ITR-1 (Sahaj) AY 2026-27: New Changes, Who Can File, Last Date & How to File

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ITR-1 (Sahaj) AY 2026-27: New Changes, Who Can File, Last Date & How to File

Filing your income tax return does not have to feel like climbing a mountain. For millions of salaried employees, pensioners, and small investors across India, Form ITR-1 (Sahaj) remains the simplest and most trusted route to stay compliant with the Income Tax Department. But Assessment Year 2026-27 is not just another routine filing season. This year brings meaningful changes that expand who can use this form, introduces new reporting fields, and sits at a unique legal crossroads because the Income Tax Act, 2025 came into force on April 1, 2026, even though your current return still falls under the old Income Tax Act, 1961.
If you are wondering whether you qualify for ITR-1 this year, what the new rules are, when the deadline falls, and how to file without triggering a notice, this guide is written for you. We will walk through every detail in plain, simple language, using bullets to keep things clear and actionable.

What Is ITR-1 (Sahaj) and Why It Matters

ITR-1 (Sahaj) is the income tax return form designed specifically for resident individuals with straightforward income profiles. The word "Sahaj" literally means simple, and the form lives up to its name. It is the most widely used ITR form in India because it avoids the complex schedules that business owners, stock traders, and foreign asset holders must deal with.
For AY 2026-27 (covering income earned in Financial Year 2025-26), the Income Tax Department has made the form even more accessible. The Central Board of Direct Taxes (CBDT) notified the updated forms well ahead of the deadline, and the e-filing portal is already accepting submissions. The key thing to remember is that even though the new Income Tax Act, 2025 is now alive, your return for FY 2025-26 is still governed entirely by the old Income Tax Act, 1961. This means all the deductions, exemptions, and tax regime rules you are familiar with still apply exactly as before. Do not let news about the new Act confuse your current filing strategy.

Who Can File ITR-1 (Sahaj) for AY 2026-27

You can use ITR-1 only if you meet every single condition listed below. Missing even one condition means you must switch to ITR-2, ITR-3, or ITR-4, depending on your income mix.
  • You must be a resident individual (Ordinarily Resident). Non-resident Indians (NRIs), Resident but Not Ordinarily Resident (RNOR), and Hindu Undivided Families (HUFs) cannot use this form.
  • Your total income must not exceed ₹50 lakh during FY 2025-26. This is the absolute ceiling.
  • Your income sources must be limited to:
    • Salary or pension
    • Income from up to two house properties (this is a major expansion from previous years)
    • Other sources such as interest from savings accounts, fixed deposits, dividends, and family pension
    • Long-term capital gains under Section 112A up to ₹1.25 lakh (from listed equity shares and equity-oriented mutual funds held for more than 12 months)
    • Agricultural income up to ₹5,000
  • You must not have any brought-forward losses or losses to be carried forward under any head of income.
  • You must not be a director in any company, listed or unlisted.
  • You must not hold unlisted equity shares at any time during the financial year.
  • You must not have foreign assets, foreign income, or signing authority in any foreign account.
  • You must not have business or professional income, including freelance work, consulting, or gig economy side income.
  • You must not have deferred tax on ESOPs from an eligible startup.
  • You must not have TDS deducted under Section 194N (cash withdrawals above ₹1 crore).
  • You must not be claiming relief under Sections 90, 90A, or 91 (DTAA relief on foreign tax).
If your entire financial life fits inside these boundaries, ITR-1 is your form. The portal will pre-fill most of your data from employer filings, bank submissions, and the Annual Information Statement (AIS), making the process fast and largely automated.

Who Cannot File ITR-1 (Sahaj) Even If You Earn a Salary

Many taxpayers mistakenly believe that earning a salary automatically qualifies them for ITR-1. That is not true. The Income Tax Department has strict disqualification rules, and crossing any one of them will result in a defective return notice under Section 139(9) if you try to file the wrong form.
  • Total income above ₹50 lakh — even by one rupee — pushes you to ITR-2.
  • More than two house properties — if you own three or more, you cannot use ITR-1.
  • Any short-term capital gains (STCG) — even a single equity trade with ₹500 profit disqualifies you.
  • Long-term capital gains beyond Section 112A — gains from debt mutual funds, real estate, gold, or listed bonds require ITR-2.
  • Section 112A LTCG exceeding ₹1.25 lakh — the basic exemption limit is ₹1.25 lakh; anything above forces a form switch.
  • Crypto or Virtual Digital Assets (VDA) — taxed under Section 115BBH, these require ITR-2 or ITR-3.
  • Business income — including Futures & Options (F&O) trading, intraday trading, freelance writing, consulting, or any side gig.
  • Foreign assets or income — a single US stock holding through a platform like Vested or INDmoney, or a foreign bank account, disqualifies you.
  • Agricultural income above ₹5,000 — small farm income is allowed, but anything above that threshold is not.
  • Brought-forward losses — if you have losses from previous years to carry forward, you cannot file ITR-1.
The most common trap for salaried filers is the capital gains rule. If you sold an ELSS mutual fund after three years and made a ₹40,000 gain, that is fine within ITR-1. But if you also sold a few shares within 12 months and made a ₹2,000 short-term gain, you are disqualified. Similarly, if you received ESOPs from an unlisted startup and deferred the tax, you must file ITR-2.

Major New Changes in ITR-1 for AY 2026-27

This year brings three significant updates that make ITR-1 more useful for a wider group of taxpayers. The CBDT issued Notification 45/2026 to expand the form's scope, and these changes are already live on the e-filing portal.

Two House Properties Now Allowed

Until last year, ITR-1 capped you at one house property. If you owned a second flat — even a vacant inherited home, a parents' apartment, or a small rental unit — you were automatically pushed into the more complex ITR-2.
From AY 2026-27, you can report income from up to two house properties in ITR-1. This means:
  • One property can be self-occupied (notional rent is nil) and the other let-out.
  • Both can be self-occupied.
  • Both can be let-out.
You must calculate income or loss separately for each property, including municipal taxes paid and home loan interest under Section 24(b). The combined income from both properties flows into the "Income from House Property" head, and the total must still keep you within the ₹50 lakh overall limit. This single change is expected to bring an estimated 8 to 12 lakh additional salaried filers back into ITR-1 who were previously stuck with ITR-2.

LTCG Under Section 112A Up to ₹1.25 Lakh

The second big relief targets retail equity investors. Section 112A covers long-term gains on listed equity shares and equity-oriented mutual funds, and it offers a basic exemption of ₹1.25 lakh per financial year. For AY 2026-27, you can now report this LTCG directly in ITR-1, provided you strictly meet these conditions:
  • You have no short-term capital gains from any source.
  • You have no other long-term capital gains (debt funds, real estate, gold, etc.).
  • You have no brought-forward losses or carry-forward losses.
  • You are not offsetting this LTCG against any other head.
If even one of these conditions fails — for example, you have a ₹15,000 STCG from a quick stock trade alongside your ₹40,000 Section 112A gain — you must file ITR-2.

New Field for Unrealized Rent

A new, specific field for "rent which cannot be realized" has been added to the house property schedule. This helps landlords who have tenants who defaulted or vacated without paying. You can now report this clearly without manual workarounds.

Foreign Asset Reporting Relaxed

Requirements for reporting foreign retirement benefits have been removed from ITR-1, reducing confusion for taxpayers who may have had small foreign pension exposures.

Last Date to File ITR-1 for AY 2026-27

Mark your calendar carefully. The deadlines for AY 2026-27 are structured and strictly enforced by the Income Tax Department.
  • Original Due Date for ITR-1 (Sahaj): 31st July 2026 for individuals not requiring tax audit.
  • Belated Return Deadline: 31st December 2026 under Section 139(4). You can still file after missing the July deadline, but late fees and interest will apply.
  • Revised Return Deadline: 31st March 2027 under Section 139(5). This is a major extension from previous years, where the revised return deadline was typically 31st December. You now have until the end of the assessment year to correct errors in your original filing.
  • Updated Return (ITR-U) Window: Up to 31st March 2031 (48 months from the end of the assessment year). This allows you to declare missed income even after the belated window closes, though additional tax and fees apply.
If you are a salaried employee or pensioner with no business income, your only relevant date is 31st July 2026. Missing this date triggers automatic late fees under Section 234F and potential interest under Section 234A if you have unpaid tax.

Penalties and Late Fees for Missing the Deadline

The Income Tax Department does not negotiate on deadlines. If you file after 31st July 2026, the following charges apply automatically.

Section 234F — Late Filing Fee

This is a fixed, statutory fee that the e-filing portal calculates and adds to your tax liability the moment you file late. It is not discretionary and cannot be waived by the Assessing Officer in most cases.
  • Total income up to ₹5 lakh: Late fee of ₹1,000
  • Total income above ₹5 lakh: Late fee of ₹5,000
  • Total income below basic exemption limit: No late fee
The ₹5,000 cap is the maximum, even if you file on 31st December — five months late. The fee does not scale with the delay. However, the real damage often comes from other sections stacking on top.

Section 234A — Interest on Unpaid Tax

If you have tax due that was not paid by the original deadline, interest runs at 1% per month (or part of a month) from 31st July 2026 until the date you actually file. This is calculated on the unpaid tax balance, not on the late fee.

Section 234B and 234C — Interest on Advance Tax Shortfall

If you were supposed to pay advance tax during the year and fell short of 90% of your total liability, these sections add further interest at 1% per month.

Hidden Costs Beyond the ₹5,000 Fee

Late filing costs more than just money. It costs you financial flexibility:
  • Loss of carry-forward: Business losses, capital losses, and speculation losses cannot be carried forward in a belated return (except house property loss). A ₹10 lakh capital loss today could mean ₹2.5 lakh+ in lost tax savings over future years.
  • Refund delays: Belated refunds take longer to process, and the Centralized Processing Centre (CPC) often flags them for additional verification.
  • No interest on refund for the delay period: Section 244A interest on refunds accrues only from the date of belated filing, not from April 1 of the assessment year.
  • Increased scrutiny risk: Belated returns statistically attract more CPC adjustments and scrutiny notices.
  • Tax regime lock-in: If you miss the deadline and want to opt for the old tax regime, you may be defaulted to the new regime, losing your HRA, 80C, and other deductions.

Documents You Need Before You Start Filing

ITR-1 is largely pre-filled, but you must have source documents ready to verify the data and claim deductions. The portal pulls data from your employer, banks, and third-party sources, but errors happen.
  • Form 16 from your employer (for FY 2025-26, this is still Form 16; from FY 2026-27 onwards it will be renamed Form 130 under the new Act).
  • Form 16A from banks and other deductors for TDS on FD interest, dividends, or rent.
  • Form 26AS from the income tax portal — this is your consolidated tax statement showing all TDS, TCS, and tax payments.
  • Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) — these are now the primary sources of pre-filled data and contain detailed transaction-level information.
  • PAN and Aadhaar — ensure they are linked before you log in.
  • Bank account details — you must pre-validate one bank account for refund processing.
  • Bank statements or passbooks to verify interest income and tally with AIS.
  • Rent receipts and rent agreement if claiming HRA exemption under Section 10(13A).
  • Home loan interest certificate if claiming deduction under Section 24(b).
  • Investment proofs for Section 80C (ELSS, PPF, LIC, NSC), Section 80D (health insurance), Section 80E (education loan), and Section 80G (donations) — but only if you opt for the old tax regime.
  • Interest certificates from banks, post office, or cooperative societies.
Keep these documents organized before you log into the portal. Cross-checking AIS against your actual records is the single best way to avoid a mismatch notice later.

How to File ITR-1 (Sahaj) Online: Step-by-Step Guide

The Income Tax e-filing portal at incometax.gov.in has made the process almost entirely digital and pre-filled. Here is the exact workflow for AY 2026-27.

Step 1: Log In and Select the Form

  • Visit the e-filing portal and log in using your PAN as the user ID and your password.
  • Navigate to e-File > Income Tax Returns > File Income Tax Return.
  • Select Assessment Year 2026-27 and Mode of Filing as Online.
  • Click Start New Filing (or resume if you saved a draft).
  • Select your status as Individual and choose ITR-1 (Sahaj) from the dropdown.

Step 2: Choose Your Tax Regime

  • The new tax regime is the default for AY 2026-27. If you want the old regime with deductions like 80C, HRA, and home loan interest, you must actively opt out.
  • In the Personal Information section, select "Yes" for the question "Do you wish to exercise the option of opting out of new tax regime?" if you want the old regime.
  • Use the in-portal calculator to compare both regimes before locking your choice. For salaried individuals without business income, you can switch regimes every year.

Step 3: Verify Personal Information

  • Confirm your name, PAN, Aadhaar, address, date of birth, and contact details.
  • Add a secondary email and phone number if a tax professional files for you — this is a new field introduced this year to improve communication.
  • Ensure your bank account is pre-validated and marked as the primary account for refunds.

Step 4: Fill Schedule S (Salary Income)

  • This section is pre-filled from Form 16 data uploaded by your employer.
  • Cross-check basic salary, HRA, perquisites, and the standard deduction of ₹50,000.
  • If you switched jobs during the year, add salary details from your previous employer manually.

Step 5: Fill Schedule HP (House Property)

  • For each of up to two properties, mark the property as self-occupied, let-out, or deemed let-out.
  • Enter rent received, municipal taxes paid, and home loan interest under Section 24(b).
  • For self-occupied properties, the interest deduction is capped at ₹2 lakh per property.
  • For let-out properties, there is no cap on interest, but the overall loss from house property that can be set off against other heads is capped at ₹2 lakh.
  • Use the new "unrealized rent" field if applicable.

Step 6: Fill Schedule OS (Other Sources)

  • Enter interest from savings accounts, fixed deposits, recurring deposits, dividends, and family pension.
  • Cross-check every entry with your AIS line by line. The portal flags mismatches aggressively.

Step 7: Declare Section 112A LTCG (If Applicable)

  • Enter sale value, cost of acquisition, and net long-term capital gain.
  • If your gain is up to ₹1.25 lakh, the form accepts it. If it exceeds this limit, the portal will block submission and prompt you to switch to ITR-2.

Step 8: Apply Deductions in Schedule VI-A

  • Old regime only: Claim Section 80C up to ₹1.5 lakh, Section 80D for health insurance, Section 80E for education loan interest (no cap), Section 80G for donations, Section 80TTA for savings interest up to ₹10,000 (non-seniors), and Section 80TTB for senior citizens up to ₹50,000.
  • New regime: Most deductions are unavailable. Only Section 80CCD(2) (employer NPS contribution) and Section 80CCH (Agniveer Corpus Fund) are visible.

Step 9: Review Tax Paid

  • TDS from salary, TDS from other sources, advance tax, and self-assessment tax are pre-filled from Form 26AS.
  • If a tax balance is payable, generate an e-challan inside the portal and pay immediately.
  • If a refund is due, the amount is auto-computed.

Step 10: Validate and Submit

  • Run the portal validation. Fix any errors or mismatches flagged.
  • Preview your return carefully. Once submitted, you cannot edit it without filing a revised return.
  • Click Proceed to Verification.

Step 11: E-Verify Within 30 Days

  • E-verification is mandatory. An unverified return is treated as not filed.
  • The easiest method is Aadhaar OTP — ensure your mobile number is linked to Aadhaar.
  • Other options include net banking, Electronic Verification Code (EVC) through a pre-validated bank account or demat account, or Digital Signature Certificate (DSC).
  • If you cannot e-verify, send a signed physical ITR-V by speed post to CPC Bengaluru within 30 days.

Common Mistakes to Avoid When Filing ITR-1

Even though the form is called Sahaj, taxpayers make costly errors every year. Here are the traps to watch out for:
  • Filing ITR-1 with capital gains above ₹1.25 lakh — even ₹1.26 lakh of Section 112A LTCG forces ITR-2. Any STCG, debt fund gain, property sale, or crypto gain also disqualifies you.
  • Ignoring AIS mismatches — the system now flags discrepancies faster than ever. If your bank reported ₹25,000 interest but you entered ₹20,000, expect a notice.
  • Claiming HRA without proof — rent receipts and the landlord's PAN (for rent above ₹1 lakh annually) are mandatory. The Department rejects unsubstantiated claims during processing.
  • Missing Form 10E for salary arrears — if you received arrears or a back-dated increment, file Form 10E on the portal before claiming Section 89(1) relief in ITR-1. Without Form 10E, the relief is disallowed.
  • Forgetting to e-verify — the 30-day window starts from submission. Miss it, and your return is invalid even if you paid all taxes.
  • Choosing the wrong tax regime — the new regime is default. If you have significant 80C, 80D, HRA, and home loan interest, the old regime may save more tax. Run both through the calculator.
  • Waiting until the last day — the portal crashes, slows down, and throws errors on 31st July. File early to avoid the rush.

Old Tax Regime vs New Tax Regime: What to Choose for AY 2026-27

The new tax regime remains the default for AY 2026-27. If you do nothing, you will be taxed under this regime. Here is how to decide:
  • Choose the old regime if you claim:
    • Section 80C investments up to ₹1.5 lakh (ELSS, PPF, LIC, NSC)
    • HRA exemption
    • Home loan interest under Section 24(b)
    • Section 80D health insurance
    • Section 80E education loan interest
    • Other Chapter VI-A deductions
  • Stick with the new regime if you have minimal deductions and prefer lower tax rates on higher slabs.
For salaried individuals without business income, you can switch regimes every year directly in the ITR. There is no need to file Form 10-IEA for ITR-1 filers — only business taxpayers filing ITR-3 or ITR-4 need that form.
Critical warning: If you file a belated return after the due date, you cannot opt for the old tax regime. You will be mandatorily taxed under the new regime. This alone is a powerful reason to file before 31st July.

Why Filing ITR-1 Matters Even If You Have No Tax Liability

Many people ask, "If my tax is already zero after TDS, why should I file?" The answer is simple: your ITR is your financial identity document.
  • Loan applications — banks demand the last 2-3 years of ITRs for home loans, personal loans, and credit cards.
  • Visa processing — embassies for the US, UK, Schengen, and Canada ask for ITRs as proof of financial stability.
  • Refund claims — if excess TDS was deducted, you cannot get it back without filing.
  • Loss carry-forward — if you have capital losses or house property losses, filing is the only way to preserve them for future set-off.
  • Financial credibility — a consistent ITR history builds trust with lenders, investors, and government agencies.
Even when not legally mandatory, filing your return annually is one of the smartest financial habits you can build.

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