What is the story about?
ITR Filing 2026: ITR-1, which is also called as Sahaj, is the simplest and most crucial ITR form exclusively for resident individual salaried taxpayers
or pensioners having straightforward incomes. Form ITR-1 applies to those with an annual income of up to Rs 50 lakh from salaries, pensions, one or two residential properties, and other sources (e.g., bank interest). It is not valid for business owners or non-residents. Let’s explore further to understand the two house property rule and income tax return important FAQs that might interest you. Read more: EPFO UAN Activation Alert! Big change after portal update - Know where and how to activate it using face authentication
Who can file ITR-1?
Income Tax Return Form -1 can be filed by resident individuals with a total income not exceeding Rs 50 lakh during that financial year. ITR-1 can be filed if income is covered under one or more of the following heads:
- Salary or pension income
- Income from up to 2 house properties
- Income from other sources, such as savings interest or FD interest
- Clubbed income of spouse or minor child, if it falls under the same permitted heads
- Agricultural income up to Rs 5,000
- LTCG under Section 112A up to Rs 1.25 lakh, with no carried-forward capital loss
ITR-1 form cannot be used by a person who:
a) is a Director in a company
b) has a short-term capital gain
c) has Long-term capital gain u/s 112A of Income Tax Act,1961 exceeding ₹1,25,000
d) has held any unlisted equity shares at any time during the previous year
e) has any asset (including a financial interest in any entity) located outside India
f) has signing authority in any account located outside India
g) has income from any source outside India
h) is a person in whose case tax has been deducted u/s 194N of the Income Tax Act,1961
i) is a person in whose case payment or deduction of tax has been deferred on an ESOP
j) has any brought forward loss or loss to be carried forward under any head of income
k) has total income exceeding Rs 50 lakhs (excluding LTCG u/s 112A up to Rs 1,25,000)
ITR Filing 2026: New two-house property rules in ITR-1 (Sahaj) for AY 2026-27
Two House Properties: Taxpayers can now report income from up to two house properties in ITR-1, rather than just one house property. As per the CBDT (Central Board of Direct Taxes) notification on 30 March 2026, taxpayers can use ITR-1 even for AY 2026-27, even if they have income from up to two house properties.
For example, you can file an ITR-1 if you:
- Live in one house and rent out another.
- Own two rented properties.
Earlier, owning more than one house property generally meant filing ITR-2. However, the relaxation applies only up to two properties. If you own three or more house properties, you must file ITR-2 instead.
ITR Filing 2026: FAQs
1. What are the key changes in ITR-1 form for AY 2026-27?
Below are the key Changes in ITR-1 for AY 2026-27:
- Two House Properties: Taxpayers can now report income from up to two house properties in ITR-1, rather than just one house property.
- Unrealised Rent Field: A new, specific field for "rent which cannot be realized" has been added, aiding taxpayers with rented properties.
- Foreign Asset Reporting: Requirements for reporting foreign retirement benefits have been removed.
2. Do I need to file any form if I want to opt out of or opt into the New Tax Regime in ITR-1 or ITR-2?
No, you are not required to file any form for opting in or opting out of the New Tax Regime in ITR-1 or ITR-2. You can simply tick “Opting out of New Regime” in the ITR form without the need to file any Form. Only those taxpayers who file ITR-3, ITR-4 or ITR-5 must submit Form 10IEA if they have business income. Individuals and HUFs filing their returns in Forms ITR-1 or 2 are not required to submit Form 10IEA before filing the return.
3. Is it mandatory to define the nature of employment while filing the return?
Yes, it is mandatory to select the nature of employment while filing returns from the following options:
(a) Central Government Employee
(b) State Government Employee
(c) Employee of Public Sector Enterprise (whether Central or State Government)
(d) Pensioners (CG/SG/PSU/OTHER)
(e) Employee of a private sector concern
(f) Not applicable (in case of family pension income
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