Individuals who earn more than INR 2,50,000 in the country must pay applicable taxes. And at the end of the year, they are expected to file their tax returns as well. A tax return is a consolidated summary of your income, deductions, exemptions and total taxes paid.
To cater to different taxpayers, the income tax department has classified taxpayers into various categories. And you are expected to file your returns accordingly. The ITR Form 1 or otherwise known as Sahaj Form is for individuals whose annual income does not exceed INR 50,00,000.
The income tax department made some changes to the tax laws and the same is now incorporated in ITR-1 return filing. These updates to the Income Tax Return Form will ensure an easier tax return filing. But before we get to the details of ITR-1 criteria, the following are the changes that one needs to be aware of.
- ITR-1 for individuals must be filed electronically from the assessment year 2018-2019 onwards. The only exception being taxpayers who are above 80 years old.
- Taxpayers who rent their properties must declare their income from them. If you receive income from only one property, it must be a part of your ITR-1.
- You are also required to specify the status of your property as Self occupied, Deemed let out or let out.
- There are some modifications to ITR-1 that will ensure much smoother reporting of salary using Form 16. In the past, there were some issues with syncing of data between Form 16 and ITR-1, which have been now resolved.
- You need to declare the different sources of income, such as interest earned and from which source. There is a separate section for income from other heads to capture such information.
The intent is to make tax return filing a much easier task than what it currently is. This is to encourage more taxpayers to start filing their returns. Here are all the details that you would want to know for ITR-1.
Who can file ITR-1?
Individual/ HUFs who are having following sources of income are eligible to file ITR-1 form:
- Income from salary,
- Income/ loss from only one house property (excluding brought forward loss),
- Income from other sources like interest from savings A/c., interest from fixed deposits, etc. (except casual incomes like lottery, card games, income from race horse etc.)
*In situations where income of minor/ spouse is required to be added in the income of taxpayer, then he can file ITR-1 if such clubbed income is covered under any of the above sources of incomes.
myITreturn automatically selects the appropriate ITR form for you.
Who cannot file ITR-1?
Individual/ HUFs having following incomes are not eligible to file ITR-1 form-
- Income from more than one house property,
- Previous year's brought forward loss from house property,
- Income from capital gains from sale of shares, property, etc.
- Income from business/ profession,
- Income from agricultural activities exceeding Rs. 5,000/-,
- Casual incomes like lottery, card games, horse race, etc.,
- Foreign source income.
- Resident taxpayer having any bank A/c. or any foreign asset like shares, property, etc. outside India.
Checklist of documents required to fill ITR-1
Following documents are required to fill-up ITR-1:
- If you have salary income, you will need Form 16 issued by your employer to enter salary details.
- If you have earned interest on Fixed deposits or saving bank A/c. and TDS has been deducted on the same, you will need TDS certificates i.e. Form 16A issued by deductor to enter interest details.
- You will need Form 26AS to verify TDS on salary as well as TDS other than salary. To know how to download Form 26AS, click here.
- If you are living in rented premises, then you will need rent paid receipts for calculation of HRA (in case you forgot to submit the same to your employer within time).
- You will need your bank passbook, fixed deposit receipts (FDRs) to calculate amount of interest income.
- If you have received rent from your rented house property, then you will need rental receipts to calculate rental income.
- You will also need documents or proof for claiming tax saving deductions U/s. 80C, 80D, 80G, 80GG such as life & health insurance receipts, donation receipts, rent receipts, receipts for tuition fees etc, if the same were not considered in your Form 16.
Contents of ITR-1
ITR-1 form is divided into the sections as below. Taxpayer needs to fill the applicable sections.
1. Income details
Taxpayer need to provide personal details like PAN (Permanent Account Number), Name, Address, Gender, Date of birth, Contact details, whether original or revised return, residential status etc.
Gross Total Income:
Aggregate of all incomes like salary, one house property and other sources is treated as "Gross Total Income". Details related to incomes are required to be filled in respective income schedule.
Taxpayer need to enter income details.
Deductions and Taxable Total Income:
Tax saving deductions under various sections of Income Tax Act.
Taxpayer need to enter his tax saving deduction details.
Some of the frequently used tax saving deductions are as follows-
- Section 80C: Life insurance, PPF, PF, NSC, tuition fees, specified mutual funds, etc.
- Section 80CCC & CCD: Investment in pension funds and schemes of Central Government.
- Section 80D: Health insurance & preventive medical check-up
- Section 80E: Interest payment of higher education loan.
- Section 80TTA: Savings bank & post office A/c. interest.
In this schedule, details of tax deducted at source from salary and on income other than salary are to be entered. Also details of tax payments of Advance Tax and Self Assessment Tax is to be entered in this schedule.
In this Schedule, details of Tax deducted at source (as per Form 27D issued by the collector) is to be entered.
4. Taxes paid and Verification
Under this schedule, details such as:
- exempt income (for reporting purpose),
- bank account in which refund is to be credited
- other bank accounts
- verification i.e name of the assessee, father's name, place, PAN and date
are to be entered. Also, the amount of tax payable or refundable is calculated in this schedule based on the details of income, deductions and taxes paid entered under above schedules.
5. Schedule AL
Details of assets and liabilities at the end of the year where total income exceeds Rs. 50 Lakhs needs to be entered in this schedule.
Under this schedule, details of donations made is to be entered. There are different categoriesof donation as follows:
- Donations entitled for 100% deduction without qualifying limit
- Donations entitled for 50% deduction without qualifying limit
- Donations entitled for 100% deduction subject to qualifying limit
- Donations entitled for 50% deduction subject to qualifying limit
Some important terms:
You may come across some tax terms while filing your tax return that you should about-
- Income tax ward/ circle: Income tax ward/ circle is determined on the basis of PAN and jurisdiction. You may view your ward/ circle by clicking here.
- Revised return: After filing your return if you notice any mistake or addition to the return, then your may file a revised return by making necessary corrections. Original return will be replaced by Revised return.
- Defective return: If you file a return containing any defect, then return will be treated as defective. IT department will issue a notice to correct the defect within time specified in notice.
- Notice number: If you are filing a return in response to any notice, you need to mention the notice number mentioned in the notice.
- Advance tax: Tax paid in advance i.e. before the end of financial year are referred as Advance tax. Advance tax is required to be paid in quarterly instalments if total tax liability exceeds Rs. 10,000/-.
- Self-assessment tax: After filling all the income & deduction details in your return and considering all TDS and advance tax payments, if tax is payable, then the same shall be paid before filing of return. This tax is computed by taxpayer himself hence it is referred as Self-assessment tax.
- TCS (Tax collected at source): At the time of sale of some specific goods, tax is collected by purchase of goods. This tax is known as TCS (Tax collected at source). You can claim this TCS in your return on the basis of Form 27D issued by purchase i.e. tax collector.
Why to choose myITreturn to file your Income-tax return?
- No need to go to a Tax Expert. myITreturn asks you simple questions and by answering them you can easily file your return within minutes.
- You dont have to worry about choosing correct ITR form( ITR 1/2 etc). myITreturn will automatically choose the correct ITR form for you.
- Our helpdesk will assist you with any of your filing as well as post filing queries.
- Our team of tax experts can help and guide you with any of the tax related queries as well as complying with any of the Income-tax related letters and notices.
You may mail us your tax related queries at firstname.lastname@example.org
Using the above steps, you can file your ITR-1. Though you can file the return both online and offline, if your income is above INR 5,00,000 you must file it electronically. On successfully filing your return, you will receive an acknowledgement number. You must now verify your returns, post which the income tax department will start processing it.
To verify, you can either take a printout and send it to the Centralized Processing Center in Bengaluru or use your bank’s net banking feature to e-verify. Irrespective of which method you use, do not forget to file your returns. From the assessment year 2018-2019 onwards, the income tax department will levy a penalty of up to INR 10,000 on failing to file your tax returns
- Who can file ITR-1?
Any individual who receives their income from either a salary, from a single property or other forms such as interests from fixed deposits, savings account etc. should file ITR-1.
- Who cannot file ITR-1?
Individuals who receive income from more than one property, receive income from capital gains such as shares, property, income from business, casual income such as lottery, card games, horse race etc. or foreign source of income cannot file ITR-1.