Who can file ITR1 And who can't, What are its significance and what things to keep in mind before filing ITR1, find all the information in this article.
Income Tax Returns (“ITRs”) are essential financial documents that individuals and entities file to declare their income, claim applicable deductions, and report their tax liabilities. Filing an ITR is not only a legal obligation but also a crucial step in financial management. It helps ensure compliance with tax laws, enables smooth financial transactions, and establishes transparency. Among the various ITR forms, ITR-1 (Sahaj) is the simplest and most commonly used, designed for individuals with straightforward income sources. Choosing the correct ITR form, like ITR-1, ensures that taxpayers file their returns accurately and avoid complications.
What is ITR-1 (Sahaj)?
ITR-1, also known as Sahaj, is an Income Tax return form prescribed by the Income Tax Department for individual taxpayers. It is tailored for residents with uncomplicated income sources and is meant for quick and easy filing. Key features include:
- Meant for resident individuals with specific income sources.
- Ideal for those with income up to ₹50 lakhs.
- Simplified layout for first-time and salaried taxpayers.
Who can file ITR1?
ITR-1 is designed for resident individuals meeting specific criteria. Below are the eligibility conditions and exclusions:
Eligibility for filing ITR-1:
- Income from salary or pension: If your total income includes salary or pension, you can file ITR-1.
- Income from one house property: Income derived from a single house property (excluding losses carried forward from previous years).
- Income from other sources: Includes income such as interest from savings accounts, fixed deposits, or family pension.
- Agricultural income: Permitted only if agricultural income does not exceed ₹5,000. If it exceeds 5000 then the person has to file ITR2.
- Total income cap: The total income for the financial year should not exceed ₹50 lakhs.
The form can be accessed at incometax website.
Source wise summary of tax
Source of Income | Applicable ITR Forms |
Salary/Pension | ITR-1, ITR-2, ITR-3 |
House property | ITR-1, ITR-2, ITR-3, ITR-4 |
Capital gains | ITR-2, ITR-3 |
Business or Profession | ITR-3, ITR-4 |
Other sources | ITR-1, ITR-2, ITR-3, ITR-4 |
Foreign sources | ITR-2, ITR-3 |
Agricultural income | ITR1, ITR-2, ITR-3 |
Firms, LLPs, AOPs, BOIs | ITR-5 |
Companies | ITR-6 |
Charitable Trusts/Political Parties/etc. | ITR-7 |
Who cannot File ITR1?
Why choose ITR1?
ITR-1 is the preferred choice for individuals with simple income profiles due to its ease of filing and simplicity. Here are some benefits:
- Ease of use: The form is designed to be user-friendly, ideal for taxpayers filing returns independently.
- Quick filing process: As it caters to limited income sources, it requires fewer details, making the filing process faster.
- Tax refunds made easy: ITR-1 simplifies claiming refunds for salaried individuals or pensioners.
- Cost-Effective: It reduces dependency on professional help for taxpayers with straightforward income structures.
- Compliance-friendly: Filing ITR-1 correctly helps in adhering to tax laws and avoiding penalties for misfiling.
How to File ITR1?
Filing ITR-1 can be done online or offline. Here’s a step-by-step guide for both modes:
- Online mode (Preferred):
- Login to the Income Tax e-Filing portal: Visit www.incometax.gov.in.
- Select 'File now': Choose ITR-1 under the applicable assessment year.
- Pre-Filled data: Review and update pre-filled details like salary, TDS, and bank interest (based on Form 26AS and Annual Information Statement (“AIS”)).
- Add deductions: Declare deductions under Chapter VI-A (e.g., Section 80C, 80D).
- Verification and submission: Verify and submit the return using e-verification methods like Aadhaar OTP or net banking.
- Offline mode:
- Download the ITR-1 form in Excel/Java utility from the Income Tax e-Filing portal.
- Fill in the details and validate the form using the utility.
- Generate the XML file and upload it to the portal.
- Complete e-verification after submission.
Documents needed for filing ITR-1
To file ITR-1 (Sahaj) accurately, you need the following essential documents:
1. Salary and income details:
- Form 16: Provided by your employer, summarizing your salary and TDS.
- Rent receipts: If claiming HRA, include rent receipts and PAN of the landlord if annual rent exceeds ₹1 lakh.
2. Tax and income summaries:
- Form 26AS and AIS/TIS: Available on the Income Tax Portal, showing TDS and taxable income.
3. Bank and interest income:
- Bank statements and interest certificates for savings accounts (Section 80TTA) and FDs.
4. Investment and deduction proofs (Section 80C, 80D, etc.):
- Life insurance premiums, PPF passbook, tax-saving FD receipts, or NSC statements.
- Health insurance receipts (Section 80D) and donation receipts (Section 80G).
- Home loan interest certificate (Section 24) and education loan repayment statement (Section 80E).
Hassle-free filing tips:
- Keep all required documents handy.
- Cross-verify pre-filled details with actual records.
- Avoid errors in bank details to ensure refunds are credited smoothly.
Frequently Asked Questions “FAQs” On Who Can File ITR1
1. Who cannot file ITR-1?
ITR-1 cannot be filed by NRIs, individuals with capital gains, income from business/profession, more than one house property, or agricultural income exceeding ₹5,000. Directors in companies or individuals holding unlisted equity shares are also excluded.
2. Should I file ITR-1 or ITR-2?
Choose ITR-1 if your total income is up to ₹50 lakhs and comes from salary, one house property, or other sources like interest. Opt for ITR-2 if you have capital gains, foreign income, or income exceeding ₹50 lakhs.
3. What is the difference between ITR-1 and ITR-2?
- ITR-1: For resident individuals with simple income sources and total income up to ₹50 lakhs.
- ITR-2: For individuals/HUFs with income from capital gains, multiple house properties, or foreign income.
4. Can an NRI File ITR-1?
No, NRIs cannot file ITR-1. They need to file ITR-2 or ITR-3 based on their income sources.
5. Can HUF File ITR-1?
No, HUFs cannot file ITR-1. They are required to file ITR-2, ITR-3, or ITR-5 based on their income sources and type of income.
Conclusion
ITR-1 (Sahaj) is a streamlined form designed to simplify tax filing for individuals with straightforward income sources. Its user-friendly approach and quick filing process make it the most suitable option for salaried individuals, pensioners, and those with limited additional income. Understanding the eligibility, exclusions, and filing process ensures accurate returns and helps taxpayers remain compliant. Always refer to official guidelines on the Income Tax portal to stay updated on rules and processes.