In a move to make tax compliance easier, the income tax department has categorised taxpayers into many groups depending on income and the source of income.
Thus, one needs to file his/her tax accordingly.
“In this context, ITR-1, also known as Sahaj Form, is meant for a person with an income of up to Rs 50 lakh,” says Archit Gupta, founder and CEO, Clear, a tax portal.
ITR-1 can be filed by a resident individual whose:
§ Total income does not exceed Rs 50 lakh during the financial year
§ Income is from salary, one house property, family pension income, agricultural income (up to Rs 5,000/-), and other sources, which include:
1) Interest from savings accounts
2) Interest from deposits (bank/post office/co-operative society)
3) Interest from income tax refund
4) Interest received on enhanced compensation
5) Any other interest income
6) Family pension
§ The income of a spouse (other than those covered under the Portuguese Civil Code) or minor is clubbed (only if the source of income is within the specified limits as mentioned above).
ITR-1 cannot be filed by any individual who:
§ Is a Resident Not Ordinarily Resident (RNOR), and Non-Resident Indian (NRI) under the provisions of the Income-tax Act, 1961
§ Has total income exceeding Rs 50 lakh
§ Has agricultural income exceeding Rs 5,000/-
§ Has income from lottery, racehorses, legal gambling, etc.
§ Has taxable capital gains (short-term and long-term)
§ Has invested in unlisted equity shares
§ Has income from business or profession
§ Is a director in a company
§ Has tax deduction under Section 194N of the Income-tax Act, 1961
§ Has deferred income tax on ESOP received from employer being an eligible start-up
§ Owns and has income from more than one house property
§ Is not covered under the eligibility conditions for ITR-1
Following are the types of income that shall not form part of Form ITR-1:
§ Profits and gains from business and professions;
§ Capital gains;
§ Income from more than one house property;
§ Income under the head of sources which is of the following nature:-
1. Winnings from lottery;
2. Activity of owning and maintaining race horses;
3. Income taxable at special rates under Section 115BBDA or Section 115BBE;
4. Income to be apportioned in accordance with provisions of Section 5A