Tax return: 10 reasons why a taxpayer cannot use the ITR-1 form

Income tax declaration: The income tax return (ITR) filing deadline for FY22 and AY23 is July 31, 2022. Therefore, earners should be busy analyzing their income and expenses for the fiscal year and year of taxation mentioned above. However, the taxpayer should be aware that there are different ITR forms applicable to different types of earners. Of the various ITRs formed by the Income Tax Service, the simplest form is ITR-1. Many times, ITR-1 is filed by taxpayers as a standard ITR form without understanding the exact eligibility to file the correct ITR form. It is therefore important for a taxpayer to know under what circumstances a taxpayer cannot complete the ITR-1 form.

Speaking on who can use the ITR-1 form for filing an ITR, Aarti Raote, Partner at Deloitte India, said, “ITR-1 is a simple tax return that can be filed by a taxpayer resident whose total income does not exceed 50 lakhs and has declared income from sources such as salary, income from other sources and single property. It should be noted that the return cannot be used by a director of a corporation or has tax deferral for the ESOP of startups or an individual with farm income greater than 5000 or has capital gains income.”

Here we list 10 reasons why a winning person cannot use the ITR-1 form when filing an ITR for FY22 or AY23:

1]Over Annual income of 50 lakh: “If the earner is an employee with no other income but the total annual income exceeds 50 Lakh, ITR-2 is the right form for such a taxpayer,” said Sujit Bangar, founder of taxbuddy.com.

2]Income from more than one property: “If one has a house property, the correct ITR form is ITR -1. But if there is more than one house property, one cannot file ITR-1,” Sujit Bangar said.

3]Income from agriculture: We all know that income from farming is not taxable. When filing the income tax return, you must declare income from agriculture in excess of 5000. Although farm income is not taxable, it is required only to determine the slab rate for taxation. And in such cases, ITR-1 cannot be deposited.

4]Equity investment in an unlisted company: “If a salaried taxpayer owns the equity of an unlisted company, then the earning person is not allowed to file their ITR using Form ITR-1,” said Amit Gupta. , MD at SAG Infotech – a SEBI registered tax solutions provider. company.

5]Director of a company: “If the taxpayer is a director of a company, then he cannot use the ITR-1 form,” said Amit Gupta of SAG Infotech.

6]TDS payment: “If the TDS was deducted when withdrawing money from a bank/post office account over the limit of 1 crore prescribed under Section 194N, then a person who wins cannot use the ITR-1 form,” said Amit Gupta.

7]Stock, mutual fund investor: “If the taxpayer is a salaried person and invests in stocks or mutual funds, one can file ITR-1. But once those stocks are sold or the mutual funds are redeemed, one cannot file ITR-1 For such income, the correct form is ITR-2 or ITR-3,” said Sujit Bangar or taxbuddy.com.

8]HUF Family Member: If a taxpayer belongs to Hindu Undivided Family (HUF), he cannot use Form ITR-1 for ITR filing.

9]Active outside India: If a person who wins meets all the criteria for the ITR-1, but owns an asset outside India, the taxpayer cannot file the ITR-1.

10]Freelance income: Many software professionals do some or other activity as a freelancer on the weekends or in their spare time. Freelance income is business or professional income. In such a scenario, one cannot file ITR-1. You must file ITR-4 or ITR-3, as the case may be.

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