ITR: Who should not file returns in ITR-1 for FY 2021-22?

The due date to file Income Tax Returns is fast approaching for FY 2021-22. The government has notified ITR forms for individuals and others to file income tax returns for FY 2021-22. The individuals, mainly with salary, rental, and other income sources like interest, dividends, etc., can file returns in ITR-1 (SAHAJ). 

However, specific cases exist where an individual or HUFs cannot file ITR-1. Let’s delve into the instructions given by the government for those who cannot file ITR-1. 

It is important to check your residential status before you start filing your return. It is because residents are only allowed to file ITR-1. A resident not ordinarily resident (RNOR) and a non-resident person cannot file ITR-1.

Further, the individuals/HUFs having below incomes cannot file ITR-1: 

• Agricultural income exceeding Rs 5000
• Income from capital gains
• Income from business or profession
• Income from more than one house property
• Foreign Income

For example, if you are a salaried individual and also earn income from freelancing, you cannot file ITR-1.

Further, ITR-1 cannot be used by a person, who

• Is a Director in a company
• Has investments in unlisted equity shares at any time during the financial year
• Is a person in whose case TDS is deducted under Section 194N
• Owns assets outside India,
• Has a financial interest in any entity outside India
• Has the authority to sign in any account located outside India
• Is a person whose payment or TDS has been deferred on ESOP
• Has any brought forward loss or loss needs to be carried forward under any income head

Moreover, your total income is also one of the check-point when choosing ITR-1 for filing returns. If the total income from all the income sources exceeds Rs 50 lakh, you cannot file ITR-1.

For any clarifications/feedback on the topic, please contact the writer at namita.shah@clear.in