A Simplified Guide to Filing ITR-1 (Sahaj) for FY 2024-25 (AY 2025-26)

Key Updates to ITR-1 for AY 2025-26

The new ITR-1 form includes several changes that you should be aware of, especially if you’re opting for the old tax regime to claim various deductions.

1. Expanded Eligibility for Filing ITR-1

In a significant change, ITR-1 is now available to a wider range of taxpayers. Previously, any capital gains disqualified you from using this form. Now, if your only capital gains are long-term capital gains (LTCG) up to ₹1.25 lakh from the sale of listed equity shares or equity-oriented mutual funds under Section 112A, you can still file ITR-1. This is great news for small-scale investors.

• Important Caveat: This eligibility is valid only if you have no carried forward or brought forward capital losses. If your LTCG exceeds ₹1.25 lakh or if you have other types of capital gains, you will still need to file using ITR-2 or another appropriate form.

2. Enhanced Disclosure Requirements for Deductions (Old Tax Regime)

To combat false claims and ensure accuracy, the Income Tax Department now requires more detailed information for certain deductions if you are filing under the old tax regime. You should have all supporting documents ready to avoid any issues. Here are the new disclosure requirements:

• House Rent Allowance (HRA): To claim HRA exemption, you must provide comprehensive details, including your place of work, actual HRA received, rent paid, basic salary and Dearness Allowance, and whether your city is a metro or non-metro. If your annual rent exceeds ₹1 lakh, you must also provide the landlord’s name and PAN.
• Section 80C Investments: For common investments like PPF, ELSS, or life insurance, you now need to disclose the nature of the investment, the amount, and the policy number or document identification number.
• Health Insurance (Section 80D): You must provide the name of the insurance company and the policy number to claim this deduction.
• Interest on Loans (Sections 80E, 80EE, 80EEA, 80EEB): For deductions related to education, home, or electric vehicle loans, you will need to provide detailed information such as the lender’s name and bank, loan account number, date of loan sanction, total loan amount, and the outstanding balance as of March 31.
• Medical Treatment for Specified Diseases (Section 80DDB): When claiming this deduction, you must now specifically mention the name of the disease for which treatment was received.
• Rent Paid (Section 80GG): If you are claiming a deduction for rent paid without receiving HRA, it is now mandatory to file a declaration in Form No. 10BA along with your return.

3. TDS Section Mention is Now Compulsory

Taxpayers are now required to specify the section under which TDS (Tax Deducted at Source) was deducted for their various income sources (e.g., Section 192 for salary or Section 194A for interest). This helps the system cross-verify TDS credits with your Form 26AS and Annual Information Statement (AIS) to ensure accuracy.

4. Aadhaar Enrollment ID No Longer Accepted

For AY 2025-26, the option to use an Aadhaar Enrollment ID has been removed from all ITR forms. You must provide a valid Aadhaar number to file your return. If your Aadhaar and PAN are not linked, you will not be able to proceed with your filing.

5. Extended Due Date for Filing ITR

For non-audit taxpayers, the deadline to file ITR for FY 2024-25 (AY 2025-26) has been extended to September 15, 2025, from the original date of July 31, 2025. This extension provides additional time to comply with the new requirements.

Step-by-Step Guide to E-Filing ITR-1

1. Log In: Go to the official Income Tax e-Filing Portal and log in using your PAN as the user ID.
2. Select Filing Options: Navigate to ‘e-File’ > ‘Income Tax Returns’ > ‘File Income Tax Return’. Choose the Assessment Year as 2025-26 and the filing mode as ‘Online’.
3. Choose ITR Form: Select ‘Individual’ and then ‘ITR-1’ (Sahaj).
4. Prefill and Verify: The portal will pre-fill a lot of your data from sources like Form 16, Form 26AS, and AIS. It is crucial to carefully review and verify this information against your own records.
5. Fill in Details: Enter all your income details, deductions, and tax payments. Be extra careful with the new enhanced disclosure requirements for deductions under the old tax regime.
6. Calculate and Pay Tax: The system will automatically calculate your tax liability. If you have any tax dues, you must pay them before you can submit the return.
7. E-Verify: The final step is to e-verify your return. The easiest way to do this is with an Aadhaar OTP. Your filing is not complete until you have e-verified it.

FAQs

Q1: Can I still file ITR-1 if I have income from a business or profession?

No, ITR-1 is specifically for salaried individuals, pensioners, and those with income from one house property or other sources up to ₹50 lakh. Business or professional income requires you to file a different form, such as ITR-3 or ITR-4.

Q2: I forgot to submit my investment proofs to my employer. Can I still claim the deductions?

Yes, you can still claim eligible deductions when filing your ITR directly. However, with the new, stricter disclosure rules, you must have all the supporting documents ready in case they are requested by the tax authorities.

Q3: What if I miss the September 15, 2025, deadline?

If you miss the due date, you can still file a belated return by December 31, 2025, but you will be liable for a late filing fee of up to ₹5,000.

Q4: Is the new tax regime the default option?

For AY 2025-26, the new tax regime remains the default. If you wish to claim deductions and exemptions under the old regime, you must specifically opt for it while filing your return.

Conclusion

The Income Tax Department’s changes to ITR-1 for AY 2025-26 are a clear step toward enhancing transparency and accuracy in tax reporting. The key takeaways for taxpayers are to be diligent with documentation, carefully verify pre-filled data, and understand the expanded eligibility criteria, particularly regarding capital gains.

Filingg.com offers expert services to ensure your business thrives. For more details, contact 7791910007 or info@filingg.com today!