The Income Tax Department has rolled out a set of significant upgrades to the ITR-1 (Sahaj) form applicable to income earned in FY 2024–25 (AY 2025–26). These changes aim to improve transparency, enable auto-verification, and ensure compatibility with AIS and 26AS databases.

If you’re a salaried individual or pensioner eligible for ITR-1, here’s what you must know before filing your return.

 

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✅ Who Can File ITR-1 (Refresher)

ITR-1 is applicable to:

• Resident individuals (excluding Not Ordinarily Resident)

• Total income ≤ ₹50 lakhs

• Income from:

  • Salary/Pension

  • One House Property

  • Other Sources (excluding winnings, crypto, capital gains beyond limits)

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🔍 6 Major Changes in ITR-1 for FY 2024–25

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🔹 1. LTCG up to ₹1.5 Lakh Now Allowed in ITR-1

Earlier, even exempt LTCG required a switch to ITR-2. Now, taxpayers can file ITR-1 or ITR-4 if LTCG is within ₹1.5 lakh and under the basic exemption limit.

✅ Important:
Gains must be disclosed separately for:

• Before 23rd July 2024

• On or after 23rd July 2024
  (As per the mutual fund taxation timeline changes)

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🔹 2. Mandatory Detailed Disclosures

The following now require itemized reporting:

• Exempt allowances (e.g., HRA, LTA)

• Interest on housing loan – Section 24(b)

• Chapter VI-A deductions (80C to 80U)

🧠 Tip: Pre-filled fields may appear from last year or AIS — but review and correct them carefully.

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🔹 3. TDS Section Specification + Crypto Disqualification

• Employers/deductors must now mention exact TDS section (e.g., 192, 194J).

• If Form 26AS reflects TDS from:

  • Cryptocurrency transactions (Sec 194S)

  • Lottery or betting winnings (Sec 194B)
    👉 ITR-1 becomes ineligible.

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🔹 4. Aadhaar & Bank Account Mandate

To process refunds, taxpayers must:

• Declare at least one active bank account

• Provide only the final Aadhaar number (Enrollment ID not accepted)

This ensures faster refunds and better KYC compliance.

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🔹 5. Switching Regimes? Declare + Attach Form 10-IEA

As the new tax regime is now the default, you must:

• Mention your choice of regime in the return

• If opting out of new regime, attach Form 10-IEA acknowledgment

• Also confirm your regime status in the previous AY

📌 Flip-flopping between regimes without proper documentation may trigger processing delays or rejection.

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🔹 6. New Smart Utility for Filing

The updated ITR utility now supports:

• Prefilled fields from AIS/26AS

• Real-time validation for deductions, regime choice, and TDS

• Improved user interface for error-free filing

💡 Ideal for salaried taxpayers looking for ease + accuracy.

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📜 CBDT Notification Highlights

These changes are backed by CBDT Notification No. 105/2023 dated 22nd Dec 2023. Key directives include:

• 📌 Default new tax regime (Sec 115BAC(1A))

• 📌 LTCG relief up to ₹1.5L allowed in ITR-1/4

• 📌 TDS section now compulsory in salary/professional incomes

• 📌 Separate field for family pension under “Other Sources”

• 📌 Schema updates enabling cross-verification and auto-rejection for invalid returns

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🧩 Final Words from The Tax Talk

With increased data integration and stricter validations, filing your ITR-1 now requires more attention than ever. But it also means fewer notices and smoother processing, if filed right.

🧾 Need expert help?
Visit www.thetaxtalk.com or drop us a message — our team of CAs and tax advisors is ready to help you navigate the season.