The India Government has introduced a simplified 1-page ITR Form-1 (Sahaj) for salaried individuals, which will be applicable from the current financial year. This form is now available for physical income tax filing and it is much easier to fill than the earlier 2-page ITR form.
To simplify the form, some of the redundant columns have been taken away. Mentioning Aadhaar card number is now compulsory for filing ITR, which may cause several tax filers who do not have one yet to rush and apply for an Aadhaar Card.
The Ministry of Finance has also confirmed in a press release that the nine existing ITR forms have been reduced to seven ITR forms, to simplify the tax filing process. Currently, four of the new ITR forms are available on the official income tax filing website. These four forms are ITR-1 (Sahaj), ITR-2, ITR-3 and ITR-4 (Sugam) which can be downloaded in either excel utility or java utility. There is no change in the manner of filing of ITR Forms as compared to last year.
All the ITR Forms can be filed electronically but some taxpayers have the option to file ITR 1 (Sahaj) or ITR-4 (Sugam) physically, which includes:
Individual above the age of 80 years or more during previous financial year
An individual or HUFs who earn less than five lakh rupees and do not want to claim any refund
So, who can use this ITR-1 Sahaj form?
- Individuals earning from salary.
- Individuals earning from one house property (excluding in the case of losses brought forward from previous financial years).
- Individuals earning from other sources, excluding winnings from lottery, horse race, income referred under Section 115BBDA & income referred under Section 115BBE.
- Income of family members, i.e. spouse and children, can be clubbed, provided they fall under the same category.
Documents required to fill in ITR-1 Sahaj form:
- Form 16, issued by the employer for the financial year 2016-17
- Form 26AS; TDS value mentioned in Form 16 should match with the amount on this form.
- PAN card
- Aadhaar Card
- Bank account details including interest earned on saving account deposits.
- Proof of deductions
So, what is new in ITR Form-1 (Sahaj) form?
- It is mandatory to mention the 12-digit Aadhaar number in this form along with the PAN number.
Read more: Now Aadhar Made Mandatory to File IT Returns
- To file this form, the taxpayer needs to start with entering personal details, then disclosing income from salary/pension, house property and/or other sources. Following which, they need to enter details to claim deductions and compute total taxable income.
- Any cash deposited above INR 2 lakhs between 9th November – 30th December of 2016 need to be mentioned.
- The tax calculation and deduction sections have been rationalised to simplify the form for common taxpayers.
- In the earlier version of ITR Form-1 (Sahaj) form, there were 20 columns for claiming deduction under Section 80. But in the new 1-page ITR-1 Sahaj form, only five columns are there to claim deduction under section 80C, 80D, 80G and 80TTA and another column to claim other deductions.
- Under section 80C, you can claim a deduction up to INR 1.5 lakhs against investments made in PPF, EPF, life insurance policy etc.
- Under Section 80D, deductions can be claimed against medi-claim investments.
- Under Section 80G, deductions can be claimed against donation made to certain charitable institutions or relief funds
- Under Section 80TTA, you can claim a deduction up to INR 10,000 on interest earned on savings account deposits.
Who cannot use this ITR Form-1 (Sahaj) form?
- Individuals who have more than one house property.
- To declare income earned from lottery winnings, horse racing, and/or legal gambling.
- To declare capital gains that are non-tax-exempted.
- Individuals with agricultural income more than INR 5,000
- Individuals with business and professional earnings
- Individuals who have assets or signing authority in any account situated abroad.
- Individuals who wants to claim relief under double taxation policy as referred in Section 90/ 90A/ 91
Changes in ITR-1 Sahaj Forms to Simplify the E-filing ITR Process will benefit a huge number of taxpayers (around 2 Crore) who are eligible to file ITR with this simplified form. It is also expected that this form will encourage taxpayers who used to avoid tax filing due to the complex nature of this process. The government has not only made changes in ITR-1 Sahaj form but also have made changes for other ITR forms. ITR-2, ITR-2A, and ITR-3 have been rationalised to simplify and notify a single ITR-2 form. Taxpayers who have more than one house property will need to use the ITR-2 form. Tax filing for the financial year 2016-17 has been started already from 1st April and the new ITR-1 Sahaj form is accessible online from the official website.