The CBDT had notified the New Income Tax Return Form 1 to Form 7 for the assessment year (AY) 2020-21. However, in this article we are going to discuss in details about ITR-1 (Sahaj), including the key changes made in ITR 1 for AY 2020-21. Income tax return filing is currently available only for those who wish to file ITR -1, ITR-2 and ITR-4 for AY 2020-21. The income tax department has informed that ITR-1, ITR-2 and ITR 4 for AY 2020-21 is available for e-Filing by downloading either excel or Java utility while other ITRs will be available shortly.
Eligibility to File ITR-1
ITR-1 is simplified one-page tax return form used most commonly by individual taxpayers. For FY 2019-20 (AY 2020-21) individuals who satisfies the following condition can use ITR-1 to file their return:
i) Individual should be resident.
ii) Total Income of the resident should not exceed Rs. 50 Lakhs.
iii) Income from salary and/or pension.
iv) Income from One House Property (excluding cases where loss is brought forward from previous years)
v) Income from Other Sources such as interest income, family pension etc. (excluding winning from Lottery and Income from Race Horses)
vi) Agriculture Income up to Rs. 5,000/- in a financial year.
In the case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income is limited to the above specifications.
Who Can Not file ITR-1?
i) An individual who is either a director in a company and has held any unlisted equity shares at any time during the financial year cannot use this form.
ii) Individual having income exceeding Rs. 50 Lakh.
iii) Residents not ordinarily resident (RNOR) and non-residents cannot file returns using ITR-1
iv) Individual who have earned income from following means can’t file ITR-1
a) More than one House Property
b) Business and Profession
c) Lottery, Race horses, Legal Gambling etc
d) Taxable capital gains (Short term and Long term)
e) Agricultural income exceeding Rs. 5,000
f) Individual who is a Resident and has assets (including financial interest in any entity) outside India or signing authority in any account located outside India.
g) Individual claiming relief of foreign tax paid or double taxation relief under section 90/90A/91.
The Income Tax Department has made it mandatory for all taxpayers to link the Aadhaar card with PAN on the Income Tax Department website.
Now it is mandatory to file return online. However, following person have the option to file the return offline i.e.in paper form:
1) An individual at the age of 80 years or more at any time during the previous year
2) An individual or HUF whose income does not exceed Rs 5 lakhs and who has not claimed any refund in the return of income
In offline, the return is furnished in a physical paper form and the Income Tax Department will issue you an acknowledgement at the time of submission of your physical paper return.
Changes in ITR-1 (Sahaj) for FY 2019-20 AY 2020-21:
1) The condition of the individual having income from salaries, one house property, other income and having total income up to Rs 50 lakhs continues
2) If you have taxable income as dividend from domestic companies, you are not eligible to file ITR-1 form.
2) Resident individuals who own a single property in joint ownership can also file ITR-1 where the total income is up to Rs 50 lakh
3) Taxpayers need to answer the following questions related to deposits in current accounts, foreign travel and electricity bills in all the ITR forms:
a) “Have you deposited amount or aggregate of amounts exceeding Rs. 1 Crore in one or more current account during the previous year?”
b) “Have you incurred expenditure of an amount or aggregate of amount exceeding Rs. 2 lakhs for travel to a foreign country for yourself or for any other person?”
c) “Have you incurred expenditure of amount or aggregate of amount exceeding Rs. 1 lakh on consumption of electricity during the previous year?”
4) in the new ITR forms, a new Schedule DI has been inserted to seek details of the investment, deposit and payments made during the extended period till June 2020 for claiming deduction under Chapter VI-A or for rollover of investment in the Financial Year 2019-20.
5) In ITR-1, Government employees have been bifurcated in State, Central Government and a new type as “NA” added to the list.
1) I am NRI having income of Rs. 6 Lakh only, Can I file ITR-1?
No, Residents not ordinarily resident (RNOR) and non-residents cannot file returns using ITR-1.
2) I am having LTCG, can I use ITR-1 to file return of income?
Yes, if you have taxable LTCG you may use other return form as applicable. However, if you have LTCG exempted under Section 10 (38) you need to report the same in ITR-1.
3) Do I need to include dividend income from Mutual Funds?
Yes. Dividend income from mutual funds is exempt under sec 10(35). It is to be shown in “7. Exempted Income: for Reporting Purpose”
4) Can I file ITR-1 with exempt agricultural income?
Yes. you can use ITR-1 if the agricultural income does not exceed Rs 5000.And If the agricultural income is more than Rs 5000, then you should file ITR 2.
Disclaimer: The above article is prepared for understanding & study purpose. We recommend you to consult your CA or tax consultant before choosing the correct Income tax return Form & author will not be responsible for any lose due to decision take on the basis of above article.