Filing ITR-1 (Sahaj) for AY 2026-27 is straightforward, but many taxpayers misclassify their eligibility, leading to potential notices from the tax department. Let’s navigate the specifics and real-world scenarios to ensure you’re on the right track.

Who Can File ITR-1?

• Resident individuals with a total income of up to ₹50 lakh.
• Income solely from salaries, one house property, and other sources like interest.
• No capital gains other than limited exceptions (like short-term for listed shares).
• No business income or foreign assets.

Common Filing Mistakes

Even a seemingly simple profile can hide complexities. For instance:

• A taxpayer, Raj, had salary income plus short-term capital gains from trading shares. He mistakenly filed ITR-1, thinking his total income was within limits. However, since he had capital gains exceeding the threshold, he should have filed ITR-2. This oversight led to a notice for underreporting income.

It’s crucial to assess all sources of income. Here are some scenarios where taxpayers commonly slip up:

• Multiple House Properties: If you own more than one property, you can't use ITR-1. This often surprises those who think they qualify based on salary alone.
• Foreign Assets: Holding any foreign bank accounts or investments disqualifies you from filing ITR-1. Be careful with disclosures in your Form 26AS.

Avoiding AIS/Form 26AS Mismatches

The Annual Information Statement (AIS) now plays a significant role in ensuring compliance. If your AIS shows capital gains or other forms of income that you don't declare, you risk scrutiny. Always cross-verify your income details against your Form 26AS before filing.

Best Practices for Filing ITR-1

• Ensure income from all sources, especially capital gains, is accurately reported.
• Double-check the number of house properties owned.
• Consult with a tax professional if you have a mixed income profile or are unsure about your classification.

Conclusion

Filing ITR-1 can be seamless if you understand the criteria and pitfalls well. If your income profile is straightforward, you may be eligible. However, missteps can lead to notices or even penalties. For tailored advice, consult our tax experts to ensure compliance and peace of mind.