Filing your income tax return can often feel like navigating a maze, especially when it comes to selecting the right form. For the Assessment Year 2026-27, understanding the eligibility criteria for ITR-1 (Sahaj) is crucial to avoiding common mistakes that could lead to notices from the tax department.

Who Can Use ITR-1?

• Resident individuals earning a salary
• Income from a single house property
• Other sources of income capped at ₹50,000 (like interest)
• No capital gains or foreign income

For example, consider Rajesh, a salaried individual who also dabbles in stock trading. He initially thought he could file ITR-1 because his salary was his primary income. However, after realizing he had made short-term capital gains exceeding ₹50,000, he quickly learned he needed to file ITR-2 instead. This oversight could have led him to face scrutiny and potential penalties from the tax department.

Common Filing Mistakes

• Misreporting Income: Failing to report all sources of income, such as side gigs or freelance work.
• AIS/26AS Mismatches: Not reconciling the Annual Information Statement (AIS) with your Form 26AS can trigger notices.
• Ignoring Capital Gains: Even small amounts from mutual funds or crypto trading can disqualify you from ITR-1.

Key Considerations for AY 2026-27

Each taxpayer's situation is unique, and the right choice of ITR form can significantly impact your tax filing experience. Always review your income sources thoroughly before deciding.

If your financial profile is complex or includes varying income sources, consulting with a tax professional can save you headaches down the road. Don’t let a simple filing error turn into a tax notice!