A look at ITR-1 for the year 2025–26
Indian taxpayers who have incomes from different sources can use Form ITR-1, also known as Sahaj. The Central Board of Direct Taxes has made some New Tax regimes to the ITR forms. These changes are meant to be clearer and are in line with the changes made to the Finance Act. In this piece, we’ll talk about the new rules and requirements for the fiscal year 2024–25. File your ITR now to avoid penalties and meet smoother compliance.
Who is Eligible to File ITR-1?
To be able to file ITR-1 for AY 2025–26, a person must meet the following requirements
- Total Money Made: During the financial year, the total income shouldn’t be more than ₹50 lakh.
- Income Sources: The money can come from a salary, a family pension, farm income of up to ₹5,000, and other sources, such as interest on savings accounts and deposits and income tax returns.
- Status of Residency: The person must be a local Indian and not an RNOR or NRI.
Big Changes to ITR-1
For the 2024–25 tax year, the ITR-1 form has undergone some major changes:
- Default Tax System: For AY 2025-26, the new tax system is now the default. People who pay taxes must choose to opt out and go back to the old system if they want to.
- Automatic Filling in of Details: The Income Tax Department has improved the part of ITR-1 that lets you fill in information ahead of time. The database will automatically fill in salary income, interest on savings, and other income. This will cut down on mistakes and human filling.
- More Information Must Be Given: Taxpayers will have to give more information about some types of income and benefits. These include income that isn’t taxed, income from farming, and some allowances underparts like 80CCH.
- Details about your bank accounts: Taxpayers must list all of their bank accounts from last year, along with the type of account they all have.
- More reports from senior citizens: The process has been sped up for senior citizens, and some parts of it now take into account their money issues and earnings.
What Changes Will Happen to ITR-1 Forms for AY 2025-26?
From Assessment Year or AY 2024–25 onwards, ITR-1 forms will have to be filled out under the new tax system that was introduced with Budget 2020. People will have to completely change how they file their ITR-1s because of the change. The following is a detailed list of how the new tax system affects ITR-1 forms:
Tax Rates and Slabs
New Structure with Slabs: The new tax system has a new slab structure with lower tax rates but no tax breaks. The amounts range from ₹0 lakh to ₹4 lakh.
Effects on Tax Returns
Fewer Deductions: Under the new rules, most deductions that were allowed under the old rules are not allowed. The only ones that are still allowed are 80CCD(2), 80CCH, and 80JJAA4. This makes it easier to figure out your taxes, but it could cost more for people who took more than one benefit. Tax regimes that are easy to change
It is possible for taxpayers to switch between the old and new systems when they file their ITRs before the due date. If someone thinks that the old system is better, they can switch to it by making the right choice in the form of an ITR.
Normal Tax Deduction
Increased Standard Deduction: For salaried taxes, the standard deduction has gone up from ₹50,000 to ₹75,000 under the new rules. In the end, this could lower the net income and the amount of tax that needs to be paid.
Circumstances When Taxpayers Cannot File ITR 1?
For people who can’t use ITR-1, they need to make another tax return, like ITR-2 or ITR-3. Some of these are:
- Income of ₹50 Lakh or More: People whose total income is ₹50 lakh or more.
- Not Living There and RNOR stand for Residents Not Ordinarily Resident and Non-Resident Indians.
- Houses for Sale Two or More: Money made from two or more rental homes.
- Business or Professional Income: Income from a business or job.
- Capital Gains: Capital gains for the short term or the long run.
- Unlisted Equity Shares: Investing in stocks that aren’t on the stock market.
- Board Directors of Companies: Board directors of companies.
- Certain Tax Breaks: Section 194N tax breaks or delayed income tax on ESOPs from qualified start-ups.
How to Fill Out Form ITR-1 for the Year 2025–26
Here are the steps you need to take to properly file ITR-1:
- Get the Documents You Need: Get together Form 16, Form 16A, Form 16B, bank statements, and any other papers that are needed.
- Sign up for Aadhaar and PAN: To escape problems with filing, make sure that your Aadhaar and PAN are linked.
- Verify the bank account ahead of time: Make sure that the bank account you want to receive your return is correct.
- Pick the Right ITR Form: Make sure you choose ITR-1 if you can.
- Save Before the Due Date: The ITR-1 for the AY 2025–26 must be turned in by July 31, 2025. Section 234F says that there is a punishment for submitting it late.
- Check Your Tax Return: Choose e-Verification to make sure your return is real.
Get Started with TaxDunia
Some changes have been made to the ITR-1 form for AY 2025-26 that make the tax filing process clearer and easier to do. People will be able to file their taxes easily and correctly if they follow these changes and rules. For further updated information, reach out to TaxDunia. We are your reliable partner in filing your taxes and GST returns.
