Filing income tax returns (ITR) is an essential responsibility for salaried individuals in India. The ITR-1 form is specifically designed for individuals with income from salary, pension, or interest. This article aims to provide a step-by-step guide to help salaried individuals file their ITR-1 accurately and efficiently.
Who is eligible to file ITR-1 for FY2023-24 (AY2024-25)?
ITR-1 is a simplified one-page form for individuals receiving income of up to Rs 50 lakh from the following sources :
- Income from salary/pension
- Income from one house property (excluding cases where loss is brought forward from previous years)
- Income from other sources (excluding winning from the lottery and income from race horses)
- 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.
Aadhaar Card is mandatory for income tax return filing: The income tax department has made it mandatory for all taxpayers to link their Aadhaar card with their PAN on the income tax department website.
Who cannot file ITR-1 for AY 2024-25?
- An individual with an income above Rs 50 lakh.
- An individual who is either a director of a company or has held any unlisted equity shares at any time during the financial year.
- Residents not ordinarily resident (RNOR) and non-residents.
- Individuals who have earned income through the following means:
- More than one house property
- Lottery, racehorses, legal gambling, etc.
- Taxable capital gains (short-term and long-term)
- Agricultural income exceeding Rs 5,000
- Business and profession
- A resident that has assets (including financial interest in any entity) outside India or is a signing authority in any account located outside India
- Individuals claiming relief of foreign tax paid or double taxation relief under section 90/90A/91
- Deferred income tax on ESOP received from an eligible start-up
How to file ITR-1 (SAHAJ) Online on Income Tax Portal
Step 1 – Visit the Income Tax e-filing portal’
Step 2 – Register or Log in to your account
Step 4 – Select e-file > Income Tax Returns > File Income Tax Return
Step 5 – Select the Assessment Year as 2023-24 and the mode of filing as ‘Online’
Step 6 – Click on ‘Start New Filing’
Step 7 – Select the applicable status
Step 8 – Select ITR-1 as form type
Step 9 – Click on ‘Let’s Get Started’
Step 10 – Select the appropriate reason and ‘continue’
Step 11 – Now you will have to fill up 5 sections here
- Personal Information – This section requires you to provide basic details such as your full name, PAN and Aadhar number, contact information, and bank account details.
- Gross Total Income – In this section, you need to enter and verify income from all the sources like salary pension, house property, and other sources (such as interest income, family pension, etc.). Additionally, you need to provide details of any exempt income, if any
- Total Deductions – The Income Tax Act 1961 allows for various deductions under different sections, which you should claim accordingly. Commonly known sections for deductions include 80C, 80D, 80TTA, 80TTB, and others.
- Tax Paid – This section displays the tax payments you have made from all sources, including TDS, TCS, Advance Tax, and Self-Assessment Tax.
- Total Tax Liability – In this section, you will find the computed tax liability based on the information provided in the previous sections. To clarify, the tax payable on the Total Income is calculated as (Income – deductions claimed – Tax paid till date). If the resulting amount is negative, it can be claimed as a refund. If it is positive, it needs to be paid as tax.
Step 9 – Double-check to ensure the summary of tax computation is correct
Step 10 – Rectify the errors, if any and complete the validation
Step 11 – E-verify the ITR
What are the documents needed to file ITR?
Documents which you need to file the ITR-1 form are:
- Form 16: Issued by all your employers for the given financial year
- Form 26AS: Remember to verify that the TDS mentioned in Form 16 matches the TDS in Part A of your Form 26AS
- Receipts: If you have not been able to submit proof of certain exemptions or deductions (such as HRA allowance or Section 80C or 80D deductions) to your employer on time, keep these receipts handy to claim them on your income tax return directly.
- PAN card
- Bank investment certificates: Interest from bank account details – bank passbook or FD certificate
Significant changes made in the ITR-1 Form for AY 2024-25
Some changes have been incorporated into the ITR-1 form:
- Under the schedule ‘Salary’, you can disclose income from retirement benefit accounts maintained in the notified country under Section 89A, and claim relief for the same.
- Pensioners must now select the ‘Nature of employment’ (Central government, state government, public sector unit and others).
- You can now claim relief for the taxes paid on the income from the retirement benefit account m
Penalty for Late Filing Income Tax Return
Taxpayers who do not file their income tax return on time are subject to penalty and charged an interest on the late payment of income tax. Also, the penalty for late filing income tax return on time has been increased recently. The penalty for late filing income tax return is now as follows:
FAQs
Q: Can I file ITR-1 with exempt agricultural income?
Yes, you can file ITR-1 if the agricultural income does not exceed Rs 5,000. If the agricultural income exceeds Rs 5,000, you should file ITR 2.
Q: How to report bank accounts in ITR-1?
You must provide details of all the savings and current accounts held at any time during the previous year. However, it is not mandatory to provide details of dormant accounts that haven’t been operational for more than three years. The account number should be as per the Core Banking Solution (CBS) system of the bank. It is to be provided in Part E – other information of the ITR form.
Q: Do I need to include dividend income from mutual funds?
Yes, dividend income from mutual funds is now taxable in the hands of investors. It is to be shown in ‘Other Income’.
Q: While filing ITR-1 should Interest Income be shown in ‘Income from Other Sources’ if TDS has already been deducted?
Yes, you should always include Interest Income under ‘Income from Other Sources’, even if the bank has deducted tax.
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