ITR-1

What is ITR?

ITR or Income Tax Return is a form provided by the Income Tax Department of India wherein the taxpayer is liable to fill in all the income details related to the previous financial year.

The Income Tax Department offers 7 different forms under the ITR form category to make it easier for themselves as well as the taxpayers.

ITR -1 Meaning

Income Tax Return 1 is an ITR form for a salaried person residing in India that has a financial income of up to Rs. 50 lakhs. Form 16 issued by the Income Tax Department is required by salaried individuals earning money from either a house property, job, or other sources as mentioned in the ITR form for individuals.

One of the key factors to remember before ITR filing for salaried employees is that all the taxpayers are required to link their Aadhar Card with their PAN card on the official website of the Income Tax Department.

Eligibility to File ITR - 1

ITR form for salaried individuals 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 races 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 2022 - 2023

• Any individual having an income of 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 ITR - 1.

• 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 to file the ITR1 form:

• An individual 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

ITR filing for salaried employees can be either done offline or online (electronically):

1. Offline Filing:

   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 an income of more than Rs.5 Lakhs and who does not have to claim any refund in his/her ITR.

   These people have to duly fill out a paper form or physical form. The IT department issues an acknowledgment at the time of physical paper return submission.

2. File Income Tax Return Online for Salaried Employees

   • 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 Aadhaar/ net banking/ EVC/ OTP.

   If a taxpayer submits their ITR1 form electronically, then the acknowledgment is sent to their registered email id. They can choose to download the ITR form for salaried persons 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 Bengaluru within 120 days after e-filing. Alternatively, they can e-verify their Income Tax Return form.

The Changes Made in the ITR – 1 Form for The Assessment Year 2021 – 2022

The major changes that are being incorporated in the ITR – 1 for the AY 2021 – 2022 are:

• The taxpayer is not allowed to file Income Tax Return for salaried employees if TDS is already deducted under Section 194N of the Income Tax Act, 1961.

• Under Section 194N, if the person withdraws an amount exceeding Rs. 20 lakhs with filing Income Tax Return online for salaried person, tax is deducted at the source. Also, if cash withdrawn is more than Rs. 1 crore in a financial year, the tax deduction is mandatory.

• Under Section 194N of the Income Tax Act, 1961, the taxpayer cannot carry forward the TDS.

• Old and new tax regime options are available to taxpayers, both Individuals, and HUFs. Form 10IE needs to be filed if the taxpayer opts for a New tax regime under Section 115BAC before filing ITR for a salaried person under Section 139(1).

The Changes Made in the ITR - 1 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 the ‘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.

The Changes Made in the ITR - 1 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 a 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 the 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 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 are 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): 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 ‘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 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.