Decoding ITR Form-1 (Sahaj) meant for salaried individuals

Decoding ITR Form-1 (Sahaj) meant for salaried individuals

The Central Board of Direct Taxes (CBDT) has notified the new income tax return forms (ITR) for assessment year (AY) 2018-19. While some amendments have been made in ITR Form -1 (Sahaj), ITR Form-2 has also been rationalised.

ITR Form 1 (Sahaj)

ITR Form -1 (Sahaj) is a one-page form that can be used by an individual with an income up to Rs50 lakh, with salary being the primary source of income, besides income from one house property and other income like interest from bank deposits.The form was first notified in the last AY 2017-18.

While in the previous Sahaj form, only details of income from salary or pension along with income from one house property and other income were to be filled, the current Sahaj form asks for a break-up of income from each source.Income from salary: This head has been divided into five: In the first column, you need to provide the amount of salary received, excluding all allowances, perquisites and profit in lieu of salary. “Income received by an employee in the form joining bonus, ex-gratia amount received on retirement, retrenchment compensation and so on are considered as profit in lieu of salary,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, a chartered accountancy firm.

In the second column, you need to provide amount of allowances not exempt from tax and in the third column, the details of perquisites received like accommodation, car or driver provided by the employer. In the fourth and fifth columns, the amount related to profit in lieu of salary and deduction under section 16 of the Act (which include standard deduction, professional tax and entertainment allowance) need to be mentioned, respectively.In the sixth column, you need to sum up the details provided in the five columns .

Income from house property: If you own a house, you will need to mention whether it is self-occupied or a let-out property. If the property was let-out during the previous year, you need to provide a break-up of gross rent received in the first column, tax paid to local authorities in the second, and the annual value of property in the third column. The annual value is gross rent minus taxes paid.

Standard deduction of 30% of annual value and interest paid on borrowed capital (home loan) should be mentioned in the fourth and fifth columns, respectively. In the sixth column, “Income chargeable under the head ‘House Property”, mentions the annual value after reducing the amount of standard deduction and interest on home loan from it.

Income from other sources: Interest earned from bank deposits needs to be mentioned under this head. Remember, income of up to Rs10,000 from bank accounts is exempt from tax under section 80TTA. So it is prudent to declare interest earned and claim the exemption.

Other ITR forms

ITR Form-2 can now be filed by individuals and Hindu Undivided Family (HUF) having income under any head other than business or profession. Individuals and HUFs having income under the head business or profession shall file ITR Form-3 or ITR Form-4 (in presumptive income cases).

There is no change in the manner of filing of ITR forms from last year. The forms are to be filed electronically. However, those having income of less than Rs5 lakh and who don’t have a refund claim or those who are above the age of 80 years can file ITR Form-1 (Sahaj) or ITR-4 (Sugam) in paper form, if they wish to.

The Mint, New Delhi, 11th April 2018

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