their Aadhaar enrolment ID for filing returns. However, for AY 2025-26, only a valid Aadhaar number linked to your PAN will be accepted.

Pro-tip: Ensure your Aadhaar details are updated and linked to your PAN to avoid processing delays.

3. Opting out of the new tax regime by small business owners

Small business owners and professionals opting out of the new tax regime must now declare this explicitly while filing their returns. This ensures better transparency in tax declarations.

4. Mention TDS section in the ITR form

Taxpayers must now mention the specific section under which Tax Deducted at Source (TDS) has been deducted. This change aims to improve accuracy in reporting TDS details.

5. New capital gains rules incorporated in ITR forms

The updated form includes revised rules for reporting capital gains, ensuring compliance with recent amendments in tax laws.

6. Separate reporting for capital gains from unlisted bonds and debentures

Taxpayers earning capital gains from unlisted bonds and debentures must now report these separately in the ITR form, ensuring greater clarity.

7. Reporting of buy-back proceeds as deemed dividends

Any proceeds from the buy-back of shares, treated as deemed dividends, must now be reported in the updated ITR-1 form.

8. Providing disability certificates for deductions under Sections 80DD and 80U

Taxpayers claiming deductions under Sections 80DD and 80U must now submit valid disability certificates while filing their returns.

9. Asset reporting applicable if total income exceeds Rs. 1 crore

Individuals with total income exceeding Rs. 1 crore must now report their assets in the ITR-1 form. This change ensures better monitoring of high-income taxpayers.

Before filing your ITR-1 form, ensure you have the following documents:

• PAN card and Aadhaar card.
• Form 16 from your employer.
• TDS certificates (Form 16A/16B/16C).
• Bank account details and interest certificates.
• Proof of deductions (e.g., LIC premium, PPF contributions).

Having these documents ready will make the filing process seamless and error-free.

The ITR-1 form is divided into several sections for organised reporting:

• Personal details: Includes name, PAN, Aadhaar, and contact information.
• Income details: Details of salary, house property, and other income sources.
• Deductions: Information on deductions claimed under various sections.
• TDS summary: Details of tax deducted at source by employers or banks.

This structure ensures that all necessary information is captured systematically.

Filing ITR-1 online is a straightforward process. Follow these steps:

1. Log in to the Income Tax e-filing portal using your PAN and password.
2. Select the ITR-1 form and choose the assessment year (AY 2025-26).
3. Fill in your personal, income, and deduction details.
4. Verify the pre-filled data and make necessary corrections.
5. Submit the form and e-verify your return.

The ITR-1 form includes the following key sections:

• Personal details: Name, PAN, Aadhaar, and address.
• Income details: Salary, pension, house property, and other income.
• Deductions: Investments and expenses eligible for tax deductions.
• TDS summary: Tax deducted by employers and other deductors.
• Bank details: Account details for refunds.

Each section is designed to ensure comprehensive reporting of income and taxes.

The ITR-1 form offers several benefits:

• Simplified process: Designed for individuals with straightforward income sources.
• Pre-filled data: Reduces manual entry and errors.
• Time-saving: Ideal for salaried taxpayers and pensioners.
• User-friendly: Easy to understand and file, even for first-time taxpayers.

These features make ITR-1 a preferred choice for millions of taxpayers in India.

While ITR-1 is suitable for simple income structures, ITR-2 is designed for individuals with more complex financial portfolios.

Understanding the updates to the ITR-1 form for AY 2025-26 is crucial for accurate and timely filing. These changes aim to simplify the process and ensure compliance with tax regulations. If you are eligible to file ITR-1, ensure you have all the required documents and follow the updated guidelines. Filing your returns accurately not only avoids penalties but also contributes to a transparent tax system.