Who Can File ITR-1? Income from Salary, Eligibility & How to Save Tax on Salary
ITR-1 or Sahaj Form is meant for salaried individuals earning income from salary, pension, or one house property. In this guide, we’ll explain who can file ITR-1, the income types covered, and how you can save tax on salary using deductions under Section 80C, 80D, and HRA.
ITR-1 for Salaried Individuals: A Comprehensive Guide
Filing an Income Tax Return (ITR) is an essential task for salaried individuals in India to comply with tax laws and claim refunds, if applicable. The ITR-1 form, also known as Sahaj, is designed to simplify the tax filing process for individuals with straightforward income sources, primarily from salary, one house property, or interest income. This comprehensive guide explains everything about ITR-1, including its eligibility criteria, a detailed breakdown of income from salary, deductions, a comparison of tax slab rates under the new and old regimes, and an in-depth Frequently Asked Questions (FAQ) section to address common doubts.
Whether you’re a first-time filer or looking to better understand ITR-1, this article provides clear, step-by-step information to help you file your taxes confidently for Assessment Year (AY) 2025-26 (Financial Year 2024-25).
What is ITR-1 (Sahaj)?
ITR-1, or Sahaj (meaning "easy" in Hindi), is an income tax return form introduced by the Income Tax Department of India for resident individuals with a total income of up to ₹50 lakh in a financial year. It is tailored for salaried individuals, pensioners, or those with income from one house property and other sources like bank interest or family pension. The form’s simplicity makes it ideal for individuals with uncomplicated tax profiles.
The ITR-1 form is filed annually, typically by September 15 of the assessment year (e.g., September 15, 2025, for FY 2024-25). It requires details of income, exemptions, deductions, and taxes paid, which are verified against Form 16 and Form 26AS.
Who Can File ITR-1?
ITR-1 is designed for a specific group of taxpayers. Below are the eligibility criteria for filing ITR-1 for AY 2025-26:
- Resident Status: The individual must be a resident of India under the Income Tax Act, based on their stay in India during the financial year.
- Total Income Limit: The total income from all sources should not exceed ₹50 lakh in FY 2024-25.
- Permitted Income Sources:
- Salary income or pension.
- Income from one house property (self-occupied or let-out).
- Other sources, such as interest from savings accounts, fixed deposits, or family pension.
- Agricultural income up to ₹5,000.
- Long-term capital gains under Section 112A up to ₹1.25 lakh (e.g., from equity shares or mutual funds).
- Clubbing of Income: Income of a spouse or minor child can be included if it falls within the above limits and sources.
Who Cannot File ITR-1?
Certain individuals are ineligible to file ITR-1, including:
- Non-residents or Residents but Not Ordinarily Residents (RNOR).
- Individuals with income from business or profession (e.g., freelancers or shop owners).
- Individuals owning more than one house property.
- Those with income from short-term capital gains, lottery winnings, or foreign assets/income.
- Directors of a company or individuals holding unlisted equity shares.
If you fall into any of these categories, you’ll need to use a different ITR form based on your income sources and residential status.
Income from Salary: A Detailed Explanation
Income from salary is the primary income source for most ITR-1 filers. It includes all earnings received from an employer for services rendered, as defined under Section 17 of the Income Tax Act. Understanding the components of salary income and their tax implications is crucial for accurate ITR-1 filing.
Components of Salary Income
Salary income comprises various elements, each with specific tax treatments:
- Basic Salary: The core component of your salary, fully taxable.
- Allowances: Additional payments like House Rent Allowance (HRA), Dearness Allowance (DA), or transport allowance. Some allowances are partially or fully exempt from tax.
- Perquisites: Non-cash benefits, such as rent-free accommodation, company car, or employee stock options, taxed based on their monetary value.
- Bonuses and Incentives: Performance-based payments or commissions, fully taxable.
- Retirement Benefits: Contributions to provident funds, gratuity, or leave encashment, with specific tax exemptions under certain conditions.
Exemptions and Allowances
Some salary components are exempt from tax, reducing your taxable income. Key exemptions include:
- House Rent Allowance (HRA): Under Section 10(13A), HRA is exempt to the least of:
- Actual HRA received.
- 50% of salary (metro cities like Delhi, Mumbai) or 40% (non-metro cities).
- Rent paid minus 10% of salary (basic + DA).
Example: Priya earns ₹50,000 monthly (basic + DA) in Mumbai, receives ₹20,000 HRA, and pays ₹18,000 rent. Her HRA exemption is the least of:
- ₹20,000 (HRA received).
- 50% of ₹50,000 = ₹25,000.
- ₹18,000 – 10% of ₹50,000 (₹5,000) = ₹13,000.
Note: HRA exemption is available only in the old tax regime.
- Standard Deduction: A flat deduction of ₹50,000 (old regime) or ₹75,000 (new regime) is allowed for salaried individuals and pensioners.
- Leave Travel Allowance (LTA): Exempt under Section 10(5) for travel expenses during leave, covering two trips in a block of four years (old regime only).
- Other Exempt Allowances: Includes children’s education allowance (₹100 per child per month, max two children) and hostel allowance (₹300 per child per month, max two children) under the old regime.
How is Salary Income Reported?
Salary income is reported in the “Schedule Salary” section of ITR-1 using details from Form 16, which your employer provides. Key steps include:
- Enter gross salary (total of basic, allowances, perquisites, and bonuses).
- Subtract exempt allowances (e.g., HRA, LTA).
- Apply the standard deduction and other deductions under Section 16.
- Calculate taxable salary after exemptions and deductions.
Deductions Available for ITR-1 Filers
Deductions lower your taxable income, reducing your tax liability. The availability and extent of deductions depend on whether you choose the old or new tax regime. Below is a detailed overview of deductions for ITR-1 filers.
Deductions Under the Old Tax Regime
The old tax regime offers a wide range of deductions under Chapter VI-A and other sections, making it attractive for those with significant investments or expenses:
- Section 80C: Up to ₹1.5 lakh for investments in:
- Employee Provident Fund (EPF).
- Public Provident Fund (PPF).
- Life insurance premiums.
- Equity-Linked Savings Scheme (ELSS).
- National Savings Certificate (NSC).
- Tuition fees for up to two children.
- Home loan principal repayment.
- Five-year fixed deposits with banks or post offices.
- Section 80D: Deduction for health insurance premiums:
- Up to ₹25,000 for self, spouse, and dependent children.
- Up to ₹25,000 for parents (₹50,000 if parents are senior citizens).
- Additional ₹5,000 for preventive health check-ups within the above limits.
- Section 80E: Interest on education loans for higher studies, with no upper limit, available for up to 8 years.
- Section 80G: Donations to specified charitable institutions or funds (50% or 100% of the donation, subject to limits).
- Section 80TTA: Up to ₹10,000 on interest earned from savings accounts.
- Section 24(b): Interest on home loan:
- Up to ₹2 lakh for self-occupied property.
- No upper limit for let-out property.
- Section 80CCD(1B): Additional deduction of up to ₹50,000 for contributions to the National Pension System (NPS), over and above the ₹1.5 lakh limit under Section 80C.
Deductions Under the New Tax Regime
The new tax regime simplifies tax calculations by limiting deductions, focusing on lower tax rates instead:
- Standard Deduction: ₹75,000 for salaried individuals and pensioners.
- Section 80CCD(2): Employer’s contribution to NPS, up to 14% of salary for government employees or 10% for others.
- Section 80CCH: Deduction for contributions to the Agniveer Corpus Fund (introduced for Agnipath scheme participants).
- Family Pension Deduction: Up to ₹25,000 or one-third of family pension, whichever is lower, for pensioners receiving family pension.
Example: Suppose Anil earns ₹10 lakh annually, invests ₹1.5 lakh under Section 80C, pays ₹20,000 for health insurance (Section 80D), and claims ₹1 lakh HRA exemption. In the old regime, his taxable income is ₹10 lakh – ₹1.5 lakh (80C) – ₹20,000 (80D) – ₹1 lakh (HRA) – ₹50,000 (standard deduction) = ₹6.8 lakh. In the new regime, only the ₹75,000 standard deduction applies, making his taxable income ₹9.25 lakh. Anil must compare tax liabilities under both regimes to choose the better option.
Tax Slab Rates: New Regime vs. Old Regime
Your tax liability depends on the tax slab rates applicable under the chosen regime. Below is a comparison of the tax slabs for FY 2024-25 (AY 2025-26).
Old Tax Regime
| Income Range | Tax Rate (Below 60 Years) | Tax Rate (60–79 Years) | Tax Rate (80+ Years) |
|---|---|---|---|
| Up to ₹2.5 lakh | Nil | Nil | Nil |
| ₹2.5 lakh – ₹3 lakh | 5% | Nil | Nil |
| ₹3 lakh – ₹5 lakh | 5% | 5% | Nil |
| ₹5 lakh – ₹10 lakh | 20% | 20% | 20% |
| Above ₹10 lakh | 30% | 30% | 30% |
Rebate under Section 87A: Resident individuals with total income up to ₹5 lakh get a rebate of up to ₹12,500, reducing their tax to zero.
New Tax Regime
| Income Range | Tax Rate (All Ages) |
|---|---|
| Up to ₹3 lakh | Nil |
| ₹3 lakh – ₹6 lakh | 5% |
| ₹6 lakh – ₹9 lakh | 10% |
| ₹9 lakh – ₹12 lakh | 15% |
| ₹12 lakh – ₹15 lakh | 20% |
| Above ₹15 lakh | 30% |
Rebate under Section 87A: Resident individuals with total income up to ₹7 lakh get a rebate of up to ₹25,000, resulting in zero tax. With the ₹75,000 standard deduction, salaried individuals earning up to ₹7.75 lakh may owe no tax.
Key Differences
- Exemption Limit: ₹2.5 lakh (old regime) vs. ₹3 lakh (new regime).
- Deductions: Multiple deductions in the old regime vs. limited deductions in the new regime.
- Tax Rates: New regime offers lower rates at certain income levels but may result in higher tax for those with significant deductions.
- Default Regime: The new regime is the default for FY 2024-25. To opt for the old regime, salaried individuals must select it in their ITR or submit Form 10-IEA (for business income).
Choosing the Right Regime: Use an online tax calculator to compare your tax liability under both regimes. If you have minimal deductions, the new regime’s higher exemption limit and standard deduction may be better. If you invest heavily in tax-saving instruments or claim HRA, the old regime is likely more beneficial.
Frequently Asked Questions (FAQs)
The following FAQs address common queries about ITR-1 for salaried individuals, explained in simple terms with practical examples to clarify concepts.
1. Can I file ITR-1 if I changed jobs and have income from two employers?
Answer: Yes, you can file ITR-1 if you’ve worked for multiple employers in the same financial year, as long as your total income is up to ₹50 lakh and comes from salary, one house property, or other permitted sources. You need to combine the salary income from all employers and report it in the “Schedule Salary” section of ITR-1.
Tip: If TDS was deducted by both employers, claim the total TDS credit in ITR-1 to avoid paying extra tax or to claim a refund if over-deducted.
2. How do I decide between the new and old tax regimes?
Answer: Choosing between the new and old tax regimes depends on your income, deductions, and exemptions. The old regime allows deductions like Section 80C, 80D, and HRA, which reduce your taxable income. The new regime has lower tax rates, a higher standard deduction (₹75,000), and a higher rebate limit (₹7 lakh), but most deductions are not available. Calculate your tax under both regimes to pick the one that saves more.
Tip: Use free tax calculators on platforms like ClearTax or the Income Tax e-filing portal to compare regimes quickly.
3. What documents do I need to file ITR-1?
Answer: To file ITR-1 accurately, gather documents that provide details of your income, deductions, and taxes paid. These documents help you fill the form correctly and avoid mistakes.
- Form 16: Issued by your employer, it shows your salary, allowances, TDS, and exemptions like HRA.
- Form 26AS: Available on the e-filing portal, it shows TDS deducted on salary, interest, or other income.
- Bank Statements: For interest income from savings accounts or fixed deposits.
- Investment Proofs: Receipts for Section 80C investments (e.g., PPF, ELSS), 80D premiums, or NPS contributions.
- Rent Receipts: For HRA exemption claims, along with landlord’s PAN if rent exceeds ₹1 lakh annually.
- Home Loan Statement: For interest and principal deductions under Section 24(b) and 80C.
- Aadhaar Card: Mandatory for e-filing and e-verification.
4. What happens if I miss the ITR-1 filing deadline?
Answer: The due date for filing ITR-1 for FY 2024-25 is September 15, 2025. If you miss this deadline, you can file a belated return by December 31, 2025, but with consequences:
- Penalty: Up to ₹5,000 (₹1,000 if taxable income is below ₹5 lakh).
- Loss of Benefits: You cannot carry forward losses (e.g., from house property) or claim certain deductions.
- Interest: If tax is due, pay interest at 1% per month under Section 234A from September 16, 2025.
Tip: Set calendar reminders or use e-filing platforms that send deadline alerts to avoid penalties.
5. Can I claim HRA exemption in the new tax regime?
Answer: No, HRA exemption under Section 10(13A) is available only in the old tax regime. In the new regime, you cannot claim HRA, which may increase your taxable income if you pay significant rent.
Tip: If you live in a metro city and pay high rent, the old regime may be better due to HRA exemptions.
6. Is it mandatory to e-verify my ITR-1?
Answer: Yes, e-verification is mandatory to complete the ITR filing process. Without verification, your return is considered invalid. You can e-verify using:
- Aadhaar OTP.
- Net banking.
- Digital Signature Certificate (DSC).
- Electronic Verification Code (EVC) via bank or demat account.
Alternatively, you can send a signed ITR-V (acknowledgment) to the Centralized Processing Centre (CPC) in Bengaluru within 30 days of filing.
Tip: E-verification is faster and avoids postal delays. Ensure your Aadhaar is linked to your PAN for seamless OTP verification.
7. Can I switch between the new and old tax regimes every year?
Answer: Yes, salaried individuals with no business income can switch between the new and old regimes every year by selecting the preferred option in their ITR. However, those with business or professional income can opt out of the new regime only once in their lifetime by filing Form 10-IEA and must stick to the old regime thereafter.
Tip: Review your deductions and income each year to decide which regime suits you best.
8. What is Form 16, and why is it important for ITR-1?
Answer: Form 16 is a certificate issued by your employer, summarizing your salary, allowances, exemptions (like HRA), deductions (like EPF), and TDS deducted during the financial year. It’s a key document for filing ITR-1 as it provides accurate salary and tax details to report in the form.
Tip: If you don’t receive Form 16 (e.g., from a small employer), use payslips and Form 26AS to compute your salary income.
9. Can I claim a refund if excess TDS was deducted?
Answer: Yes, if your employer deducted more TDS than your actual tax liability, you can claim a refund by filing ITR-1. The Income Tax Department processes the refund after verifying your income, deductions, and TDS details in Form 26AS. Refunds are credited to your bank account linked to your PAN.
Tip: Ensure your bank account is linked to your PAN and validated on the e-filing portal for faster refund processing.
10. What should I do if I make a mistake in my ITR-1?
Answer: If you discover an error after filing ITR-1, you can file a revised return under Section 139(5) by December 20, 2025, for FY 2024-25. Log into the e-filing portal, select “Revised Return,” correct the mistakes, and resubmit. There’s no penalty for revising, but ensure the revised return is accurate to avoid scrutiny.
Tip: Double-check your ITR-1 before submission, especially income, deductions, and bank details, to minimize the need for revisions.
Conclusion
Filing ITR-1 is a straightforward yet critical process for salaried individuals with income up to ₹50 lakh from salary, one house property, or other sources like interest. By understanding the components of salary income, leveraging deductions, and choosing the right tax regime, you can optimize your tax liability and ensure compliance. The detailed FAQs above address common concerns, empowering you to file your taxes confidently.
Always gather necessary documents (Form 16, Form 26AS, investment proofs), compare the new and old regimes, and file by the September 15, 2025, deadline to avoid penalties. For complex cases or doubts, consult a tax professional or use trusted e-filing platforms like ClearTax or the Income Tax e-filing portal. Filing on time not only fulfills your legal obligation but also ensures timely refunds and financial clarity.
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