Filing your Income Tax Return (ITR) is an annual financial obligation for Indian citizens. However, the process can be complex, especially when it comes to selecting the correct ITR form. In this guide, we will help you understand who should file ITR-1 and how to choose the right ITR form.
The Central Board of Direct Taxes (CBDT) has prescribed seven ITR forms ― ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 (Sugam), ITR-5, ITR-6, and ITR-7. The selection of the correct form depends on the source and amount of income, residential status, and type of taxpayer.
Also read | ITR filing: How to file income from capital gains or set off capital losses
ITR-1, also known as Sahaj, is the most commonly used form. It is applicable for individuals who are residents other than not ordinarily resident (ROR), having an income of up to Rs 50 lakh per annum. The income can be from the following sources:
Salary or Pension
One house property (excluding cases where loss is brought forward from previous years)
Other Sources (excluding winnings from lottery and income from racehorses)
However, ITR-1 is not applicable if your income includes the following:
- Income from more than one house property
- Income from winnings of lottery or income from racehorses
- Income taxable under sections 115BBDA or 115BBE
- Agricultural income exceeding Rs 5,000
- Income from Business or Profession
- Loss under the head 'Income from other sources'
- Income from Capital gains
- A resident having any asset (including financial interest in any entity) located outside India or signing authority in any account located outside India
- A resident having income from any source outside India.
Choosing the correct ITR form is crucial for accurate and successful tax filing. If you file your taxes using the wrong form, your return might be deemed defective. If the mistake is not rectified within the given time, it will be treated as if you have not filed the return at all.
Also read | Inoperative PAN cards distress NRIs
While filing your taxes, it's essential to keep a few things in mind:
Accurate information: Ensure that all the information you provide, including your income details, deductions, and personal information, is accurate. Any discrepancies can lead to issues with your tax filing.
Timely filing: The last date for filing ITR for the financial year 2022-23 is July 31, 2023, unless extended by the government. Late filing can lead to penalties. So, it's important to file your return on time.
Keep documents handy: Keep all your necessary documents, such as Form 16, bank statements, and proof of investments, handy. This will make the process smoother and less time-consuming.
Verify your return: After filing your ITR, don't forget to verify it. Unfortunately, your return won't be processed until it is verified.
Seek professional help: If you are unsure about any aspect of tax filing, consider consulting a tax advisor or a chartered accountant who can guide you through the process.
Remember, filing your taxes correctly and on time is not just a legal obligation, but it also helps you maintain financial health and credibility. Always understand the various ITR forms and their applicability to ensure compliance with tax rules.
Also read | ITR filing mistakes: Common errors to avoid while filing income tax return for FY 2022-23
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
