New ITR-1 Sahaj Form – Eligibility, process of filing

To simplify the tax filing compliance, the income tax department has issued ITR forms depending on the taxpayers’ source and range of income. Hence, everyone is required to file the return of income according to the source of income. 

ITR-1, also known as Sahaj Form, is applicable for individuals who have annual income less than Rs 50 lakh from salaries, one house property, other sources of income or agricultural income up to Rs.5,000.

Let us discuss the eligibility and process to file ITR-1

Eligibility criteria for filing ITR-1

There have not been many changes in the eligibility criteria for filing ITR-1. The source of income and threshold income remains the same as per last year filing norms.

ITR-1 can be submitted by taxpayers having total taxable income in a financial year up to Rs.50 lakh from the following sources:

  • Income from salary or pension.
  • Income from one house property, except when a loss from the previous year is carried forward.
  • Income from other sources except for income from winning from lottery and horse races.
  • In case clubbing provisions are attracted, ITR-1 can be filed only if the minor’s or wife’s income is from the sources mentioned above.

Non-eligibility of filing ITR-1

  • Non-residents and Not-ordinary residents cannot file ITR-1
  • Taxpayers with income more than Rs.50 lakh cannot file ITR.
  • An individual who is a director of a company or has unlisted equity shares ownership in a financial year.
  • Individuals having income from more than one house property, lottery income or racehorses.
  • Income from capital gains.
  • Agricultural income of more than Rs.5,000.
  • Income from business or profession.
  • Individuals seeking relief from double taxation under sections 90/90A/ 91
  • Resident individuals having a foreign asset or signing authority outside India.

Changes in ITR-1 for AY 21-22

  • Taxpayers with cash deposit of more than Rs.1 crore in current accounts, expenditure of more than Rs.2 lakh in foreign travel, or spends more than Rs.1 lakh on electricity can now file ITR-1.
  • Residents with single house property under joint ownership can and total income of less than Rs.50 lakh can file ITR-1.
  • Nature of employment includes ‘pensioner’ in the ITR form. 
  • For declaring pension income under ‘income from other sources, a new column is inserted for deduction u/s 57 (iia).
  • Specific details of ‘income from other sources’ will be required to be provided in ITR-1.
  • Section 80TTB column has been added for senior citizens.
  • Salary deductions are divided into three categories-standard deductions, professional tax and entertainment allowance.

The process to file ITR-1 for FY 2020-21

  • The income tax department has discontinued the old Java and excel utilities and has introduced a new offline-JSON utility for simplifying the tax filing process.
  • This new JSON (Javascript Object Notation) utility has a new tool to import the pre-filled data. The utility will be accessible on Windows 7, or later versions.JSON technology is faster in collecting data and providing pre-filled returns; this technology is already being used for GST returns.
  • This facility of pre-filled data is now available for ITR-1 and ITR-4 for filing ITR returns for AY 2021-22. The income tax department is working to incorporate this tool in other ITR forms utilities, which will soon be available.
  • Users can fill in the JSON utility and save it on the portal; also, the utility can be exported to the device.
  • You can download the utility from the ‘download tab’ on the main screen of the e-filing portal.
  • A zip file will get downloaded, which needs to be extracted on the computer. The ZIP file must be extracted in the exact location to which the original compressed file got downloaded.

For any clarifications/feedback on the topic, please contact the writer at jyoti.arora@cleartax.in

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