ITR-1 Return Filing

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ITR-1 Return Filing

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Income tax return filing for an individual with salary income of less than Rs.5 lakhs.

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ITR 1 Filing Form

The Income Tax Department has categorized the taxpayers into the group to ease the tax compliances this categorization is done based on the income and the sources of the income. ITR 1 Return filing in India is for people with an income of up to Rs.50 lakh.

This article is a comprehensive guide to understand the ITR 1 Sahaj Form. Each category of the taxpayer has to compute the taxable income as it is laid down in the Income Tax Act,1961. Post computation it is necessary for the taxpayer to file the Income Tax Returns.

Who can file ITR 1 Sahaj Form?

ITR 1 Sahaj Form is for individuals that have income up to Rs.50 lakh lakhs. The individuals earning income from the following sources can file ITR 1 Sahaj Form:

  • Salaried person- Salary refers to the remuneration or consideration that a person receives for the services he or she has to render under the contract of employment. The Income Tax Act,1961 includes the following under the salary income
  • Wages
  • Pension
  • Annuity
  • Advance salary paid
  • Leave Encashment
  • Fee, prerequisites, commission, profits besides or in lieu id the salary or wages
  • Transferred balance in recognized provident fund
  • Annual accretion to the recognized provident fund
  • Central Government contribution or an employer contribution to Pension account as mentioned in Section 80 CCD of the Income Tax Act.
  • One house property: If the taxpayer is the owner of a property from which he or she is earning rent, the rent proceeds become taxable.
  • However, if the taxpayer is using the owner of a property from which he or she is earning rent, the rent proceeds become taxable. However, if the taxpayer is using the property for running some business or profession the same would be taxable under the heading “Income from business or profession”.
  • Other sources (does not include income earned from winning lottery or racehorses)
  • Agricultural income (Upto to Rs. 5000)

Who cannot file ITR 1 Sahaj Form?

ITR 1 Sahaj Form cannot be filed by the following:

An individual with an income of more than Rs.50 lakh cannot use this ITR 1 Sahaj 1 Form.

An individual who is a Director of a Company and has held unlisted equity shares during the financial years cannot use this form.

Residents who are not ordinary residents and non-residents also cannot file ITR 1 Sahaj Form.

Individuals who earned income through the following sources cannot file ITR 1 :

  • House property more than one
  • Lottery, Racehorses, Legal Gambling, etc.
  • Taxable capital gains ( Both short term and long term)
  • Agricultural Income when it exceeds Rs. 5,000
  • An individual who is a resident of India and has assets outside India or the signing authority in any account based out of India
  • Individuals claiming relief of foreign tax paid or double taxation relief under Section 90/90A/91.

Documents required to file ITR 1 Sahaj Form

What documents are required to file ITR 1 Sahaj Form?

  • Form 16
  • Salary slips
  • Interest Certificates from the Post offices and Banks
  • Form 16A/16B/16C
  • Form 26AS
  • Tax saving investment proof
  • Deduction under the Section 80 D to 80 U
  • Home Loan statement from the NBFC or the Bank
  • Capital Gains.

The income Tax rate under the Existing Tax Regime and the New Tax Regime ( For TDS return Filing)

The taxpayers now have an option to choose between the old and the new tax regimes. The decision of opting for a tax regime has to be taken at the beginning of the financial year.

The income tax rates according to the old tax regime are:

For individuals up to the age of 60 years

Taxable IncomeIncome Tax Rate
Up to INR 2,50,000Nil
INR 2,50,000 – INR5,00,0005%
INR 5,00,000 – INR 10,00,00020%
Above INR 10,00,00030%

For individuals aged between 60-80 years (Senior Citizen)

Taxable IncomeIncome Tax Rate
Up to INR 3,00,000Nil
INR 3,00,000 – INR5,00,0005%
INR 5,00,000 – INR 10,00,00020%
Above INR 10,00,00030%

For individuals above the age of 80 years ( Super senior citizens)

Taxable IncomeIncome Tax Rate
Up to INR 5,00,000Nil
INR 5,00,000 – INR 10,00,00020%
Above INR 10,00,00030%

The new tax regime is where the taxpayer has an option to choose either to pay taxes at a lower interest rate as per the new tax regime on the condition that they forgo certain permissible exemptions and deductions that are available the income tax.

or

The taxpayer can continue paying taxes under the existing tax rates. The assessee can avail of the rebates and the exemption by staying in the old regime and pay taxes at the existing high rates.

The income tax rates under the new tax regimes that is applicable for individuals and the HUFs is as follows:

Income SlabNew regime tax slab rate(Applicable for all individuals and HUF)
Up to INR 2,50,000NIL
INR 2,50,000 – 3,00,0005% (Tax rebate u/s 87 a is available)
INR 3,00,000 – 5,00,000
INR 5,00,000 – 7,50,00010%
INR 7,50,000 – 10,00,00015%
INR 10,00,000 – 12,50,00020%
INR 12,50,000 – 15,00,00025%
More than INR 15,00,00030%

Note:

The tax rates in the New Tax regime are the same for all categories of individuals. Hence, there is no increased basic exemption limit benefit that will be available to the senior and the super senior citizens in the New Tax Regime.

Individuals with Net Taxable Income less than or equal to Rs 5 lakh will be eligible for the tax rebate u/s 87 A the tax liability will be Nil for such individuals in both New and Old existing tax regimes.

The exemption limit for NRIs is Rs. 2.5 lakh irrespective of age.

Additional health and education cess at the rate of 4% will be added to the Income-tax liability in all cases ( Increased from 3% since FY 2018-19)

An applicable surcharge as per tax rates below in all categories mentioned above:

  • 10% of the income tax if total income > Rs. 50 lakh.
  • 15% of the income tax if the total income > Rs.1 crore
  • 25% of the income tax if the total income > Rs.2 crore.
  • 37% of the income tax is the total income > Rs.5 crore.

What are the conditions to opt for a new tax regime?

The taxpayer opting for concessional rates in the new tax regimes has to forgo the exemptions and the deduction that is available under the old tax regime. In total 70 deductions are allowed out of which the most commonly used are listed below:

The list of common exemptions and deductions that are not allowed in the new Income tax regime are:

  • Leave travel Allowance
  • House Rent Allowance
  • Conveyance Allowance
  • Daily expenses in the course of employment
  • Relocation Allowance
  • Helper Allowance
  • Children Education Allowance
  • Other Special Allowances [Section 10(4)]
  • Standard deduction on salary
  • Professional tax
  • Interest on housing loan (Section 24)
  • Deductions under Chapter VI A deduction (80C, 80D, 80E and so on) (Except Section 80CCD (2))

List of common deductions allowed the New Tax Regime

  • Transport allowance for specially-abled people
  • Conveyance allowance for expenditure incurred for traveling to work.
  • Investment in Notified Pension Scheme under Section 80 CCD(2)
  • Deduction for the employment of new employees under Section 80JJAA
  • Depreciation u/s 32 of the Income Tax Act except for additional depreciation.
  • Any allowance for traveling for employment or on transfer.

Major Amendments to ITR 1 filing for the AY 2021-2022

The following changes are incorporated in the ITR Form:

  • The taxpayer will not be able to file ITR 1 Form if the TDS is deducted under Section 194N. According to this, the tax shall be deducted at the source if the non-filters of the income tax return withdraw cash if exceeding the amount Rs.20 lakh. In other cases, tax shall be deducted if the cash withdrawals exceed Rs.1 crore in a financial year.
  • There is no option is given to carry forward the TDS under Section 194N. The credit of TDS under section 194N. The credit of the TDS under section 194N should be allowed only during the year in which the TDS was deducted.
  • Individuals or HUFs get an option to select old or new tax regimes. If the taxpayer selects the new tax regime under Section 115 BAC, he needs to file form 101E before filing the Income Tax Returns under Section 139(1).
  • The ITR Forms of the assessment year 2020-2021 were modified by including the new schedule DI. It has allowed taxpayers to avail the deduction that is made during the extended period for the AY 2020-21. The Schedule DI is removed from AY 2021-22.

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