On January 03, 2020 Central Board of Direct Taxes (CBDT) had announced that individual taxpayers owning single or one house property in joint ownership or those who have paid Rs 1 lakh in electricity bills in a year or incurred Rs 2 lakh expense on foreign travel cannot file their tax return using the simple ITR-1 form. Surprisingly within a week, on January 09, 2020 CBDT rolled back its orders, allowing joint owners of single house property and other taxpayers to file income tax return using the ITR-1 form.
The specific restrictions which were announced by CBDT:
The notification on January 03,2020 specified that those taxpayers who own a single house property jointly or individuals who satisfy conditions under seventh proviso of section 139(1) of the Income Tax Act will not be allowed to use ITR-1 to file their return.
The things which were rolled back on the January 09 notification:
The January 9, 2020 press release stated, “After the aforesaid notification, concerns have been raised that the changes are likely to cause hardship in the case of individual taxpayers. The taxpayers with jointly owned property have expressed concern that they will now need to file a detailed ITR Form instead of a simple ITR-1 and ITR-4. Similarly, persons who are required to file return as per the seventh proviso to section 139(1) of the Act, and are otherwise eligible to file ITR-1, have also expressed concern that they will not be able to opt for a simpler ITR-1 Form.”
Which taxpayers can file their ITR using ITR1 form?
As per the notified forms and latest clarification from the income tax department, ITR1 can be used by the following individuals:
- Resident individuals whose total income does not exceed Rs 50 lakh.
- Those taxpayers whose source of income should be salary, house property, interest income, family pension, etc.
- Taxpayers who have spent more than Rs 2 lakh on foreign travel on themselves in FY 2019-20.
- Taxpayers who have deposited more than Rs 1 crore in one or more current accounts in FY 2019-20.
- Individuals who have paid more than Rs 1 lakh as electricity bill in FY 2019-20.
- Individuals having one house property irrespective of ownership status, i.e., single house property either owned fully or jointly with someone.
Which taxpayers cannot file their ITR using ITR1 form?
The ITR1 cannot be used by the following individuals post the notification of January 09, 2020:
- Individuals who are non-resident or not ordinarily resident in the country.
- Resident taxpayers whose total income exceeds Rs 50 lakh.
- Taxpayers who have incurred capital gains, either short-term or long-term or both.
- Taxpayers who are directors in a particular company.
- Taxpayers who have invested in unlisted equity shares.
- Taxpayers who have to carry forward losses under the head ‘Income from house property’.
- Taxpayers who have more than one house property.
- Taxpayers having sources of income other than interest like dividend income.