ITR-1 Filing Guide for FY 2025-26: Step-by-Step Guide for Salaried Employees

Sep 8, 2025

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Filing your Income Tax Return (ITR-1, Sahaj) for Financial Year 2025-26 (Assessment Year 2026-27) is one of the most important financial tasks for salaried employees. With recent changes in eligibility, filing rules, and tax slabs, it’s crucial to understand how to file correctly, avoid penalties, and maximize deductions.

This detailed guide covers eligibility, new updates, slab rates, filing process, and practical examples so you can file confidently and on time.

✅ Who Can File ITR-1?

ITR-1 (Sahaj) is meant for resident individuals with simplified income sources. You can file ITR-1 if:

Your total income does not exceed ₹50 lakh
You have income from salary or pension
Income from one house property only
Income from other sources (like bank interest, dividends, family pension)
Agricultural income up to ₹5,000
Long-term Capital Gains (LTCG) up to ₹1.25 lakh (newly allowed in FY 2025-26)

🚫 Who Cannot File ITR-1?

You are not eligible for ITR-1 if you have:

Income above ₹50 lakh
More than one house property
Income from business/profession
Capital gains above ₹1.25 lakh or short-term capital gains
Foreign income or foreign assets
Director in a company or holding unlisted equity shares
Carry-forward losses

📢 Latest Updates in ITR-1 for FY 2025-26

LTCG Inclusion – Individuals can now report long-term capital gains up to ₹1.25 lakh in ITR-1.
Simplified Filing – Both Excel utility and online portal are enabled for ITR-1.
Deadline Extended – The last date to file ITR-1 is 15th September 2025 (for non-audit cases).
Auto Pre-filled Data – Income details from Form 26AS and AIS will now auto-populate in the return.
Penalty Structure – Late filing will attract a late fee of ₹5,000 (₹1,000 if income ≤ ₹5 lakh).

📊 Income Tax Slabs for FY 2025-26 (AY 2026-27)

1. Old Tax Regime (Optional with Deductions)

Income Range	Tax Rate
Up to ₹2.5 lakh	Nil
₹2.5 – ₹5 lakh	5%
₹5 – ₹10 lakh	20%
Above ₹10 lakh	30%

👉 Rebate under Section 87A available for income up to ₹5 lakh (tax = 0).

2. New Tax Regime (Default from FY 2025-26)

Income Range	Tax Rate
Up to ₹3 lakh	Nil
₹3 – ₹7 lakh	5%
₹7 – ₹10 lakh	10%
₹10 – ₹12 lakh	15%
₹12 – ₹15 lakh	20%
Above ₹15 lakh	30%

👉 Rebate under Section 87A available for income up to ₹7 lakh (tax = 0).

📝 Step-by-Step Filing Process for ITR-1

1. Collect Documents

Form 16 (from employer)
Form 26AS (tax credit statement)
AIS (Annual Information Statement)
Bank interest certificates, investment proofs, rent receipts

2. Choose Filing Method

Online (recommended): Directly file on Income Tax e-Filing portal
Offline: Use Excel Utility, then upload JSON file on portal

3. Log in & Start Filing

Go to Income Tax e-Filing portal
Select e-File → Income Tax Return → File ITR
Choose AY 2026-27 and form ITR-1

4. Fill in Income Details

Salary/Pension details (auto-fetched from Form 16)
House property income (if applicable)
Interest/Dividend income under Other Sources
Agricultural income (if up to ₹5,000)
LTCG up to ₹1.25 lakh

5. Claim Deductions (Old Regime only)

Section 80C (PF, LIC, ELSS, PPF, etc.)
Section 80D (Medical Insurance)
Section 24(b) (Home Loan Interest)
Section 80G (Donations)

6. Validate, Submit & E-Verify

Review tax liability
Submit ITR
E-verify using Aadhaar OTP, net banking, or Demat

📌 Example Scenarios

Example 1: Salary ₹6,50,000 – New Regime

Income: ₹6.5 lakh
Tax: 5% on ₹3.5 lakh = ₹17,500
Rebate under 87A (since income < ₹7 lakh) = Nil tax payable

Example 2: Salary ₹10,00,000 – Old Regime with Deductions

Gross Salary: ₹10,00,000
Deductions: ₹1,50,000 (80C) + ₹25,000 (80D) = ₹1,75,000
Net Taxable = ₹8,25,000
Tax = ₹77,500 (after rebate adjustment)

Example 3: Salary ₹12,00,000 + LTCG ₹1,00,000

Salary Income: ₹12,00,000
LTCG: ₹1,00,000 (within ₹1.25 lakh limit, allowed in ITR-1)
Taxable Income = ₹13,00,000
Tax = ₹1,62,500 under New Regime

📅 Filing Deadlines

Return Type	Due Date
Regular Filing (Non-Audit)	15 September 2025
Belated Return	31 December 2025
Revised Return	31 December 2025

✅ Key Benefits of Timely Filing

Avoid penalties & late fees
Get quicker tax refunds
Acts as proof of income (loans, visas, credit)
Compliance with law ensures peace of mind

🔑 Conclusion

The new changes in ITR-1 for FY 2025-26 make filing easier for salaried employees, especially with the inclusion of LTCG up to ₹1.25 lakh. Choosing between the old and new regime is the most important decision—based on your deductions and income level. Filing before the deadline ensures zero penalties and faster refunds.