To make tax filing easier, the income tax department has categorized the taxpayers into many groups. These groups are created according to the income and the source of income. Therefore, everyone has to file their Income Tax Returns accordingly. Here, we are going to discuss ITR1 form, which is also known as Sahaj Form. This form is for the people who have income up to Rs.50, 00, 000.
Before understanding ITR1 in details it is necessary to know that all the taxpayers are required to link their Aadhar Card with their PAN card on the website of the Income Tax Department.
Eligibility to File ITR1
ITR1 form is a simple one-page form for those who have income up to 50 Lakh rupees from any of the following sources:
- Individuals who get income from pension or salary.
- Income through one house property (here, the cases wherein the loss is brought from the previous years are excluded).
- Income from other sources excluding the winnings from horse race and lottery.
In the situation of clubbed returns of the income tax, wherein minor or spouse is included, this can be done only if the income is limited to all the above specifications.
Who is Not Eligible to File ITR1 Form for Assessment Year 2019 - 20
- Any individual having income more than Rs.50 Lakhs is not eligible to use this form.
- Non-residents and residents not ordinarily residents (RNOR) are not eligible to file Income Tax Returns using ITR1.
- Any individual who is a director in some company as well as invested in unlisted shares of equity is not eligible to use this ITR form
- Apart from this, the individuals who are earning income through any of the below-mentioned means are also not eligible for file the ITR1 form:
- Individuals earning income from more than one residential property.
- Taxable capital gains both long and short term.
- Legal gambling, Racehorses, lottery, etc.
- Income from agriculture that is exceeding Rs.5, 000.
- Income from profession or business
- Individual who is claiming the relief of the tax paid in foreign or getting double tax relief as per Section 90/ 90A/ 91.
- An individual who is a resident but has assets (includes the financial interest at any entity) anywhere outside India or an individual is a signing authority of an account that is located outside India.
The process to File ITR1 Form
One can fill his/her ITR1 form either offline or online (electronically):
The following people are only eligible to file the Income Tax Return offline:
- Any individual who is 80 years of age or more
- A HUF or an individual who does not have income more than Rs.5 Lakhs and who does not have to claim any refund in his/her ITR.
These people have to duly fill a paper form or physical form. The IT department issues an acknowledgment at the time of physical paper return submission.
Online or Electronic Filing:
- Transmitting the data electronically and then submitting the ITR return verification as ITR-V to CPC, Bangaluru.
- Filing the return online and e-verifying the ITR - V via Aadhar/ net banking/ EVC/ OTP.
If a taxpayer submits his/her ITR1 form electronically, then the acknowledgment is sent to his/her registered email id. He/she can choose to download this form manually from the website of the income tax department. After this, one is required to sign this form and send it to the CPC office of the Income Tax Department, which is in Bangaluru within 120 days after e-filing. Alternatively, he/she can e-verify his/her Income Tax Return.
The Changes Made in ITR1 Form for the Assessment Year 2017 - 18:
The major changes that are being implemented in ITR1 form in AY2017-18 are as follows:
- Reposting of Cash Deposits During the Period of Demonetization: A new column is added in the ITR form wherein a taxpayer has to disclose the details of all the cash deposits that he/she has made in his/her bank account during the period of demonetization, which is between 9th November 2016 and 30th December 2016. However, a taxpayer has to fill this column only if he/she has made any deposits of Rs.2 Lakh or more during this period in his/her bank account.
- Providing Aadhar Number is Compulsory: Every taxpayer is needed to provide his/her Aadhar number in the ITR. If a person does not have an Aadhar number but has applied for the Aadhar card, then he/she can provide his/her Enrollment ID of the application form of Aadhar in the return of income.
- Declaration of All the Bank Accounts: A taxpayer has to disclose the details of all the savings or current bank accounts that he/she possesses or has possessed during the past year. However, details of dormant accounts those are not operational for approximately three years is not required to be given. The account numbers must be as per the Core Banking Solution (CBS) of the bank.
- Easy One Page ITR Form for the Taxpayers of Salaried Class (ITR1 Sahaj): As the Indian government has made the process simplest by making the ITR1 form the easiest for the people having salary up to Rs.50 Lakh from a pension, salary, income from house property and/or from other sources. The columns that are not frequently used by the taxpayers are removed from the form, these columns are:
- Schedules of TCS and TDS are merged into one to make ITR1 simpler and shorter.
- This form has retained the deductions that are majorly being used by the payers of the tax such as per Section 80D, 80C, 80TTA, and 80G. If a taxpayer wants to claim the deductions under some other provision of chapter VI - A, then he/she can mention the relevant Section under the column that is titled as ‘Any Other’.
- Some new columns to are inserted for reporting the long-term capital gains and dividend income exempt as per Section 10 (38) and Section 10 (34) respectively. It has been made mandatory to file the income tax returns for people who have long term capital of Rs.2.5 Lakh or above despite their taxable income being below Rs.2.5 Lakh.
The Changes Made in the ITR1 Form for the Assessment Year 2018 - 19
The major changes that are made in ITR1 form for the AY 2018 - 19 are:
- Before AY 2018 - 19, the ITR1 form was applicable for both the Residents Not Ordinary Residents (RNOR) and the Residents as well as to Non- Residents. In this AY, the ITR1 form is made applicable only for the Residents.
- The condition wherein the individuals having salaried income, income from one house property, and other sources of income having income up to Rs.50 Lakh is still there.
- The new requirement to furnish the salary breakup is introduced. Until now, all these details were available in Form 16 and the necessity to disclose these details in the ITR had never come up.
- There is as well a requirement to provide the salary breakup in the House Property, which was earlier necessary only in ITR - 2 and some other forms.
- In TDS schedule, there is an additional field available that provides the details of TDS according to Form 26QC for the TDS that is made on rent. In addition to this, the provision of mentioning PAN for Tenant for these cases of rent is also made.
The Changes Made in the ITR1 Form for the Assessment Year 2019 - 20
The major changes that are being incorporated in ITR1 form for the AY 2019 - 20 are:
- ITR1 form for the FY 2018 - 19 was not applicable for those individuals who were either the directors of some company or have invested in some unlisted shares of equity.
- The return that is filed in the section is divided between normal filing and one that is filed as a response to some notice.
- In part ‘A’, a new checkbox with the name of ‘Pension’ is introduced under ‘Nature of Employment’ section.
- All the taxpayers are required to give detailed information according to income as per ‘Income from other sources’.
- The deductions according to salary are divided into entertainment allowance, standard deduction, and professional tax.
- Under ‘Income from house property’, ‘Deemed to be let out property’ option will be available.
- A separate new column is introduced in ‘Income from other sources’ for the deduction under section 57(iia) - in a situation of family pension income.
- For senior citizens, a new section 80TTB is included.
FAQs on ITR1 Form
Question 1: I earn income more than Rs.50 Lakhs, which form of ITR should I file this assessment year?
Answer: If one has income more than Rs.50 Lakhs, then you can file ITR3, ITR2, or ITR4 (Sugam) according to the source of income. However, if one is a salaried individual and has income more than Rs.50 Lakhs, then you have to file ITR 2 form. If an individual has income from some profession or business, then he/she has to file ITR 3. If one is following presumptive income under section 44AE/ 44AD, then it is suggested to file ITR4 (Sugam) form.
Question 2: If I have exempt agricultural income, should I file ITR1 form?
Answer: Yes, one can file ITR1 form but only if the agricultural income is not more than Rs.5000. And if the agricultural income of an individual is more than Rs.5000, then he/she should file ITR2.
Question 3: Does one need to report exempt LTGC under ITR-1?
Answer: One needs to report exempt LTCG under ITR1 only if it is exempted as per Section 10(38). If one has taxable LTGC, then he/she can use other applicable forms. Moreover, those who have LTGC more than Rs.2.5 Lakhs have to necessarily e-file income tax returns even if their income is below the income tax's taxable limit.
Question 4: Which bank accounts should be reported in ITR1?
Answer: The details of different current and savings accounts held by an individual at any time during the last year must be given in ITR1 form. However, it is not necessary to give the details of the dormant accounts that are not operational for more than three years. The provided account number must be according to the Core Banking Solution (CBS) system. This information has to be given in Part - E of the ITR form.
Question 5: Does one need to provide the details of dividend income earned from the Mutual Funds?
Answer: Yes. The dividend income earned from the mutual funds should be exempted under Section 10(35) of the Income Tax Act, 1961. This is provided under Part D in the head ‘Exempt Income’.
Question 6: If one has rental income, then can he/she file ITR1?
Answer: Yes, if one has rental income, then also he/she can file ITR1.
Question 7: If one has a house property loan, then can he/she file ITR1?
Answer: Yes, one can do the same.
Question 8: Should I file ITR2 instead of ITR1, if my maximum income exempt exceeds Rs.5K. What is the qualification for exempted income?
Answer: One should file ITR-2 if he/she has total exempted income more than Rs.5K. Some incomes are exempted as per Section 10 of the Income Tax Act. Below are some of the exempt income’s examples:
- Income from agriculture
- Maturity amount from LIC under Section 10 (10D)
- Long term capital gain on listed securities and shares as per Section 10 of the Income Tax Act.
Leave encashment, pension, and gratuity can be exempted in Section 10 of the Income Tax Act.
Question 9: At the time of ITR1 filing should I show interest income under income from Other Sources if the TDS is already deducted?
Answer: Yes, one can include the interest income in the Income from Other Sources, even the tax has been deducted from your bank.
Question 10: My total medical expenses for one year are Rs.6, 000 out of the medical expenses of Rs.15, 000 allowed by my company. How much tax is deducted if I do not submit all the medical proofs for the entire remaining amount?
Answer: The Income Tax Department allows the medical reimbursement of maximum Rs.15, 000. However, one has to provide all the necessary bills to his/her employer for the same. All the remaining unclaimed money from Rs.15, 000 is added to the taxable salary of the person. In this way, the taxable salary is taxed according to the slab rate one belongs to. However, the bills should be between April’s last year to March this year. Basically, the medical reimbursement concept is done within the budget of 2018 and is replaced by the standard deduction that is Rs.40, 000 and is effective from April 01st, 2018.
Question 11: How many restrictions allowed over the number of returns that one can file by using one email id and mobile number?
Answer: A taxpayer can file only 10 returns by using the same mobile number and email id.
Question 12: Do I need to provide the details of my Bank Account while filing the Income Tax Return even when there are no due refunds on me?
Answer: Yes, it is necessary to provide the details of your Bank Account whether you have due refunds or not. The reason for the same is some taxpayers may end up paying the extra tax liability. In this situation, it is necessary for the IT- Department to provide refunds within a specific amount of time. However, if you forget to provide your bank account details, then the process can be delayed considerably.
Question 13: Provide the structure of ITR1 form?
Answer: The ITR1 form is divided into the following parts:
- Part A: Personal Details
- Part B: Total Gross Income
- Part C: Total Taxable Income and Deductions
- Part D: Tax Status and Tax Computation
- Schedule IT: Advance Tax details and Self-Assessment Tax Payment
- Schedule TDS: Tax Deducted at Source details
One cannot use the ITR1 form if he/she is claiming the double taxation relief as per Section 90/ 91/ 90A.
Question 14: Provide the meaning of the following terms:
- Self-Assessment Tax Payments
- Advance Tax
- Notice Number
- Revised Return
- Annexure-less Return
Answer: The meaning of these terms is explained below:
- Self-Assessment Tax Payments: The difference between the tax paid and tax payable is known as a self-assessment tax payment. This needs to be paid before one file the returns. When one fills the form for the first time, then he/she does not know whether the self-assessment tax should be paid or not. Therefore, it is recommended to fill the form first with the details of the Advance Tax, if it is paid. Then it is suggested to compute the income and if after calculating it is found that the taxes are payable then do the payment and fill all the details of the self-assessment tax payment section of the return form.
- Advance Tax: The TDS takes care of the advance tax payment part for the salaried people. However, one may have some other type of income - such as interest provided in the savings bank account, income through rent, fixed deposit, capital gains or bonds. If the tax on the income is greater than Rs.10K per year, one is needed to estimate his/her income and pay the Advance Taxes. The advance tax must be paid in installments (quarterly) in June, September, December, and March.
- Notice Number: One should provide this only if he/she is filling his/her Income Tax Return after getting a notice from the Income Tax Department.
- Revised Return: If one has already filed his/her Income Tax Return, however, later he/she realizes that he/she has made some mistake in it, later he/she can re-file the return. This re-filing of return is known as a revised return. For example, one can file his/her Revised Return for the Financial Year 2017 - 18 till 2019, 31st
- Annexure-less Return: The ITR1 form is an Annexure-less return. According to this one does not have to attach any documents like Form 26AS or Form 16 with this form (ITR1).
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