Jun 05 2026
11 min read
ITR-1, also known as Sahaj, is the simplest and most commonly used income tax return form in India. It is designed for individuals with straightforward income profiles and is the easiest form to file both online and offline.
For AY 2026-27, ITR-1 can be used by a resident individual whose total income does not exceed ?50 lakh during the financial year FY 2025-26, and whose income comes from specific permitted sources only.
The permitted income sources are salary or pension income, income from up to two house properties, income from other sources such as interest from savings accounts, fixed deposits, family pension, and agricultural income up to ?5,000.
There is also a significant new addition for AY 2026-27. Taxpayers can now report long-term capital gains under Section 112A from listed equity shares and equity-oriented mutual funds in ITR-1 itself, provided the total LTCG does not exceed ?1.25 lakh and there are no brought-forward losses or losses to be carried forward under the capital gains head. Previously, any capital gains required filing ITR-2, but this change allows more taxpayers with very small LTCG to use the simpler ITR-1 form.
Another important new change is regarding house properties. Until last year, ITR-1 could only be used by taxpayers with income from one house property. From AY 2026-27, taxpayers can report income or loss from up to two house properties directly in ITR-1 itself. This can benefit many salaried individuals who own two residential properties. For example, someone with one self-occupied house and one rented property may now use the simpler ITR-1 form instead of shifting to ITR-2, provided all other ITR-1 eligibility conditions are met.
Even if your total income is below ?50 lakh, you cannot use ITR-1 in the following situations. ITR-1 cannot be used if you have capital gains beyond the ?1.25 lakh LTCG limit, or any short-term capital gains at all, income from more than two house properties, foreign assets or foreign income, or other ineligible income types, as these cannot be reported in ITR-1.
You also cannot file ITR-1 if you are a Non-Resident Indian or a Resident but Not Ordinarily Resident. ITR-1 cannot be filed by HUFs. Additionally, if you are a director in any company, if you have invested in unlisted equity shares at any point during the year, if you have income from business or profession, or if your agricultural income exceeds ?5,000, you are ineligible to use ITR-1.
There is also an important update regarding Aadhaar. Only a verified Aadhaar number is now accepted for AY 2026-27, and Aadhaar enrolment IDs are no longer valid.
The due date to file ITR-1 for FY 2025-26 (AY 2026-27) is 31st July 2026 for individuals not requiring tax audit. If you miss the due date, you can still file a belated return up to 31st December 2026, with additional interest and late fees under Section 234F.
ITR-1, also known as Sahaj, is the most commonly used return form in India. Because it appears simple and straightforward, many taxpayers file it carelessly, assuming that small errors will not matter. However, for AY 2026-27, the Income Tax Department has significantly tightened its data matching and scrutiny systems. Every piece of information you enter in your ITR-1 is now cross-verified against your AIS, Form 26AS, TDS statements, and bank records automatically. Even a minor mistake can attract a notice, delay your refund, or result in an additional tax demand. Here are all the general mistakes that assessees commonly commit while filing ITR-1 for AY 2026-27.
This is the single most common and most damaging mistake. Many assessees continue to file ITR-1 year after year out of habit, without checking whether they are still eligible to do so. For AY 2026-27, you cannot file ITR-1 if you have short-term capital gains from stocks or mutual funds, if your LTCG under Section 112A exceeds ?1.25 lakh, if you have income from more than two house properties, if you are a director in any company, if you hold unlisted equity shares, if you are an NRI or RNOR, or if you have any foreign assets or foreign income. Many salaried employees who received ESOPs or RSUs from their employer, or who sold even a small amount of property during the year, unknowingly continue filing ITR-1 and end up filing a defective return which attracts a notice from the department.
This is perhaps the most widespread mistake among salaried assessees. Most people believe that since TDS has already been deducted on their fixed deposit interest, they do not need to report it separately in their ITR-1. This is completely wrong. All interest income from savings accounts, fixed deposits, recurring deposits, post office deposits, and even income tax refund interest must be reported under the head "Income from Other Sources" in your ITR-1. The bank reports this information directly to the Income Tax Department through AIS, and if you do not declare it, the department will detect the mismatch and send you a notice.
This mistake sounds too simple to make, but it is extremely common especially among first-time filers and those filing in a hurry. For income earned in FY 2025-26, the correct Assessment Year to select is AY 2026-27. Many assessees accidentally select AY 2025-26, which means their return gets filed for the wrong financial year entirely. This creates a situation where the current year's return is missing and the previous year shows a duplicate, leading to significant complications that require filing a revised return and dealing with unnecessary department correspondence.
A large number of assessees simply pick up their Form 16 from their employer, enter the figures directly into ITR-1, and submit without verifying anything else. This is a serious mistake. Your Form 16 only reflects what your employer has reported. Your AIS contains a much wider picture including interest income, dividend income, mutual fund transactions, property purchases, and rent received. If there is any mismatch between what you report in your ITR-1 and what appears in your AIS or Form 26AS, the Income Tax Department's system will automatically flag it and issue a notice. Always reconcile all three documents before filing.
For AY 2026-27, the new tax regime is the default regime for all taxpayers. Under the new regime, most deductions under Chapter VI-A are not available. However, many assessees out of habit continue to claim deductions like Section 80C for LIC and PPF investments, Section 80D for health insurance premiums, and HRA exemption, even though they are filing under the new tax regime. This results in incorrect computation of tax liability and may attract a demand notice from the department asking for the differential tax amount along with interest.
This is the opposite of the previous mistake. Many assessees who have significant investments in PPF, ELSS, LIC, and who pay health insurance premiums and home loan interest, simply go ahead with the default new tax regime without doing a proper comparison. In many cases, switching to the old tax regime and claiming all eligible deductions would have resulted in significantly lower tax liability. Not doing this comparison before filing is a financial mistake that costs assessees money they did not need to pay.
Many assessees do not verify whether all the TDS that has been deducted from their salary, bank interest, and other income is properly reflecting in their Form 26AS. If a deductor has deducted TDS but not deposited it with the government or has filed a TDS return with an error in your PAN, it will not appear in your Form 26AS, and you will not be able to claim credit for it in your ITR-1. Filing without verifying this can result in you paying tax that has already been deducted and then going through a long process of rectification later.
This is a simple but painful mistake. Many assessees enter their bank account number or IFSC code incorrectly in their ITR-1. If the Income Tax Department processes a tax refund for you and your bank details are wrong, the refund will fail to credit and you will have to go through a lengthy process of raising a refund reissue request on the income tax portal and waiting for it to be processed again. Always double-check your bank account number digit by digit and verify the IFSC code before submitting your return.
For AY 2026-27, it is mandatory to disclose all savings and current bank accounts that you held at any point during the financial year in your ITR-1. Many assessees only mention their primary salary account and forget to mention old accounts, joint accounts, or accounts opened briefly during the year. While dormant accounts that have not been operational for more than three years need not be reported, all other active accounts must be disclosed. Not doing so can lead to a defective return notice.
This is a new and very relevant mistake for AY 2026-27 because ITR-1 now allows reporting of up to two house properties for the first time. Many assessees who own two properties are now filing ITR-1 for the first time and are not familiar with how to correctly report the annual value, municipal taxes paid, standard deduction of 30%, and home loan interest under Section 24(b). Errors in this section can lead to incorrect computation of income from house property and result in either excess tax payment or a demand notice from the department.
For AY 2026-27, ITR-1 allows reporting of Long-Term Capital Gains from listed equity shares and equity-oriented mutual funds under Section 112A, provided the gains do not exceed ?1.25 lakh and there are no carried-forward capital losses. Many assessees make the mistake of reporting LTCG in ITR-1 even when it exceeds ?1.25 lakh, or when they have short-term capital gains alongside LTCG, which makes them ineligible to use ITR-1 for this purpose at all. In such cases, the correct form to use is ITR-2.
This is a specific and new compliance requirement for AY 2026-27. In previous years, some taxpayers used their 28-digit Aadhaar Enrolment ID as a substitute when their Aadhaar was not yet generated or linked. This is no longer accepted. For AY 2026-27, only a valid 12-digit Aadhaar number that is verified and linked to your PAN is accepted. Using an enrolment ID will result in the return being rejected at the validation stage itself.
Many assessees who hold mutual funds or shares receive dividend income during the year but forget to report it in their ITR-1 under "Income from Other Sources." Since dividends are now taxable in the hands of the recipient and companies report dividend payments directly to the Income Tax Department, this income clearly appears in your AIS. Not reporting it is a clear case of income under-reporting and can result in notices and penalties.
A very large number of assessees wait until the last few days before the 31st July 2026 deadline to file their ITR-1. This results in rushing through the filing process, not properly verifying pre-filled data, entering incorrect figures under pressure, and sometimes even facing technical issues on the income tax portal due to heavy traffic. Filing in a hurry is the root cause of many of the mistakes mentioned above. Always file early, ideally after your Form 16 is received in June, so you have enough time to verify everything carefully.
This is the final and most overlooked mistake. Filing your ITR-1 and submitting it on the portal does not complete the process. Your return is only considered valid after it is e-verified. If you do not e-verify within 30 days of filing, your return will be treated as if it was never filed at all, which means you will face all the consequences of a non-filer including late fees, interest, and possible notices. E-verification can be done instantly through your Aadhaar OTP, net banking, or by sending a signed ITR-V to the CPC office in Bengaluru.
ITR-1 may be the simplest return form available, but simple does not mean careless. For AY 2026-27, the Income Tax Department has access to more data about you than ever before, and its systems are smarter and more automated than in previous years. The best approach is to gather all your documents first, cross-check your AIS and Form 26AS carefully, choose your tax regime wisely, verify every figure you enter, and file well before the deadline. When in doubt, always consult a qualified tax professional to avoid costly mistakes.
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