Who can file ITR-1, who cannot file it for FY25?

Filing your tax return starts with choosing the correct ITR form. The Income Tax Department has released the income tax return (ITR) forms for Financial Year 2024-25 ( Assessment Year 2025-26). Are you wondering if ITR-1 is the right form for you? This article explains who can and cannot use ITR-1 to file their income tax return, the documents you’ll need, and the key changes introduced this year.

ITR-1 form details
The Income Tax Department has revised the eligibility criteria for filing ITR-1 for the Assessment Year 2025-26. These changes bring relief to many salaried individuals and small investors, especially those with limited long-term capital gains (LTCG). However, not everyone qualifies to fill Form ITR-1.

Taxable income below Rs 7 lakh: Will you pay zero income tax if this income includes LTCG and STCG for FY 2024-25?

Who can file an income tax return using ITR-1 form?
In the past, individual taxpayers with capital gains were not eligible to file their ITR using ITR-1 form. The new form allows individual taxpayers to file their ITR using ITR-1 even if they have long-term capital gains but subject to the condition that the gains are long term capital gains from sale of listed equity shares and/or equity mutual fund units and the amount of gain is only up to Rs 1.25 lakh in a financial year.

Eligibility to file ITR-1
According to Shalini Jain, Tax Partner, People Advisory Services, EY India, taxpayers are eligible to file ITR- 1 if they satisfy the following conditions:
a) Individual being ordinarily resident (ROR).
b) Total taxable income does not exceed Rs 50 lakh in FY 2024-25.
c) Have income from one or more of these income sources: Salary, one house property, other sources such as interest, dividend, pension, etc., long-term capital gains up to Rs 1.25 lakh from listed equity shares and/or equity mutual fund units and agricultural income up to Rs 5,000.
Long-term capital gains from listed equity shares and equity mutual fund units are taxed under Section 112A of the Income Tax Act.

Income tax slabs for salaried individuals for ITR filing FY 2024-25 (AY 202-26) under old, new tax regime

Who cannot file ITR-1 for FY 2024-25 ?
The Income Tax Department has outlined specific restrictions who cannot file ITR-1. Individuals with higher income, certain types of capital gains, business or professional income, or specific financial transactions are not eligible to file ITR-1.
Below is a detailed list of individuals who cannot use this form for the Assessment Year 2025-26.

• Is a Resident Not Ordinarily Resident (RNOR), and Non-Resident Indian (NRI)
• Has total income exceeding Rs 50 lakh
• Has agricultural income exceeding Rs 5000/-
• Has income from lottery, racehorses, legal gambling etc.
• Has taxable capital gains (short term and long term)
• Has Long-term capital gain u/s 112A exceeding Rs.1.25 lakhs
• Has invested in unlisted equity shares
• Has income from business or profession
• Is a Director in a company
• Has tax deduction under section 194N of Income Tax Act
• Has deferred income tax on ESOP received from employer being an eligible start-up
• ·Owns and has income from more than one house property
• Is not covered under the eligibility conditions for ITR-1

What are the documents needed to file an income tax return ITR-1?
You would need to download AIS and keep copies of Form 16, house rent receipt (if applicable), investment payment, premium receipts (if applicable). However, ??ITRs are annexure-less forms, so you are not required to attach any document (like proof of investment, TDS certificates) along with your return (whether filed manually or electronically). You need to keep these documents for situations where they need to be produced before tax authorities such as assessment, inquiry, etc.