ITR-1 Form Filing

Overview of ITR-1 Filing in India

In India, filing an Income Tax Return is mandatory under the Income Tax Act, 1961. Filing your income tax return (ITR) is an important financial responsibility for every individual earning in India. The ITR-1 form, also known as "Sahaj," is a simplified tax return form designed for salaried individuals with basic income sources. Filing ITR-1 is essential for tax compliance, and it is necessary to avail of tax deductions under the Income Tax Act, 1961, and ensure a hassle-free financial future for the individuals as well as for entities.

When a tax return is filed accurately, it helps claim refunds, maintain creditworthiness, and avoid penalties. It is pertinent to note that with the digitisation of tax filing, the entire process of tax filing has become easy and accessible, which has allowed the taxpayers to complete their returns online efficiently. Filing your ITR on time also helps speed up the processing of tax refunds. It acts as valid proof of income for various activities like application for a loan and visa processing. Understanding ITR-1, its eligibility criteria, required documents, and common filing mistakes can help taxpayers avoid penalties and ensure a smooth filing experience.

Choosing a reliable tax expert like Kanakkupillai ensures accuracy and compliance, making the entire process seamless and stress-free.

What is ITR-1 Form?

The ITR-1, also known as the ‘Sahaj’ form, is specifically designed for individuals earning income from salary, pension, or other simple income sources. It is a tax return form for salaried individuals whose total income does not exceed ₹50 lakhs.

Benefits of Filing ITR-1 Form

Filing ITR-1 is not merely a mandatory compliance, it has advantages, such as:

• Ensure Legal Compliance: Filing your tax return on time makes sure that you stay compliant with Indian tax laws and avoid unnecessary penalties.
• Claim Tax Refunds: If excess tax has been deducted from your income, filing ITR-1 can help you get a refund from the Income Tax Department.
• Proof of Income: An ITR serves as valid proof of income for loan, credit card, and visa applications.
• Avoid Penalties: Filing tax returns late can result in hefty penalties; filing on time saves your money.
• Carry Forward Losses: Filing an ITR helps carry forward losses to the next financial year, reducing future tax burdens.
• Avoid Scrutiny: Regular and correct filing of ITR prevents unnecessary scrutiny and audits from the Income Tax Department.

Eligibility Criteria to File ITR-1

Following is eligible to file ITR-1 Return in India:

• Individuals earning up to ₹50 lakhs per annum.
• Individual income sources should be limited to salary/pension, a single house property, and other sources like interest or dividends.
• Agricultural income should not exceed ₹5,000.
• The individual should not have income from capital gains, business, or multiple house properties.
• The taxpayer should not be a director in any company or hold unlisted equity shares.
• The individual should not own assets or have financial interests outside India.

Who Cannot File ITR-1?

• Income from business or profession: If you earn income from a business or profession, even if it is small, you are not eligible to file ITR-1. You need to file a different form, like ITR-3.
• Income from more than one house property: If you have rental income from more than one house property, ITR-1 is not for you. You would need to use another form, like ITR-2.
• Income from capital gains: If you earned money from selling assets like shares, property, or bonds, capital gains, ITR-1 is not for you. You will need to file a different form (like ITR-2 or ITR-3).
• Foreign income: If you have any income from abroad, ITR-1 is not applicable. You would have to file a form like ITR-2 or ITR-3, depending on the details of your income.
• Agricultural income above ₹5,000: If your agricultural income exceeds ₹5,000, you can't file ITR-1. You will need to use a different form like ITR-2.
• Director in a company: If you are a director in a company, you cannot file ITR-1, even if your income is just from salary. You would have to file ITR-2.
• More than one source of income: If you have income from multiple sources (other than salary), like from both salary and business or both salary and capital gains, you cannot file ITR-1.
• Any gain from Virtual Digital Assets such as Crypto Currency.
• If the tax has been deducted under Section 194N of the Income Tax Act, 1961.
• Deduction of the tax has been deferred on the ESOP
• Individuals who have claimed relief for paying foreign tax or double taxation relief under Section 90/90A/91 of the Income Tax Act, 1961.

Checklist for Filing ITR-1 Form

Before you proceed with filing your ITR-1, ensure you have the following documents:

• Form 16 from your employer (salary details & TDS deductions).
• Form 26AS (tax credit statement reflecting TDS & advance tax paid).
• Bank account details (for refund processing and reporting interest income).
• Aadhaar-PAN linking confirmation.
• Investment proofs (PPF, ELSS, LIC, FD, etc., for tax deductions under 80C, 80D, etc.).
• Rental income details (if applicable) along with rent receipts.
• Home loan statements (if claiming tax benefits on home loan interest/principal repayment).
• Interest income certificates (from savings accounts, deposits, etc.).
• Dividend and other earnings statements.
• Medical insurance premium receipts (for deductions under Section 80D).