ITR -1 form (Income Tax Return) is especially for
- Individual being a resident (other than not ordinary resident) having total income up to RS. 50 Lac
- Having income from salaries, Pension, house property, other sources, interest income and agricultural income up to Rs. 5 thousand
Who cannot file ITR- 1
- An individual having income above Rs 50 Lakh
- Individual who is either Director in a company or has invested in unlisted equity shares
- Businessman and profession
- Agricultural income exceeding Rs. 5000
- Income from horserace, legal gambling, lottery etc
- Taxable capital gains
- Individual claiming relief of foreign tax paid or double taxation relief under section 90/90A/ 91.
- Individual who is a resident and has assets (including financial interest in any entity) outside India or signing authority in any account located outside India.
Major changes in ITR-1 for the Assessment Year 2020-21
- Resident individual who own a single property in joint ownership can also file itr-1 where the total income is up to Rs. 50 lakhs.
- The condition of the individual having income from salaries, one house property, other income and having total income up to Rs. 50 lakhs continues.
- Taxpayers should separately disclose the amount of the investment or deposits or payments towards tax saving made from April 1st 2020 until 30th June 2020.
- Individual taxpayers who meet the criteria of (a) making cash deposits or (b) incurring expense above Rs. 2 Lakh on foreign travel or (c) expenditure above Rs. 1 lakh on electricity should also file itr-1 where the total income is up to Rs. 50 lakhs.
Gross total income:
(a) Salary as per section 17(1)
- Salary includes the following amount received by an employee during the previous year
- Wages, pension, annuity, gratuity
- Any fees, commission, perquisite or profit in lieu of or in any salary or wages, any advance salary
- Leave encashment or salary in lieu of lieu
- The annual accretion to the balance at the credit of an employee participating in recognized provident fund, to the extent to which it is chargeable to tax under rule 6 of part A of the fourth schedule
- Taxable portion of transferred balance from unrecognized provident fund to recognized provident fund. Pension scheme referred to in section 80CCD
(b) Value of perquisite as per section 17(2)
Value of rent-free/ concessional rent accommodation provided by the employer
Any sum paid by employer in respect of an obligation which was actually payable by the assessee
Value of any benefit/ amenity granted free or at concessional rate to specified employees etc.
The value of any specified security or sweat equity shares allotted or transferred free of cost or at concessional rate to the assessee
The amount of any contribution to an approved superannuation fund by the exployer in respect of the assessee, to the extent it exceeds one lakh rupee
The value of any other fringe benefit or amenity as may be prescribed.
(c) Profit in lieu of salary as per section 17 (3)
These payments are received by the employee in lieu of or in addition to salary or wages. These payments include the following:
- Terminal compensation
- Payment under keyman insurance policy
- Payment from unrecognized provident fund or an unrecognized superannuation fun
- Any amount due or received before joining or after cessation of employment
- Any other sum received by the employee from the employer
Deductions under section 16
Deduction u/s 16(ia) state tax a taxpayer having income chargeable under the head ‘Salaries’ shall be allowed a deduction of Rs.40,000 or the amount of salary, whichever is less, for computing his total income. Now all employees will get a standard deduction of Rs. 40000 p.a. This limit is increased to Rs. 50,000 p.a. by financial year 2019
Part – C
Deductions and total taxable income
Section 80C allows for a maximum deduction up to Rs. 1.5 lakh every year from an investor’s total taxable income.
Items under section 80C
- Investment in provident fund
- Payment made towards the principal sum of a house loan, SSY, NSC, SCSS etc
- Payment made towards life insurance premium
- Equity linked saving schemes
Payment made towards pension plans and mutual funds
Sec 80CCD (1)
Payment made towards certain Government schemes such as NPS, Atal Pension Yojna etc.
Sec 80 CCD (1 B)
Investment up to Rs. 50,000 in NPS is considered for exemption under this section
Sec 80 CCD (2)
Employer’s contribution towards NPS ( up to 10% comprising basic salary and dearness allowance, if any) is exempted under this category
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