Newly Inserted Important Validation Rule for ITR-1 (AY 2025-26)
A critical new validation rule has been introduced for ITR-1 filings for AY 2025-26:
If any of the following TDS section codes are reported in Schedule TDS2 or TDS3, the taxpayer will NOT be allowed to file ITR-1. The Income Tax Return utility will automatically invalidate the return, requiring the taxpayer to file ITR-2 or another appropriate form instead.
| List of Disqualifying TDS Section Codes | |
| Section | Particulars |
| 194B | Winnings from lotteries or crossword puzzles |
| 194BB | Winnings from horse races |
| 194BA | Winnings from online games |
| 194IA | Payment on transfer of certain immovable property (other than agricultural land) |
| 194IC | Monetary consideration under a Joint Development Agreement |
| 194LA | Compensation for compulsory acquisition of certain immovable property |
| 194S | Payment for transfer of Virtual Digital Assets (e.g., cryptocurrency) |
| 194E | Payments to non resident sportsmen or sports associations |
| 194LB | Interest from infrastructure debt funds to non residents |
| 194LC | Interest from specified foreign borrowings or bonds |
| 194LBA(a)/(b)/(c) | Distributed income by business trusts/REITs/InvITs |
| 195 | Any other sum paid to non residents (e.g., royalties, interest) |
| 196A/B/C/D/(1A) | Income to non residents from mutual funds, offshore funds, GDRs, FIIs, specified funds |
| 194Q | Purchase of goods |
| 194C | Payments to contractors and sub contractors |
| 194R | Benefit or perquisite in respect of business or profession |
Impact of This Rule
– If any of these TDS codes are present in your TDS schedules, you cannot file ITR-1.
– You must use ITR-2 or another ITR