All About Form ITR-1 (SAHAJ) for AY 2020-21

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Basic

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

Standard

Income tax return filing for an individual with salary income of less than Rs.10 lakhs.

Premium

Income tax return filing for an individual with salary income of more than Rs.10 lakhs.

Any person falling under the purview of the Income Tax Act, 1961 has to pay tax on the income earned in a particular financial year. The person (commonly referred to as “assessee”) could be an individual, partnership, Hindu Undivided Family or any other business entity.

The categorization in taxpayers has been done to ease the compliances. Each category of taxpayer has to compute the taxable income in the manner as laid down in the Income Tax Act, 1961. Post computation, Income Tax Return is filed in the Form applicable to that category of taxpayer.

Who all can file Form ITR-1?

Form ITR-1 (also referred to as SAHAJ popularly) has to be filed by individuals who have an income of not more than INR 50 lakhs from the following sources in a financial year:

• Salary/Pension: Salary refers to the remuneration/consideration that a person receives for the services that he/she renders under a contract of employment. For an amount to be considered salary, the existence of employer-employee relationship is must. As per the Income Tax Act, 1961, the following are included in salary income:
  • Wages

Pension

• • Annuity
  • Advance Salary Paid
  • Leave Encashment
  • Fee, Perquisites, Commission, Profits in addition to or in lieu of Salary or wages
  • Transferred balance in recognized Provident Fund
  • Annual accretion to the recognized Provident Fund
  • Central Government Contribution or Employer Contribution to Pension account as mentioned in Section 80CCD of the Income Tax Act, 1961.
• One House Property (does not include those cases in which income has been brough forward from previous years): If the taxpayer I the owner of a property from which he/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 race horses)
• Agricultural Income (Up to INR 5,000)

Individuals who cannot file Form ITR-1

Form ITR-1 cannot be filed in the following cases:

• Income exceeds INR 50 lacs
• Agricultural income exceeds INR 5,000
• Taxable capital gains have been made
• There is income from business or profession
• There is income from more than one house property
• The individual is a Director of a company
• Investment in unlisted equity shares has been made
• The individual owns assets or has financial interest outside India or is the signing authority of an account located outside India
• The individual is a non-resident or not ordinarily resident
• Income of the individual is taxable in hands of another person
• The individual has claimed relief of foreign tax paid or double taxation under Section 90/90A/91 of the Income Tax Act, 1961
• If the taxpayer is joint-owner of a property, he/she cannot file Form ITR-1. In this case, the individual will have to file ITR-2.
• Form ITR-1 cannot be filed by individuals who have deposited over INR 1 crore in their bank accounts, have made expenditure of INR 2 lakhs on foreign travel, or paid electricity bill of over INR 1 lakh.
• In these cases, the taxpayer would be required to file Form ITR-4. In these cases, the taxpayer shall be required to file Form ITR-4.