ITR-1(SALARY)

What is Income Tax?

The term “income tax” refers to a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. By law, taxpayers must file an income tax return annually to determine their tax obligations.

Income taxes are a source of revenue for governments. They are used to fund public services, pay government obligations, and provide goods for citizens. In addition to the federal government, many states and local jurisdictions also require that income tax be paid.

Benefits of Filings Income Tax:–

Easy Loan Approval

Filing the ITR will help individuals, when they have to apply for a vehicle loan (2-wheeler or 4-wheeler), House Loan etc. All major banks can ask for a copy of tax returns as a proof of income statement. This is a mandatory document for the loan approval.

Claim Tax Refund

There can be instances when tax has been deducted (TDS) from your income even when your total taxable income is less than the basic exemption limit and you have nil tax liability for that year. In such a case, you will have to claim TDS refund for which you will have to file an Income Tax Return mandatorily.

Income & Address Proof

Income Tax Return can be used as proof of your Income and Address.

Quick Visa Processing

Most embassies & consultants require you to furnish copies of your tax returns for the past couple of years at the time of the visa application. These are amongst mandatorily required documents and hence it is always advisable to timely file your ITR.

Carry Forward Your Losses

If you file the return within the original due date, you will be able to carry forward losses to subsequent years, which can be used to set off against the income of subsequent years. This means you can deduct certain losses from the relevant income which will help you reduce your tax liability of the future income. This is not possible without filing of the income tax return.

Avoid Penalty

If you are required to file your tax returns according to the income tax act, but didn’t, then the tax officer deserves the right to impose a penalty of up to Rs.5,000.

ITR-1 (SALARY)

As you already know Income Tax Return filing is done by way of submitting the income tax form to the income tax department. Different ITR forms are notified by the tax department depending on the source of your income. ITR 1 form commonly known as Sahaj is one such form. It is one of the most used forms in India. It is a simple form used for Income Tax Return filing & submitting your income, deductions and tax details to the income tax department

Who is eligible to file ITR-1

• ITR-1 can be filed by a Resident Individual whose:
• Total income does not exceed ₹ 50 lakh during the FY
•  Income is from salary, one house property, family pension income, agricultural income (up to ₹5000/-), and other sources, which include:
•  Interest from Savings Accounts
• Interest from Deposits (Bank / Post Office / Cooperative Society)
• Interest from Income Tax Refund
•  Interest received on Enhanced Compensation
•  Any other Interest Income
•  Family Pension
•  Income of Spouse (other than those covered under Portuguese Civil Code) or Minor is clubbed (only if the source of income is within the specified limits as mentioned above).

 Who is not eligible to file ITR-1

ITR-1 cannot be filed by any individual who:

• is a Resident Not Ordinarily Resident (RNOR), and Non-Resident Indian (NRI)
• has total income exceeding ₹ 50 lakh
• has agricultural income exceeding ₹ 5000/-
• has income from lottery, racehorses, legal gambling etc.
• has taxable capital gains (short term and long term)
• has invested in unlisted equity shares
• has income from business or profession
• is a Director in a company
• has tax deduction under section 194N of Income Tax Act
• has deferred income tax on ESOP received from employer being an eligible start-up
• owns and has income from more than one house property
• is not covered under the eligibility conditions for ITR-1

 What documents do I need to file ITR-1?

• You would need Form 16,
• house rent receipt (if applicable),
• investment payment premium receipts (if applicable).
• However, ITRs are annexure-less forms, so you are not required to attach any document (like proof of investment, TDS certificates) along with your return (whether filed manually or electronically). However, you need to keep these documents for situations where they need to be produced before tax authorities such as assessment,