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Introduction:

The Income Tax Department has categorized taxpayers into several groups based on their sources of income, aiming to simplify tax compliance. As part of this categorization, the Department has introduced various Income-tax Return Forms (ITR 1, 2, 3, 4, 5, 6, and 7) that individuals must utilize to declare their income and fulfill tax obligations. In this article, we will guide you about who should file ITR 1.

 ITR-1:

The ITR -1 form, commonly known as Sahaj, is the designated income tax return form tailored for Resident Indians who earn income through salaries and wages.

Eligibility: 

ITR 1 is specifically designated for Individuals who earn income up to ₹50 lakhs only from the following sources:

• Income from salary
• Income from other sources (excluding lottery winnings and income from racehorses)
• Income from one house property
• Income from Pension
• Interest from the Savings Accounts
• Interest from the Deposits
• Interest received on the enhanced compensation.
• Any other Interest Income
• In cases of clubbed Income Tax Returns, involving a spouse or a minor, inclusion is permissible only if their income falls within the specified limits mentioned above.

Not eligible to file ITR1:

ITR1 is not eligible for the incomes mentioned below.

• Income above ₹ 50 lakhs
• Non-residents and residents not ordinarily resident (RNOR).
• Individuals who have earned income from more than one house property.
• Income from Business and Profession
• Individuals claiming relief under the Income Tax Act for foreign tax paid or seeking double taxation relief under Section 90/90A/91.
• Income from Lottery, racehorses, legal gambling, etc.
• Agricultural income exceeding ₹ 5,000
• An individual who is either a company director or has owned unlisted equity shares at any point during the financial year.

Documents needed for filing ITR1:

You should keep the following documents handy while filing your Income-tax Return Sahaj (ITR1).

• PAN Card
• Form 16
• Form 16A
• Bank Statements or Passbooks
• Documents for Investments or Exemptions
• Form 26AS

Guide to File ITR1: 

Below is the step-by-step process for completing and submitting your ITR-1 Sahaj Form online:

• Visit the Income Tax Department website
• Register or Log in to your account   
• Go to the ‘e-File’ drop-down menu and choose ‘Income Tax Return’
• Select the assessment year and the submission mode
• To file a fresh ITR, click on the ‘Start New Filing’
• Select your applicable status, whether you are an individual/HUF/others, and click on ‘Continue’.
• Choose the ITR-1 Form to proceed further.
• Choose the reason for filing the ITR.
• Once the Income Tax Department accesses your information, you’ll receive your pre-filled return. Next, review and validate details in each section, including personal information, gross total income, total deductions, taxes paid, and total tax liability, to proceed further.
• Complete any details that were left unfilled previously.
• Verify the summary details of your ITR-1.
• Proceed with the payment of any required tax.
• Review and submit your ITR.
• After previewing and submitting the ITR, the Income Tax Department sends an acknowledgment. If you opt for electronic or online submission, the Department will send the acknowledgment to your registered email ID. If you don’t receive it via email, you can download it from the Income Tax website.

Precautions while filing ITR1:

To facilitate a smooth and hassle-free income tax return (ITR) filing process, it’s essential to follow specific steps. These steps include:

• Verify that all your details, such as PAN, permanent address, contact details, bank account information, etc., are accurate in the pre-filled data.

• Provide all necessary details in the return form, including total income, deductions (if any), interest (if any), taxes paid/collected (if any), etc. No documents are required to be attached with ITR-1.

• Submit your income tax return on or before the due date to avoid late filing fees, inability to carry forward losses, and potential loss of deductions and exemptions.

• After e-filing your return, it’s crucial to e-verify it to ensure successful submission. If you opt for manual verification, you can send a signed physical copy of the ITR-V Acknowledgement (via speed post) to the Centralized Processing Center, Income Tax Department in Bengaluru, Karnataka, within the specified timelines. This process confirms receipt and processing of your return by the relevant authorities.

• Select the appropriate return form, ranging from ITR-1 to ITR-7, based on your income sources and other relevant factors.

• Gather and meticulously review all pertinent documents such as bank statements/passbooks, interest certificates, receipts for exemptions or deductions, Form 16, Form 26AS, investment proofs, etc.

• Review the Annual Information Statement (AIS) and Form 26AS to confirm the accurate TDS/TCS/tax payments. Address any discrepancies by reconciling with the respective parties involved.

Penalty for Late Filing : 

According to Section 234F of the Income-tax Act, 1961, individuals may incur a penalty of up to ₹10,000 for filing their income tax return late, as outlined by the following due dates:

• If an income tax return is filed after December 31st, a penalty of ₹10,000 will be applied.

• A penalty of ₹5000 will apply to returns filed after the due date of July 31st but before December 31st of the relevant assessment year.

• For assesses with a taxable income of up to ₹500,000, a reduced penalty of ₹1000 will apply.

Conclusion:

The ITR-1 is the simplest form available for filing income tax returns. Named Sahaj, meaning ‘Simple’, due to its straightforward nature, this form is exclusively for individual taxpayers. Eligibility for filing ITR-1 is based on being a salaried employee within the income tax limit, rather than being a businessman or entrepreneur.