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ITR 1: Sahaj Form

The Income Tax Department has divided people into groups based on their income and the source of their income in order to make tax compliance easier. ITR-1, often referred to as the Sahaj Form, is for individuals with incomes up to ₹50 lakh. Based on inco

  • 17,619 Views | Updated on: Mar 12, 2024

Based on income and its sources, taxpayers are categorized into multiple groups as per the Income Tax (IT) Department. The department offers different types of forms, and you need to choose the accurate one to file your returns.

The ITR 1 filing is an important form that is used by taxpayers whose income is less than ₹50 lakh per annum to file their income tax returns. Also known as the ITR Sahaj, below is an overview of what this form comprises.

Who is ITR-1 for?

The ITR-1 form is a one-page document that is considerably simpler. If you’re unsure whether you qualify for an ITR-1, know that your income must come from one of the following sources:

  • Earnings from a job or a pension
  • Income from a single property, a house
  • Earnings from unrelated sources
  • For people with incomes under ₹50 lakhs

If only the aforementioned eligibility is met, ITR-1 filing for clubbed income tax returns with a spouse or minor included can proceed.

Major changes in ITR-1 for FY 2023-24

In India, a new fiscal year officially begins on April 1. As a result, several income tax regulations that were previously stated as part of the yearly budget presentation are now being put into effect. Some significant changes have occurred in the new fiscal year (FY23), which runs from 2022 to 2023. These adjustments include taxing cryptocurrency revenue, requiring older citizens to file ITRs, taxing PF accounts, and more.

  • Tax on cryptocurrency asset earnings
  • ITR 1 filing exemption for seniors 75 years of age and older
  • TDS on business-related benefits
  • Interest on PF accounts is taxable
  • Losses from virtual digital assets offset by gains
  • State government employees’ NPS deduction
  • Submitting revised ITRs
  • Affordable housing buyers receive no further tax breaks

Overview of ITR 1

The form comprises the following parts:

Part A: General Information

Part B: Gross Total Income

Part C: Deductions and Taxable Total Income

Part D: Computation of Tax Payable

Part E: Other Information, such as details of tax deducted at source (TDS), advance or self-assessment tax, and verification

What is the Eligibility Criteria to file ITR 1?

The ITR Sahaj is a single-page form used by individual taxpayers whose income is below ₹50 lakh, which is earned as salary or pension, earnings from single house property and other sources excluding racehorse wins or lotteries. If an individual taxpayer clubs the income of his spouse or minor child, it is allowed only if his earnings adhere to the aforementioned conditions.

Which Taxpayers Cannot Use ITR1?

    The following taxpayers are not allowed to use ITR 1 filing tax returns:

  • Taxpayers whose annual earnings exceed ₹50 lakh
  • Company director
  • Holder of unlisted equity shares
  • Non-residents and residents not ordinarily residents. Individuals who earn income from multiple house properties; legal gambling, horse racing, or lottery; capital gains; agriculture income more than ₹5,000; professional or business income
  • Resident Indians with international assets claiming double taxation relief under Sections 90, 90A, and 91

How to File ITR 1?

A taxpayer can follow two primary ways to file the ITR 1 form. These include:

Online

The individual may electronically transmit the information and submit it for verification to the concerned authorities. Alternatively, the taxpayer may file the return online and e-verify the same using net banking, Aadhar, an electronic verification code (EVC), or a one-time password (OTP). For electronically filed returns, the acknowledgement is mailed to the registered address, or it may be downloaded from the income tax website.

Offline

An individual aged over 80 years or a taxpayer whose income is less than ₹5 lakh and who does not claim any refund may file the returns offline. When submitting the form, the tax authorities issue an acknowledgment.

Wrapping Up

The acknowledgment document for taxpayers who opt to file their returns electronically or online is mailed by the I-T Department to their registered e-mail ID. The Income Tax website also offers a download for the same document. After submitting the physical form, taxpayers who utilise it to file their returns get an acknowledgment copy from the I-T Department.

FAQs

1. Can ITR 1 be filed for agricultural income exempt from tax?

Yes, if agricultural income is less than ₹5,000, then returns may be filed using this form. However, if it exceeds ₹5000, returns must be filed in ITR 2.

2. How to report bank accounts in the form?

It is important to include details of all savings and current accounts held during the financial year. However, if an account has been dormant for over three years, details of the same may be excluded.

3. Should dividend income from mutual funds be included?

Yes. Income earned as dividends from mutual fund investments is exempt under section 10(35). However, it must be reflected in Part D under ‘Exempt Income (others).

Now that you are aware of the things that are included in ITR Form 1 as well as the eligibility criteria, you must use this form to file your income tax returns if you are eligible for the same.

4. Can I submit an ITR-1 with agricultural income that is exempt?

Yes! Only if your agricultural revenue does not exceed ₹5000 are you eligible to file. If it is higher than that, you must file an ITR-2.

5. How to report bank accounts in ITR-1?

All current and savings accounts must be described in detail. You need not mention anything if your account has been inactive for over three years.

6. How do you file ITR-1 when you earn Rental Income?

Form 16 and income information must be uploaded together. Entering personal information like the first name, middle name, last name, gender, and date of birth, together with the PAN number, is the first step in filing an ITR-1 for those who receive a rental income.

7. While filing ITR-1, should Interest Income be shown in ‘Income from Other Sources’ if TDS has already been deducted?

The TDS (which has already been deducted) will be adjusted by the Income Tax Department against your final tax obligation. The total interest income from your fixed deposits in a given financial year must be included in your total income and taxed accordingly if the bank does not deduct TDS from it.

    Key takeaways

  • Individuals must file income tax returns if their income exceeds ₹2.5 lakh if they are under 60 years old, ₹3 lakh if they are between 60 and 80 years old, and ₹5 lakh if they are above 80 years old.
  • The exemption thresholds are constantly changing in accordance with government notifications and policies.
  • Additionally, filing the returns follows a straightforward method. All that is required is knowing the various ITR form types when they apply.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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