ITR-1 Sahaj for AY 2026-27: Who Can File and the Step-by-Step Process

Income Tax Return Form 1 (ITR-1), popularly known as Sahaj, is the simplified tax return form designed for resident individuals earning income from straightforward sources such as salary, a single house property, and interest income. For Assessment Year (AY) 2026-27—which corresponds to the Financial Year (FY) 2025-26—the central government has further streamlined the tax structure under the default New Tax Regime. Understanding the specific ITR-1 Sahaj eligibility rules, threshold limits, and step-by-step filing mechanics is essential for salaried individuals to maintain compliance and optimize tax liabilities.

Key Takeaways for AY 2026-27 (FY 2025-26):

• Income Ceiling: ITR-1 Sahaj is restricted to resident individuals with a total income of up to ₹50 Lakhs.
• Tax-Free Threshold: Under the default New Tax Regime, salaried taxpayers pay zero net tax on a gross salary up to ₹12,75,000, thanks to an enhanced Standard Deduction of ₹75,000 and the Section 87A rebate for taxable income up to ₹12,00,000.
• Standard Deduction: ₹75,000 under the New Tax Regime; ₹50,000 under the Old Tax Regime.
• Capital Gains Exclusion: If you sold listed shares or equity mutual funds incurring short-term (Sec 111A) or long-term (Sec 112A) capital gains, you cannot use ITR-1 and must file ITR-2.
• Filing Timeline Note: The original due date for non-audit individual returns for AY 2026-27 was July 31, 2026. Returns filed after this date are classified as belated returns under Section 139(4) and incur late fee penalties under Section 234F.

Not sure ITR-1 is the right form for you? The ITR form selection guide compares all four forms against income type, capital gains and foreign assets.

ITR-1 Sahaj Eligibility Criteria and Income Limits

The Income Tax Department restricts the use of ITR-1 to ensure that complex financial profiles undergo more rigorous scrutiny under ITR-2, ITR-3, or ITR-4. Evaluating your ITR-1 income limit and qualifying income streams is the first step prior to filing.

Who Can File ITR-1 Sahaj?

You are eligible to file ITR-1 for AY 2026-27 if you meet all of the following conditions:

• Residential Status: You are an Individual who is an Ordinarily Resident in India. Non-Resident Indians (NRIs) and Resident Not Ordinarily Resident (RNOR) individuals are ineligible.
• Total Income Limit: Your total income across all eligible heads does not exceed ₹50,00,000 during FY 2025-26.
• Permitted Income Sources:
  • Income from Salary or Pension (under Section 15/17).
  • Income from One House Property (excluding cases where loss is brought forward from previous years).
  • Income from Other Sources (Interest on savings accounts, fixed deposits, family pension, income tax refund interest, or dividend income).
  • Agricultural Income up to a maximum of ₹5,000.

Who Cannot File ITR-1 Sahaj?

Taxpayers meeting any of the following parameters are strictly barred from filing ITR-1 and must select the appropriate alternative form (typically ITR-2 or ITR-3):

Tax Regimes and Slab Structure for AY 2026-27

For FY 2025-26 (AY 2026-27), the New Tax Regime serves as the default tax framework under Section 115BAC. Taxpayers retain the option to switch to the Old Tax Regime, provided the return is filed within the statutory timelines prescribed under Section 139(1).

Slab Comparison: New Tax Regime vs. Old Tax Regime

Understanding the Section 87A Rebate Mechanics

The headline feature of the New Tax Regime for AY 2026-27 is the Section 87A tax rebate. Under the default regime, an individual with a net taxable income up to ₹12,00,000 receives a full tax rebate up to ₹60,000, reducing the net tax payable to zero.

Mathematical Breakdown of Zero-Tax Threshold for Salaried Individuals:
Gross Salary: ₹12,75,000
Less: Standard Deduction u/s 16(ia): ₹75,000
Net Taxable Income: ₹12,00,000

Tax Computation:
• First ₹4,00,000 @ 0% = ₹0
• ₹4,00,001 to ₹8,00,000 (₹4,00,000 @ 5%) = ₹20,000
• ₹8,00,001 to ₹12,00,000 (₹4,00,000 @ 10%) = ₹40,000
Total Gross Tax = ₹60,000
Less: Section 87A Rebate = -₹60,000
Net Tax Liability = ₹0 (Plus 4% Health & Education Cess = ₹0)

In contrast, under the Old Tax Regime, the Section 87A rebate is capped at ₹12,500, granting zero tax only up to a taxable income of ₹5,00,000 (after standard deduction of ₹50,000 and Chapter VI-A deductions such as 80C and 80D).

Comparative Calculation Example: Old vs. New Regime

Consider Mr. Rajesh, a salaried professional aged 38, earning a gross salary of ₹14,00,000 with ₹30,000 interest from savings deposits during FY 2025-26. Under the Old Regime, he claims ₹1,50,000 u/s 80C, ₹25,000 u/s 80D, and ₹10,000 u/s 80TTA.

In this scenario, filing under the default New Tax Regime provides Mr. Rajesh with a net tax saving of ₹91,260 despite losing deductions under Sections 80C, 80D, and 80TTA.

How to File ITR-1 Online: Step-by-Step Guide

Completing your ITR-1 for salaried employees via the official Income Tax e-Filing Portal (incometax.gov.in) involves a structured process. Ensure you have your Form 16, Form 26AS, and Annual Information Statement (AIS) ready.

Step 1: Document Reconciliation

Cross-examine your Form 16 issued by your employer with your AIS (Annual Information Statement) and TIS (Taxpayer Information Summary). Verify that all TDS deducted under Section 192 (salary) and Section 194A (bank interest) matches Form 26AS.

Step 2: Portal Login & Accessing Return Form

• Log in to incometax.gov.in using your PAN/Aadhaar and password.
• Navigate to e-File > Income Tax Returns > File Income Tax Return.
• Select Assessment Year as AY 2026-27 and mode of filing as Online.
• Choose your status as Individual and select ITR-1 (Sahaj).

Step 3: Verification of Pre-Filled Data

The e-filing engine pre-populates data across five primary schedules:

• Personal Information: Confirm contact details, Aadhaar number, and select filing section (e.g., Section 139(1) for timely filing or Section 139(4) for belated filing). Confirm your regime choice.
• Gross Total Income: Verify salary income from Form 16. Enter breakdown of interest income, dividend income, and single house property details (if applicable).
• Total Deductions: If opting for the Old Regime, manually input eligible claims under Section 80C (up to ₹1,50,000), Section 80D (health insurance up to ₹25,000 for self/family and ₹50,000 for senior citizen parents), and Section 80TTA. If staying in the default New Regime, verify the standard deduction of ₹75,000.
• Tax Paid: Review pre-filled entries for TDS, TCS, Advance Tax, and Self-Assessment Tax payments.
• Tax Liability Computation: System automatically calculates tax payable or refund due based on applicable regime rates and Section 87A rebate applicability.

Step 4: Submission and E-Verification

Preview your return summary, confirm bank account details for refund processing, and click Proceed to Verification. Verification is mandatory within 30 days of submission using Aadhaar OTP, Net Banking, or EVC via ATM.

Consequences of Filing After the Due Date (Section 139(4) & 234F)

For AY 2026-27, the due date for non-audit individual filings under Section 139(1) was 31 July 2026. Taxpayers filing after July 31 must file a Belated Return under Section 139(4). The consequences of belated filing include:

• Late Fee Penalty (Section 234F): A fee of ₹5,000 is levied. However, if your total taxable income is up to ₹5,00,000, the fee is capped at ₹1,000.
• Penal Interest (Section 234A): Interest @ 1% per month or part of a month is charged on the net unpaid tax liability calculated from August 1, 2026, until the date of actual filing.
• Loss of Regime Switch Option: Filing a belated return under Section 139(4) restricts your ability to opt for the Old Tax Regime if you failed to submit Form 10-IEA/election within the original deadline. Tax calculation defaults strictly to Section 115BAC New Regime.
• Belated Filing Deadline: The final cutoff to submit a belated or revised return for AY 2026-27 is 31 December 2026.

Common Errors to Avoid When Filing ITR-1

To prevent tax notices under Section 143(1) for prima facie arithmetical errors or mismatch of income, avoid these frequent mistakes:

• Ignoring Savings Account Interest: Taxpayers often omit interest earned on savings bank deposits or fixed deposit accruals. All interest income must be declared under "Income from Other Sources."
• Wrong Form Selection Due to Capital Gains: Selling equity shares or mutual funds, even with long-term capital gains (LTCG u/s 112A taxed at 12.5% above ₹1.25 Lakhs) or short-term capital gains (STCG u/s 111A taxed at 20%), automatically disqualifies you from ITR-1. You must use ITR-2.
• Inconsistency with AIS/TIS: Filing numbers that differ from the AIS ledger causes system-generated automated adjustments under Section 143(1)(a).
• Failure to E-Verify: An ITR submitted without e-verification within 30 days is treated as invalid (unfiled), which can trigger late filing penalties.

Legislative Clarification: Income Tax Act, 2025

The Income Tax Act, 2025, which replaces the legacy Income-tax Act, 1961, takes statutory effect from 1 April 2026 (FY 2026-27 / AY 2027-28 onwards). Therefore, returns filed for Assessment Year 2026-27 (covering the earnings of FY 2025-26) continue to be governed strictly by the provisions, schedules, and legal sections of the Income-tax Act, 1961, as amended by the applicable Finance Acts.