Filing ITR 1-Form: Income tax is a direct form of tax levied by the Government on the income of its citizens. Income tax acts as a crucial source of revenue for both the State and the Central Government. All the proceeds of the income tax thus collected are utilised against different kinds of public welfare activities. Every citizen of India is liable to pay the tax on his/her income as per the Income-tax act.
To pay income tax, people have to file returns under various forms. The income tax act prescribes different forms for different tax-payers such as individual, Hindu Undivided Family, firm, etc. It also prescribes forms for the nature of income of the tax-payers, such as income from business or salary, etc.
A person can file a tax return only when his/her Gross Total Income after deductions is more than exempted income limit set by the Government as per the Income Tax act.
As we know, there is a different ITR form for every group of the taxpayer, so in this article, we will discuss ITR form 1, the structure of ITR form 1, and the process of filing ITR form 1.
Table of Content
Income Tax Return Form 1 is one of the many forms for filing an IT return. It is also called Sahaj, which is a Hindi word meaning easy in the English language. It is named Sahaj because it is the easiest form for filing an IT return. ITR form 1 is only for individual taxpayers having an annual income of up to ₹50 Lakhs. Individuals who have incomes from salary, one house property, and income from other sources can only use ITR Form 1 to file returns. Other than this, if a person or individual has an income from any other source such as business or profession, he/she cannot use the ITR Form 1 to file an income tax return.
The following points describe how tax is filed under ITR form 1:
- Income from Salary: For income from salary, the tax-payer must provide proof which is form 16. He/she can also claim TDS, which is updated in form 26AS.
- Income from Other Sources: Income from other sources can be interest from a savings bank account or fixed deposit account. For fixed deposits, the TDS deducted by the bank is updated in form 16A.
- Chapter VI A Deductions: In this part of the ITR form, it describes all the deductions claimed by the taxpayer under VI A. If a taxpayer has invested in a public fund or an insurance policy, he/she can claim deductions here. For example, if a person has invested in Public Provident Fund, he/she can claim deductions under 80C of the income tax act. Other deduction can be claimed under 80CCC, 80CCD(1), 80CCD(1B), 80CCD(2), 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80GG, 80GGC, 80U, etc.
The ITR form 1 has been divided into seven different sections. Each section requires different information to be filled in for tax computation. Let’s have a look at each of the seven sections of ITR form 1.
Part A – General Information
Part A of the ITR form 1 deals with all the general information of the taxpayer. It includes Name, Address, Mobile Number, PAN number, E-mail Address, Aadhaar Number, Nature of employment, including Government employee, PSU, Pensioners, or Other.
A taxpayer must take into account that each information such as name, PAN number and other details must be filled in by him/her correctly.
Part B – Gross Total Income
The ITR form 1 is only applicable for taxpayers whose source of income is salary. According to the income tax act, an income can only be categorised under income from salary, only if there exists a relationship of employer and employee between the payer and the payee. Under the income tax act, the word salary includes basic salary, wages, gratuity, advance salary, commission, leave encashment, any annuity, perquisites in addition to salary, and retirement benefits. The Part B of ITR form 1 is again sub-divided into several categories, which include:
- Part B1: Under section B1, Employers details, including TAN, Name, Nature of business, and Address, is to be filled. This section also includes salary details, allowances that are exempted, and the value of perquisites. It also shows net salary received and deductions under section 16.
- Part B2: Section B2 of Part B shows gross rent received, tax paid to local authorities, Annual value, interest payable on borrowed capital.
- Part B3: In section B3, the total deductions received by the taxpayer is described.
- Part B4: Part B4 describes the addition of part B1, B2, and B3, which is Gross Total Income.
Part C – Total Deductions Under VI-A and Total Taxable Income
Part C of ITR form 1 reveals the total deduction claimed and the taxpayer’s total taxable income. It shows all the deductions claimed including deductions under, 80CCC, 80CCD(1), 80CCD(1B), 80CCD(2), 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80GG, 80GGC, 80U.
One can compute the Total Taxable Income by subtracting the total deductions from Gross total income.
Part D – Computation of Tax Payable
Part D of the ITR form 1 shows the computation of total tax payable by the Taxpayer. It includes the following:
- Tax Payable on Total Income
- Rebate Under section 87 A
- Tax after rebate
- Cess on Tax after rebate
- Total Tax and Cess
- Relief Under section 89 (1)
- Interest Under section 234 A
- Interest Under section 234 B
- Interest Under section 234 C
- Fee Under section 234 F
- Total Tax, Fee, and Interest
- Total Tax Paid
- Net Amount Payable
- Exempted Income
Part E – Bank Details
Part E of ITR form 1 covers all the banking details of the taxpayer including, the Name of the Bank, Account Number, Name Account Holder, and the IFSC code of the Bank branch.
Schedule IT section of ITR form 1 deals with the details of advance tax paid and self-assessment of tax of the taxpayer. It includes BSR code, Date of Deposit, Serial number of Challan, and Tax amount paid.
The section deals with the details of Tax Deducted At Sources and Tax Collected At Source. It includes details such as TAN of the Deductor, Name of the deductor, Gross Payment, and Year of tax deduction.
People often commit mistakes while filling in details in ITR forms. To clear all the doubts and misunderstanding regarding ITR form filling, we have mentioned below some key points to keep in mind:
- One must fill in all the details as per the instruction in the form, and else the IT department would reject the return statement. A person must fill in the PAN number and Aadhaar Number correctly to avoid rejection of the form.
- If a person finds any of the items mentioned in the form as inapplicable, he/she must write or choose -NA-, against the item.
- To denote nil figures, always write or choose “Nil”.
- For negative figures, one must fill the “-” minus sign before writing the figure.
- Always keep in mind that all the figures must be rounded off to the nearest one rupee.
In The End
Income Tax serves as an essential source of revenue for the government to fund many welfare activities for the Public. We must file our income tax return on time to avoid a late fee. If you are an individual and employed in an organization, you can opt for ITR Form 1 to file a return easily.