ITR 1 Form (also known as Sahaj) is one of the most popular form for filing Income Tax Returns because it applies to most of the Salaried Employees. However, it does not apply to all categories of Salaried Employees as some of the Salaried Employees are required to submit their returns in ITR Form 2.
- Recommended Read: Which Income Tax Return Form should you use?
This article focuses on mainly on ITR 1 and queries related to ITR 1 like the category of taxpayers eligible/ non eligible to file ITR 1, Last Date for Filing ITR 1, Manner and Procedure of filing ITR 1, ITR Signing and Verification etc.
ITR 1 is a 1 Page Return Form and is the most simplest Income Tax Return Forms as it is easy to furnish without any complications. However, if a salaried employee is not eligible to furnish ITR 1 Form, he should furnish his income tax return in ITR 2 Form. (Recommended Read: All about ITR 2 Form).
Eligibility to use ITR 1 Form in 2017
All Individuals cannot use ITR 1 Form for filing their income tax returns and only those taxpayers can use this form whose income includes any of the following:-
1. Income from Salary/ Pension
If your employer has paid you any salary/pension which would be taxable under “Income from Salaries”, you can use this ITR 1 Form.
2. Income from 1 House Property
This form can be used for ITR filing if the taxpayer has earned rental income from House Property. However, the law specifically states 1 house property. So in case you have income arising from more than 1 house property, you are not eligible to use this ITR Form 1.
Moreover, if you have loss arising under head Income from House Property, which has been brought forward from the previous financial year, you are not eligible to use ITR Form 1.
It is pertinent to note here that Income from House Property means Rental Income and does not include the Gains which arise from sale of Property. Gains on sale of Property are taxable under head Capital Gains and this form cannot be used for disclosing Capital Gains Income.
Moreover, although the word used is House Property – it covers rent arising from all types of properties whether Residential or Commercial or Industrial or Institutional or of any other nature.
There may also be cases wherein there is loss under head House Property because the Interest paid on Home Loan is more than the Rental Income received. In such a case, the taxpayer would be required to disclose loss under head House Property which would then be set-off against income from all other sources.
The current year loss under head House Property can be disclosed in ITR 1. However, in case the taxpayer has loss under head house property which has been brought forward from the previous year, the taxpayer is not allowed to use ITR 1.
3. Income from Other Sources
If you have income arising from other sources like Interest Income, Dividend Income etc. you can use this form for submitting your annual tax returns.
It is important to note that this form cannot be used in case of income arising from winning from lottery or from income from race horses.
Moreover, if in case the Income of some other person like spouse, minor child etc is being clubbed with the Income of the taxpayer, this form can be used only if the income being clubbed falls into the above income categories.
Who cannot use this ITR Form 1 in 2017?
The following class of Individuals have been specifically excluded from using this ITR Form 1. Therefore, taxpayers having income from any of the following sources are not eligible to use this form:-
- Total Income is more than Rs. 50 Lakhs in a Financial Year.
- Income from more than 1 house property
- Income from winning from lottery or income from Race horses
- Dividend Income of more than Rs. 10 Lakhs in a financial year received from a Domestic Company on which tax is levied under Section 115BBDA
- Income of the nature as referred to in Section 115BBE
- Income under head capital gains whether Long Term Capital Gains or Short Term Capital Gains (Recommended Read: Computation of Capital Gains Tax)
- Agricultural income in excess of Rs 5000
- Income from any Business or Profession
- Loss under head – Other Sources
- Person claiming relief of foreign tax paid under Section 90 or 90A or 91
- Any resident having any asset (including financial interest in an entity) located outside India or signing authority in an account located outside India
- Any resident having any Income from any source outside India
Obligation to file ITR 1 in 2017
Every Individual or HUF whose total income before allowing deductions under Chapter VI-A of the Income Tax Act, exceeds the maximum amount which is not chargeable to tax (i.e more than Rs. 2.5 Lakhs for the Financial Year 2016-17) is mandatorily required to file his ITR.
Deductions under Chapter VI-A include Deduction under Section 80C, Section 80CCD, Section 80D, Section 80DD, Section 80U, Section 80DDB, Section 80E, Section 80G, Section 80TTA, Section 80GG, Section 80GGA etc
These Deductions shall be claimed in Part C of the ITR 1 Form. There is a specific place to disclose Deductions under Section 80C, Section 80D, Section 80G & Section 80TTA. All other Deductions shall be claimed in ITR 1 as other Deductions.
Due Date for filing ITR 1 Form
As taxpayers filing their returns in ITR 1 Form are not required to prepare accounts and get them audited, the due date for filing ITR 1 Form is 31st July of the next financial year for which the return is being filed.
Therefore, if ITR 1 Form is being filed for the financial year 2016-17, the due date of submitting ITR 1 Form would be 31st July 2017. The Due date would similarly be calculated for other years as well.
In case a taxpayer fails to furnish his return before 31st July 2017, he can file a Belated Return till 31st Mar 2018 but interest would be levied in such a case.
Manner of filing ITR 1 Form in 2017
The ITR 1 Form is required to be submitted online by the taxpayer in any 1 of the following ways
- By furnishing a return in a physical paper form (Download ITR 1 PDF Form).
- By furnishing the return electronically under digital signature
- By transmitting the data in the return electronically under Electronic Verification Code.
- By transmitting the data electronically and then thereafter submitting the verification of the return in Return Form ITR-V
Only 2 category of taxpayers are allowed to file ITR 1 in physical form. These 2 categories of people are mentioned below:-
- An Individual of the age of 80 years or more at any time during the previous year
- An Individual whose income is not more than Rs. 5 Lakhs and no refund is claimed in the Income Tax Return.
Procedure for filing ITR 1 online
For the purpose of furnishing ITR Form 1, a taxpayer is first required to create an account on the income tax website. This is a one-time process and once the account has been created, the user can login to the same account every year.
After logging in, the user can either submit the details online or can download the ITR Java Utility software/ Excel Utility Software and then submit his return through this ITR Java Utility/ Excel Utility.
- Recommended Read: Procedure for e-filing Income Tax Returns online
Apart from the normal excel utility for online filing, the Income Tax Dept has also released a new Java utility with many new upgraded features like direct upload from the utility, better interface etc.
- ITR 1 Java based Utility for 2016
- ITR 1 Excel Utility for 2016
- ITR 1 PDF File for Manual Filing in 2017
Verifying/ Signing the ITR
Income Tax Return filed by the taxpayer is not treated as valid till the time it is verified by the taxpayer by signing the return. The taxpayer has the option to e-verify his Income Tax Return either at the time of uploading of ITR online or do the same after uploading. The taxpayer shall verify the return within 120 days from the date of filing. In case the taxpayer fails to verify the return, the ITR filed online would be treated as invalid.
The taxpayer can verify the Income Tax Return through the following 3 methods:-
- By verifying the ITR offline by manually signing it
- By verifying the ITR online through his Digital Signature
- By verifying the ITR online through EVC
Method 1: Verifying offline by manually signing it
If the taxpayer intends to verify his ITR by manually signing it, he shall take a print out of the ITR V, sign it and send it by normal post or speed post to Post Bag No.1, Electronic City Post Office, Bengaluru, Karnataka – 560100.
Method 2: Verifying online through Digital Signature
The taxpayer can link his Digital Signature to his Income Tax Return and sign the Income Tax Return through his Digital Signature. (Recommended Read: How to sign ITR through Digital Signature)
Method 3: Verifying online by generating EVC
Very few people in India have a Digital Signature and therefore the Income Tax Department has introduced the option of signing the ITR online through Electronic Verification Code – EVC without the use of Digital Signature. EVC is a code which is required to be furnished by the taxpayer to sign the ITR.
This EVC is a code which is sent to the Mobile No./ Email id of the taxpayer and is required to be furnished by the taxpayer for signing the ITR. The taxpayer can generate the EVC through any of the following methods:-
- Through Net Banking
- Through Demat Account
- Through Bank Account No.
Method 4: Verifying through Aadhaar OTP
The taxpayer can also verify the Income Tax Return by creating an OTP through Aadhaar. If the Aadhar is linked with the PAN Card (mandatory for return filing from 1st July 2017 onwards), the taxpayer can request for generation of OTP. The OTP would be sent to the registered mobile number of the taxpayer and he would be required to furnish this bank account number for verifying the Income Tax Return.
Other Relevant Points
- No Annexure for any other document like Form 16/ Form 16A/ Form 26AS/ Form 16B etc should be attached with this ITR 1 Form.
- In case you are filing the ITR 1 Form physically, the income tax department will issue an acknowledgement at the time of submission of the physical paper return.
- In case any excess TDS has been deducted, the taxpayer can claim refund of the extra TDS Deducted by filing ITR 1.
- It is mandatory for all taxpayers to furnish the Bank details in all circumstances irrespective of whether any income tax refund is due or not.
- The taxpayer shall mention the details of all bank accounts in his name i.e. the Bank Name, Bank Account Numbers and IFSC Code of the Bank. However, it is not necessary to file details of bank accounts which have been dormant for more than 3 years.
- In case of Joint Bank Account, the details shall be furnished in the ITR of the 1st owner.
- Even if the Income is exempt from levy of tax, it is required to be disclosed in the Income Tax Return. Even though Capital Gains are not allowed to be disclosed in ITR 1, but exempt Long Term Capital Gains under Section 10 (38) are allowed to be disclosed in ITR 1. These are gains which arise on sale of Shares/ Mutual Funds which were held for more than 1 year. There is a specific column in ITR 1 for disclosing exempt income under Section 10(38).
- The Dividends received from Companies are also exempted from the levy of Income Tax. However, these are also required to be disclosed in the Income Tax Return under Section 10(34). Such dividends are not required to be disclosed under head Other Sources but shall be disclosed as Exempt Income under Section 10(34).
- If there is any mistake in filing the Income Tax Return, the taxpayer has the option to Revise the return. The return can be revised within 1 year from the end of Relevant Assessment Year. In other words, for the financial year 2016-17, the assessment year would be 2017-18 and the return can be revised at any time before 31st March 2019. However, it is important to note here that the return can be revised only if the original ITR 1 was filed on or before the due date which is 31st July 2017 in the above mentioned case.