Income Tax Return: An Overview  
 

What is Income Tax Return?

An Income tax return (ITR) is a form used to file information about your income and tax to the Income Tax Department. The tax liability of a taxpayer is calculated based on his or her income. In case the return shows that excess tax has been paid during a year, then the individual will be eligible to receive an income tax refund from the Income Tax Department.

As per the income tax laws, the return must be filed every year by an individual or business that earns any income during a financial year. The income could be in the form of a salary, business profits, income from house property or earned through dividends, capital gains, interests or other sources.

Tax returns have to be filed by an individual or a business before a specified date. If a taxpayer fails to abide by the deadline, he or she has to pay a penalty. 

ITR 1 Sahaj Form

To make tax compliance easier, the Income Tax Department has categorised taxpayers into many groups based on income and its source. So, you need to file your returns accordingly. ITR-1, also known as Sahaj Form, is for a person with an income of up to Rs.50 lakh.

Who is Eligible to File ITR-1 for AY 2022-23?

ITR-1 is a simplified one-page form for individuals receiving income of up to Rs 50 lakh from the following sources :

a) Income from salary/pension     
b) Income from one house property (excluding cases where loss is brought forward from previous years)     
c) Income from other sources (excluding winning from the lottery and income from race horses)     
d) In the case of clubbed Income Tax Returns, where a spouse or a minor is included, this can be done only if their income is limited to the above specifications.     
 

Aadhaar Card is Mandatory for Income Tax Return Filing: The Income Tax Department has made it mandatory for all taxpayers to link their Aadhaar card with their PAN on the Income Tax Department website.

Who cannot use form ITR-1?

As per the notified income tax return forms, an individual cannot use ITR-1 in the following situations:

a) Who have invested in unlisted equity shares,     
b) If you are a director in a company     
c) If the TDS under section 194N has been deducted for withdrawing money into an account held with the bank/post office above the specified limit.     
d) If your total income exceeds Rs 50 lakh     
e) If the taxpayer is a Hindu Undivided Family (HUF)     
f) Holding foreign assets of a foreign company     
g) Is a signatory in a foreign bank account     
h) If you have capital gains from selling shares, mutual funds, land or building etc. (short-term and long-term)     
i) If income tax has been deferred on Employee Stock Ownership Plan (ESOPs)     
j) If you own more than one house property     
k) If you are a Non-resident Indian (NRI) or Resident Not Ordinarily Resident (RNOR)     
l) If one of the sources of your income is the lottery, racehorses, gambling etc.     
m) If your agricultural income exceeds .     
n) If you have income from business and profession     
o) Losses that are brought forward or to be carried forward under the head 'Income from house property."

Documents Required

Documents which you need to file the ITR-1 form are:

1. Form 16: Issued by all your employers for the given Financial Year     
2. Form 26AS: Remember to verify that the TDS mentioned in Form 16 matches the TDS in Part A of your Form 26AS     
3. Receipts: If you have not been able to submit proof of certain exemptions or deductions (such as HRA allowance or Section 80C or 80D deductions) to your employer on time, keep these receipts handy to claim them on your Income Tax Return directly.     
4. PAN card     
5. Bank investment certificates: Interest from bank account details – bank passbook or FD certificate

Penalty for Late Filing Income Tax Return

Taxpayers who do not file their income tax return on time are subject to penalties and charged interest on the late payment of income tax. Also, the penalty for late filing income tax returns on time has been increased recently. The penalty for late filing income tax return is now as follows:

Late Filing between 1st August and 31st December - Rs.5000    
Late Filing After 31st December - Rs.10,000    
Penalty if taxable income is less than Rs.5 lakhs - Rs.1000