Who is Eligible to File ITR-1 (Sahaj) in India?

Filing Income Tax Returns (ITR) is an essential responsibility for every taxpayer in India. Among the various ITR forms available, ITR-1 (Sahaj) is the simplest and most commonly used form. It is specifically designed for individual taxpayers with straightforward income sources. In this blog post, we will explore who is eligible to file ITR-1, the income sources it covers, and the conditions that disqualify individuals from using this form.

ITR-1 (Sahaj) is an income tax return form for resident individuals who have income primarily from salaries, one house property, and other sources like interest. The term “Sahaj” means simple, indicating that this form is user-friendly for individuals with uncomplicated financial situations.

Who is Eligible to File ITR-1?

You can file ITR-1 if you meet the following criteria:

1. Residential Status:
   • You must be a resident individual in India. Non-residents and not ordinarily residents are not eligible to use this form.
2. Income Limit:
   • Your total income should not exceed ₹50 lakh during the financial year.
3. Sources of Income:
   You can use ITR-1 if your income is from the following sources:
   • Salary or Pension: Income received as salary or pension.
   • One House Property: Income from one house property (excluding cases where losses are carried forward from previous years).
   • Other Sources: Income from interest (savings accounts, fixed deposits, etc.), family pension, and other non-business income.
   • Agricultural Income: Up to ₹5,000.
4. Clubbed Income:
   • Income of a spouse or minor child can be clubbed if it falls under the above categories.

Who is Not Eligible to File ITR-1?

You cannot file ITR-1 if:

1. Income Exceeds ₹50 Lakh:
   • If your total income surpasses ₹50 lakh, you must choose another ITR form.
2. Multiple House Properties:
   • Income from more than one house property disqualifies you from using ITR-1.
3. Capital Gains:
   • If you have earned any capital gains (short-term or long-term), you cannot use this form.
4. Business or Professional Income:
   • Income from a business or profession, including freelancing, disqualifies you.
5. Foreign Income or Assets:
   • If you have foreign income, assets, or signing authority in foreign accounts, you must opt for a different ITR form.
6. Agricultural Income Above ₹5,000:
   • If agricultural income exceeds ₹5,000, ITR-1 is not applicable.
7. Director in a Company or Unlisted Shares:
   • Individuals who are directors in a company or own shares in unlisted companies cannot use ITR-1.

Key Changes for AY 2025-26

For the Assessment Year 2025-26, the following updates are applicable:

• Standard Deduction: The standard deduction for salaried individuals has been enhanced.
• New Tax Regime: Individuals opting for the new tax regime with lower tax rates and no deductions cannot use ITR-1.

How to File ITR-1?

1. Online Portal:
   • Log in to the Income Tax e-Filing portal and choose ITR-1.
2. Pre-filled Data:
   • Use pre-filled data available on the portal for accuracy.
3. Verification:
   • E-verify the return using Aadhaar OTP, Net Banking, or Digital Signature.

ITR-1 (Sahaj) simplifies the tax filing process for salaried individuals with straightforward income sources. However, understanding the eligibility criteria is crucial to avoid mistakes. If your income sources are complex, consider consulting a tax professional or opting for a different ITR form.

Filing your ITR accurately and on time not only ensures compliance with tax laws but also brings financial credibility. Make sure to assess your income sources thoroughly before choosing ITR-1.

ITR – 1 – This form will be applicable, If you meet the following conditions

• (a) You qualify as ‘Resident and Ordinarily Resident’ in India;
• (b) You have one or more of the following source of income;
  • (i) You have salary income
  • (ii) You have interest income from bank / post office / cooperative society/ enhanced compensation / income tax refund;
  • (iii) You have Dividend Income
  • (iv) You have family pension;
  • (v) You do not own any house property or 1 house property:
  • (vi) You do not have any income chargeable at special rate
  • (vii) You have income from retirement benefit account maintained in a notified country under section 89A
  • (viii) You have income from retirement benefit account maintained in a country other than notified country section 89A
• (c) Your total income does not exceed Rs. 50 Lakh;
• (d) You are not a director in a company in India or outside India;
• (e) You do not own any equity shares in a company which is not listed in India or outside India;
• (f) You do not have any brought forward loss or loss to be carried forward;
• (g) You do not want to claim any relief under section 90 or section 91;
• (h) You do not have any income or asset outside India
• (i) You are not governed by Portuguese Civil Code
• (j) You are not a partner in a partnership firm
• (k) You do not have agricultural income more than Rs. 5,000
• (l) You do not want to claim any deduction under section 57, other than deduction w.r.t family pension section 57(iia)
• (m) You do not have Tax deducted at source under section 194N
• (n) You do not have deferred tax on ESOPs received from eligible start-ups.