| Overview: ITR 1 (Sahaj) is India’s most popular tax return form for salaried individuals and pensioners. This comprehensive guide covers eligibility requirements, required documents, step-by-step filing process, calculation methods, and deadlines for AY 2025-26. Learn how proper ITR 1 filing impacts your credit profile and access to financial products. |
Filing your ITR 1 correctly can save you thousands of rupees and unlock better financial opportunities. The Income Tax Department has updated several rules for FY 2024-25, making it crucial to understand the latest eligibility criteria and filing procedures.
This guide walks you through everything about ITR 1—from checking if you qualify to submitting your return and claiming maximum refunds. We’ll also explore how accurate tax filing affects your credit score and eligibility for loans and credit cards.
Who Can File ITR 1: Eligibility Criteria Explained
ITR 1 is designed for resident individuals with straightforward income sources. Your total income must not exceed ₹50 lakh during the financial year. This form covers salary earners, pensioners, and those with simple investment income.
The following income sources are permitted under ITR 1:
- Salary or pension income
- Income from one house property only
- Interest from savings accounts and fixed deposits
- Family pension receipts
- Agricultural income up to ₹5,000
- Long-term capital gains under Section 112A (maximum ₹1.25 lakh from listed securities)
Who Cannot Use ITR 1
Several situations disqualify you from using ITR 1. If you have business or professional income, including freelancing or consultancy work, you must file ITR 2 or ITR 3. Similarly, owning more than one house property requires a different form.
ITR 1 is not applicable if you have:
- Business or professional income
- Multiple house properties
- Capital gains exceeding ₹1.25 lakh
- Foreign income or assets
- Director positions in companies
- Agricultural income above ₹5,000
Mandatory Filing Scenarios
Even if your income is below the exemption limit, you must file ITR 1 in certain cases. These include having bank deposits exceeding ₹50 lakh, current account deposits over ₹1 crore, or annual electricity bills above ₹1 lakh.
Example Scenario: Consider Rahul, a software engineer earning ₹35 lakh annually. Despite being below the ₹50 lakh limit, he must file ITR 1 because his total bank deposits exceeded ₹50 lakh during the year.
Required Documents for ITR 1 Filing
Proper documentation ensures smooth ITR 1 filing and quick processing. Your employer provides Form 16, which contains salary details and TDS information. Form 26AS shows all tax payments made on your behalf.
Must-have documents:
- Form 16 from your employer
- Form 26AS (downloadable from TRACES portal)
- Bank interest certificates
- House property documents
- Investment proofs for deductions
- Aadhaar-PAN linking confirmation
Investment and Deduction Proofs
To claim maximum deductions under ITR 1, gather all investment proofs. Section 80C allows deductions up to ₹1.5 lakh for investments like PPF, life insurance, and ELSS mutual funds. Section 80D covers health insurance premiums up to ₹25,000.
| Expert Tip: Keep digital copies of all certificates and receipts. This speeds up the filing process and helps during any future scrutiny. |
Step-by-Step ITR 1 Filing Process
The Income Tax e-filing portal streamlines ITR 1 submission. After logging in with your PAN, select Assessment Year 2025-26 and choose ITR 1 (Sahaj). The system pre-fills data from Form 16 and Form 26AS, reducing errors.
Filing steps:
- Register/login on incometax.gov.in
- Select AY 2025-26 and ITR 1 form
- Import data from Form 16 and 26AS
- Enter additional income details
- Claim applicable deductions
- Calculate tax liability
- Pay any outstanding tax dues
- E-verify using Aadhaar OTP or net banking
Tax Calculation Under ITR 1
Understanding tax calculation helps optimise your financial planning. Under the new tax regime (default for AY 2025-26), different rates apply to various income slabs. The old regime remains optional if you want to claim specific deductions.
Let’s calculate tax for someone earning ₹8 lakh annually:
- Income up to ₹3 lakh: Nil
- ₹3-7 lakh at 5%: ₹20,000
- ₹7-8 lakh at 10%: ₹10,000
- Total tax: ₹30,000
- Less rebate under 87A: ₹12,500
- Net tax payable: ₹17,500
E-verification and Submission
After calculating your tax liability and entering all details, verify your ITR 1 electronically. Airtel Finance personal loan applications often require verified ITR copies, making timely e-verification crucial.
| Did You Know? E-verification using Aadhaar OTP takes just 30 seconds and eliminates the need for posting physical documents. |
Key Deadlines and Penalties for ITR 1
| Filing Type | Due Date | Late Fee |
| Original Return | 31 July 2025 | Nil |
| Belated Return | 31 December 2025 | Up to ₹5,000 |
| Revised Return | 31 December 2025 | Nil |
Missing the ITR 1 deadline attracts penalties under Section 234F. The late fee ranges from ₹1,000 to ₹5,000, depending on your income level. Additionally, interest charges apply on unpaid taxes.
Impact on Credit Score and Loan Eligibility
Timely ITR 1 filing significantly affects your credit profile. Banks and NBFCs use ITR data to assess loan eligibility and determine interest rates. A well-documented tax history improves your chances of getting approved for personal loans at competitive rates.
Maximising Refunds and Deductions
Proper planning helps maximise your ITR 1 refunds. Ensure all eligible TDS and TCS credits are claimed from Form 26AS. Even small deductions like children’s tuition fees or medical expenses can reduce your tax liability.
Filing ITR 1 correctly sets the foundation for your financial health and creditworthiness. Accurate documentation, timely submission, and strategic deduction planning can save thousands of rupees while improving your access to premium financial products. Remember that your tax filing history directly impacts loan approvals and interest rates offered by financial institutions.
Take action today by gathering your documents and filing ITR 1 before the deadline. If you have immediate financial needs, Airtel has got your back. Get an Airtel Finance Personal Loan offer up to ₹900000 with quick disbursal and flexible EMIs—100% digital.
FAQs
1. Can I file ITR 1 if I own rental property in two different cities?
No, ITR 1 only allows income from one house property. Multiple properties require filing ITR 2, regardless of their location or rental income amount.
2. What happens if I miss the July 31 ITR 1 deadline?
You can file a belated return until December 31 with late fees up to ₹5,000. However, refund processing gets delayed significantly.
3. Does freelance income disqualify me from using ITR 1?
Yes, any business or professional income, including freelancing, consultancy, or gig work, requires filing ITR 2 or ITR 3 instead of ITR 1.
4. Can I claim deductions for Airtel Finance fixed deposit investments in ITR 1?
Interest earned from fixed deposits is taxable under ‘Income from Other Sources’, but the principal amount doesn’t qualify for Section 80C deductions.
5. How does accurate ITR 1 filing affect my loan eligibility?
Proper ITR filing demonstrates income stability and tax compliance, improving credit scores and increasing approval chances for personal loans and credit cards.
