ITR Filing Last Date: 31st July is the last date for filing ITR. But, different forms are filed for income from different sources. Here is information about when ITR-1 cannot be filed.
So, at this time most of the salaried class people must be busy scanning their income and expenditure for the previous financial year and assessment year. However, the taxpayer should be aware that different ITR forms are applicable for individuals earning different types of income.
The easiest form among the various ITRs issued by the Income Tax Department is ITR-1. At times, ITR-1 is filed as a standard ITR form by taxpayers without understanding the exact eligibility to file the correct ITR form. Therefore, it is important for taxpayers to know under what circumstances the ITR-1 form cannot be filed.
Who can use ITR-1 form for ITR filing?
Income tax experts say that ITR-1 is a simple tax return form, which can be filed by a resident taxpayer whose total income does not exceed Rs 50 lakh. Income from sources like salary, income from other sources and only one house property is reported. It needs to be noted here that the return cannot be used by a director of a company or ESOP of a startup or tax deferred for a person having agricultural income. 5000 or has capital gains income.
Let us know when an earning person cannot use ITR-1 form while filing ITR for FY 2021-22 or Assessment Year 2022-23:
Annual income above 50 lakhs
If the earning person is a salaried person and has no other income, but the total annual income is more than 50 lakhs, then ITR-2 is the correct form for such taxpayer.
Income from more than one house property
If one has a house property, then the correct ITR form is ITR-1. But if there are more than one house properties, then one cannot file ITR-1.
income from agriculture
We all know that income from agriculture is not taxable. While filing income tax return, one needs to report income from agriculture above Rs 5000. Though agricultural income is not taxable, it is only required to determine the slab rate for taxation. And in such cases ITR-1 cannot be filed.
Equity investment in an unlisted company
If a salaried taxpayer owns equity in an unlisted company, then in such a case, the earning person is not allowed to file ITR using Form ITR-1.
being a director of the company
If the taxpayer is a director in a company, then in such a case, he cannot use the ITR-1 form.
Excess TDS Payment
If TDS is deducted on withdrawal of money in any bank/post office account in excess of the limit of 1 crore prescribed under section 194N, then an earning person cannot use ITR-1 form.
stock mutual fund investors
If the taxpayer is a salaried individual and is investing in shares or mutual funds, one can file ITR-1. But once these shares are sold or the mutual fund is redeemed, one cannot file ITR-1. The correct form for such income is ITR-2 or ITR-3.
HUF family member
If a taxpayer belongs to Hindu Undivided Family (HUF), then he cannot use ITR-1 form for filing ITR.
property outside India
If an earning person fulfills all the criteria of ITR-1 but has assets outside India, then the taxpayer cannot file ITR-1.
Income from freelancing
Many software professionals do some work as freelancers on weekends or in their spare time. Income from freelancing is income from business or profession. In such a situation, no one can file ITR-1. Such people need to file ITR-4 or ITR-3, as the case may be.