ITR-1 Form (Sahaj) Explained for AY 2026-27: Your Complete FAQ
A record 3.52 crore taxpayers filed ITR-1 in FY 2025-26, making it the most-used income tax return form in India by a wide margin. If you’re a salaried employee, pensioner, or small investor who files your own return, ITR-1 is almost certainly your form. But AY 2026-27 brings meaningful updates. Two new rules expand who qualifies. Several new fields change what you must disclose. And one common portal mistake can invalidate your return entirely.
This FAQ covers the 12 most common questions about the ITR-1 form for AY 2026-27, grouped into four categories: eligibility, new changes, how to file, and common mistakes.
Key Takeaways
- ITR-1 now covers up to two house properties, letting many ITR-2 filers switch to the simpler form.
- LTCG from listed equity shares and equity mutual funds up to Rs.1.25 lakh can now be reported in ITR-1.
- Only a 12-digit Aadhaar number is accepted. Enrollment IDs are no longer valid.
- Deductions under 80C to 80U must be selected from a dropdown with the specific sub-section.
- The filing deadline for ITR-1 is July 31, 2026. File under Income Tax Act 1961, not the new Act 2025.
Category 1: Eligibility
Q1. What is ITR-1 (Sahaj) and who is it for?
ITR-1, also called Sahaj, is the simplest individual income tax return form in India. It’s designed for resident individuals whose income is straightforward: salary, pension, one or two house properties, savings interest, dividends, family pension, and modest LTCG from equity investments. Total income must not exceed Rs.50 lakh.
Who should file ITR-1 for AY 2026-27? You qualify if all of the following apply:
- You are a resident individual (not NRI or RNOR)
- Total income is up to Rs.50 lakh
- Income is from salary, pension, or both
- You have income from up to two house properties (new for AY 2026-27)
- Other source income: savings interest, FDs, dividends, family pension
- LTCG under Section 112A is up to Rs.1.25 lakh from listed equity or equity MFs (new for AY 2026-27)
- Agricultural income does not exceed Rs.5,000
Q2. Who is NOT eligible to file ITR-1 for AY 2026-27?
You cannot file ITR-1 if you’re a non-resident, a company director, or if you hold unlisted equity shares. Income over Rs.50 lakh, any business or professional income, more than two house properties, LTCG exceeding Rs.1.25 lakh, any STCG, foreign assets, crypto income, or TDS under Section 194N also disqualify you.
- Non-resident (NR) or Resident but Not Ordinarily Resident (RNOR)
- Director in any company
- Holder of unlisted equity shares at any point during FY 2025-26
- Total income exceeds Rs.50 lakh
- Any business or professional income of any kind
- More than two house properties
- LTCG exceeds Rs.1.25 lakh from listed equity or equity MFs
- Any short-term capital gains (STCG)
- Capital gains from assets other than listed equity or equity MFs
- Foreign assets, foreign bank accounts, or any foreign income
- TDS deducted under Section 194N (cash withdrawals)
- Virtual digital asset (crypto/NFT) income
- Brought-forward or carry-forward capital losses
Most common error: Taxpayers who earned even a small amount of STCG from selling mutual funds or stocks during FY 2025-26 must use ITR-2, not ITR-1. There is no minimum threshold for STCG disqualification.
Q3. Can I file ITR-1 if I switched from ITR-2 last year?
Yes. If you filed ITR-2 for AY 2025-26 only because you owned a second house property or had LTCG under Rs.1.25 lakh from listed equity, you can now switch back to ITR-1 for AY 2026-27. Both of those conditions are now covered under the expanded ITR-1 eligibility rules.
- Second house property only: Switch to ITR-1. Now covered.
- LTCG from equity/equity MFs under Rs.1.25 lakh only: Switch to ITR-1. Now covered.
- STCG from equity, property sales, or any capital gains from non-equity assets: Stay on ITR-2.
- Foreign assets, business income, directorship, crypto: Stay on ITR-2 or higher.
- Carry-forward capital losses from prior years: Stay on ITR-2 to preserve loss set-off.
Category 2: New Changes for AY 2026-27
Q4. Can I now report two house properties in ITR-1?
Yes. This is one of the most significant changes for AY 2026-27. ITR-1 now accommodates up to two house properties, up from one. If your total income is within Rs.50 lakh and you have no other disqualifying income, owning a second house no longer forces you onto ITR-2.
The revised form also includes a dedicated field for unrealised rent and requires tenant PAN, Aadhaar, or TAN disclosure for house property income.
Worked example: You earn Rs.10 lakh salary. Property 1: self-occupied in Delhi. Property 2: let-out in Jaipur, rent Rs.96,000/year. Both fit in ITR-1 with total income well under Rs.50 lakh.
Q5. Can I report capital gains (LTCG) in ITR-1 for AY 2026-27?
Yes, but with strict conditions. ITR-1 now accepts LTCG from listed equity shares and equity-oriented mutual funds under Section 112A, provided the total LTCG does not exceed Rs.1.25 lakh. Any LTCG above Rs.1.25 lakh, any STCG, or capital gains from any other asset class requires ITR-2.
What qualifies for LTCG reporting in ITR-1:
- Listed equity shares held for more than 12 months (Section 112A)
- Units of equity-oriented mutual funds held for more than 12 months (Section 112A)
Common trap: Even Rs.500 in STCG from equity disqualifies you from ITR-1 entirely. Check your broker’s annual tax P&L statement before selecting your form.
Q6. What other changes are there in ITR-1 for AY 2026-27?
Beyond the two-house-property and LTCG updates, ITR-1 for AY 2026-27 introduces six more changes:
- 12-digit Aadhaar only: Aadhaar enrollment IDs are no longer accepted.
- Enhanced TDS reporting: The TDS schedule now requires you to specify the deduction section (e.g., 192 for salary, 194A for interest).
- Deductions dropdown with sub-section: All deductions from 80C to 80U must be selected from a dropdown that requires the specific sub-section.
- Primary and secondary contacts: A secondary mobile number and email address can now be added.
- Tenant PAN/Aadhaar/TAN: If you have rental income, tenant identification details are now mandatory.
- Quarterly dividend breakdown: Dividend income must be reported quarter by quarter, not as an annual total.
- Income Tax Act 1961 only: Select “AY 2026-27 / Income Tax Act 1961” tab on the portal — not the new Act 2025.
Category 3: How to File
Q7. What documents do I need to file ITR-1?
Always required:
- PAN card
- 12-digit Aadhaar number (linked to PAN and mobile)
- Form 16 (Part A and Part B) from your employer
- Form 26AS and Annual Information Statement (AIS) from the income tax portal
- Pre-validated bank account details (account number + IFSC)
If applicable:
- Interest certificates from banks and post office
- Capital gains statement from your broker
- Rent receipts and tenant PAN/Aadhaar/TAN
- Quarterly dividend statements
- Proofs for deductions: 80C, 80D, 80G
Q8. How do I file ITR-1 online on the e-filing portal?
- Go to incometax.gov.in and log in with your PAN and password.
- Navigate to: e-File > Income Tax Returns > File Income Tax Return.
- Select Assessment Year: 2026-27 and filing mode: Online.
- Confirm you’re on the Income Tax Act 1961 tab — not the new Income Tax Act 2025 tab.
- Select ITR-1.
- Review pre-filled data sourced from your AIS, Form 26AS, Form 16, and broker reports.
- Complete the five main sections: Personal Info → Gross Total Income → Deductions and Taxes Paid → Tax Paid → Total Tax Liability.
- Select your tax regime. The New Tax Regime is the default for AY 2026-27.
- If tax is payable, generate a challan and pay before submitting.
- Preview your return, then submit.
- E-verify within 30 days using Aadhaar OTP, Net Banking, or DSC.
Don’t skip e-verification: An unverified return has no legal standing.
Q9. What is the deadline to file ITR-1 for AY 2026-27?
- Original return: July 31, 2026 — no penalty
- Belated return: August 1 to December 31, 2026 — late fee of Rs.5,000 (Rs.1,000 if income up to Rs.5 lakh)
- Revised return: Up to March 31, 2027 — free if filed before December 31, 2026
- Updated return (ITR-U): Up to 48 months from end of relevant AY with escalating additional tax
Category 4: Common Mistakes and Problems
Q10. What are the most common mistakes that make ITR-1 invalid?
- Any STCG reported in ITR-1: Even Rs.1 disqualifies you. Check your broker’s P&L statement.
- LTCG over Rs.1.25 lakh: The threshold is firm. Switch to ITR-2 if exceeded.
- Aadhaar enrollment ID used: Only 12-digit Aadhaar number is accepted.
- Interest income omitted: Savings account, FD, and post office interest must be reported.
- Wrong Act tab on portal: Select “Income Tax Act 1961” not “Income Tax Act 2025”.
- Missing deduction section in TDS schedule: Specific deduction section is now required.
- Lump-sum deduction entry under 80C: Exact sub-section selection is mandatory.
Q11. What happens if I file the wrong ITR form?
Filing the wrong ITR form can result in a defective return notice under Section 139(9), the return being treated as invalid, and demand notices for tax that wasn’t computed correctly. You have 15 days to file a correct return after such a notice. File a revised return using the correct form before December 31, 2026 if you spot the mistake early.
Q12. Should I choose the new tax regime or old tax regime in ITR-1?
The New Tax Regime is the default for AY 2026-27 and offers zero tax up to Rs.12 lakh (Rs.12.75 lakh for salaried employees). If your deductions under 80C, 80D, HRA, and home loan interest collectively exceed Rs.3.5-4 lakh, the Old Regime may save you more tax. Always compute both before deciding.
| Factor | New Tax Regime (Default) | Old Tax Regime |
|---|---|---|
| Zero-tax income limit (salaried) | Rs.12.75 lakh | Rs.5 lakh |
| Standard deduction | Rs.75,000 | Rs.75,000 |
| Section 80C deductions | Not available | Up to Rs.1.5 lakh |
| Section 80D (health insurance) | Not available | Up to Rs.50,000 |
| HRA exemption | Not available | Available |
| Home loan interest (Section 24b) | Not available | Up to Rs.2 lakh |
ITR-1 Filing Checklist for AY 2026-27
- Confirm you’re a resident individual with total income under Rs.50 lakh
- Verify you have no STCG, no business income, no foreign assets, no crypto income
- Check that LTCG from equity/equity MFs (if any) is under Rs.1.25 lakh
- Download Form 26AS and AIS from the income tax portal
- Collect Form 16 (Part A and Part B) from your employer
- Gather interest certificates from all banks and post office accounts
- Get quarterly dividend statement
- Collect capital gains statement from your broker (if applicable)
- Note tenant PAN/Aadhaar/TAN if you have rental income
- Collect 80G donation receipts with UPI/NEFT transaction reference numbers
- Confirm your 12-digit Aadhaar is linked to PAN and your registered mobile
- Verify your bank account is pre-validated on the e-filing portal
- Run a quick tax calculation under both regimes before selecting one
- Log in to incometax.gov.in and confirm “AY 2026-27 / Income Tax Act 1961” tab is selected
- E-verify within 30 days of submission via Aadhaar OTP
Further Guidance on ITR-1 Filing
For edge cases involving foreign income, crypto, property sales, business income, or income above Rs.50 lakh, ITR-1 is not the right form. Consult a Chartered Accountant for such situations. For general guidance on Indian tax planning, deductions, and investment decisions, browse the tax section on Tradeviser.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax rules change frequently. Consult a qualified Chartered Accountant or tax professional for advice specific to your situation. All figures and dates are based on information available as of May 1, 2026, and governed by Income Tax Act 1961.
CA Madhusmita Padal is a Practicing Chartered Accountant with firms based in Odisha and Chennai. She specializes in taxation, company law, and auditing. She is passionate about simplifying complex concepts and making knowledge accessible to all.
