When can you not use the ITR1 form to file your tax return for the 2020-2021 fiscal year?
- The taxpayer is a resident
- Total income does not exceed Rs 50 lakh
- Sources of income include salary, home ownership, farm income up to Rs 5,000 and other sources such as savings account interest, deposits, home tax refund. income, family pension, etc.
- Income clubbing with spouse or minor
Keep in mind that the ITR-1 can be used to generate the ITR even if you own only one property jointly with your spouse.
However, there are situations where an individual cannot use the ITR-1 to file tax returns for the 2020-2021 fiscal year despite the aforementioned sources of income.
When can you not use the ITR-1?
Under tax laws, an individual cannot file an ITR-1 if one of the following criteria is met:
- Invested in unlisted stocks
- Administrator if a company
- Hindu Undivided Family (HUF)
- Hold foreign assets such as shares of a foreign company, etc.
- Deferred income tax on the ESOP (Employees’ Stock Ownership Plan) received from the employer being an eligible start-up
- Owns and has more than one property in the house (owned alone or jointly)
- Agricultural income during a financial year exceeds Rs 5,000
- Is an Ordinary Non-Resident Resident (RNOR) and a Non-Resident Indian (NRI)
- Have taxable capital gains (short term and long term)
- Total income from all sources exceeds Rs 50 lakh
- Income from lottery, racehorses, legal games of chance, etc.
- Losses carried forward or to be carried over to subsequent years under the heading ‘Income from real estate assets’.
- Income from a business or profession
- The tax was deducted under section 194N of the Income Tax Act. The TDS is deducted under Section 194N on cash withdrawals exceeding a certain limit provided certain conditions are specified.
What to do if you cannot produce ITR-1
People who do not meet the ITR-1 eligibility requirements should not be concerned. These people can use different RTI forms to file their tax returns. For example, individuals with capital gains (short term and / or long term), holding unlisted shares or running a business can use ITR-2 to file their income tax return.
Likewise, individuals / HUFs with business income or professional income can use ITR-3 to file their tax return.
Also read: Which tax return form is applicable to you for fiscal year 2020-21?
Also read: How to file an RTI-2 with salary, capital gains and other income
Also Read: How To File ITR-1 With Salary, Home Loan, And Other Income